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Loyalty Management | Going beyond offers and discounts

September 7, 2012

So you offered your ‘loyal’ customer a 500 bonus point, a free hat, a photo frame. Job done… Maybe not! These were the rewards you offered, but were these perceived as valuable by the customers? We often define loyalty programs basis our convenience and objectives. What we miss out on is the ‘consumer perspective!’

A research showed that 44% of consumers in 2011 had a negative experience with a loyalty program. I am not surprised at all! Most brands classify customers basis geography, age, demographics, financial ability, etc. But, what they overlook is the emotional aspect. Customers interact or transact with brands on a regular basis and across channels such as Call Center, In-branch, SMS, IVR, Social Media, Website, etc. They express interest, complaint, ask for service, purchase, demand and do much more. The key lies in identifying the emotions behind every transaction. This gives every brand a chance to look at every customer as an individual and not just as a data-point.

Another critical aspect is the timing. Why do brands wait for an interested prospect to but products, then expect them to get cross-selled and then run loyalty programs. Why can’t a loyalty be induced with the very first interaction. A famous real estate company based in Mumbai actually went about asking me “why” for this. Simple, consider a prospect who is in Non-Resident Indian based in USA and he managed to do some research about a project in Mumbai and expresses an interest in buying the property. This shows that the particular person is active over Internet. Why cant the real estate company provide him relevant information and provide him some free NetFlix credit… Will that not be something more than expected and even if the person does not land-up buying, he will go out with a positive experience and he will always talk great about the brand. If he wishes to purchase, you add an average of 100.000 USD to your topline. And the strategy is modified accordingly if the consumer is a domestic resident instead.


Fig. 1: Components of a loyalty program

The second most important aspect is to create experiences rather than merely offering freebies. For instance World of Coca Cola store in Vegas encourages a customer experience by free In-store pictures with friends, coke flavors from across globe and much more. It is an exemplary attempt to show how a brand connects with consumer emotions.

While brands do a great job in spending money and efforts for inducing customer loyalty, they miss-out on the engagement front. The key to rewarding loyal customers is two-fold – Identify emotions and Create delightful experiences.

Worth a though…Ain’t it!

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