Saturday, March 13, 2010

It's Loyalty Stupid...

KEEP YOUR CUSTOMERS!!! If there is a loyalty mantra out there then that should be it! Even though the economy saw an uptick that shouldn't mean anything in the what the Brookings Institute calls the New Normal. According to their research, once the pent-up demand from the World War Two era of austerity subsided, personal consumption was remarkably stable for three decades, averaging about 62 percent of GDP between 1951 and 1980. And then the great shift began. Personal consumption rose to 64.6 percent in the 1980s, 67.3 percent in the 1990s, and an astounding 69.8 percent between 2001 and 2008. So, the spending is over... And for good reason:
This surge in consumption could not last, because it depended increasingly on unsustainable increases in household debt and declines in personal savings. And most Americans understand this: across the income spectrum, and despite improving consumer confidence, huge majorities now report that they are watching spending very closely and cutting back on how much they spend each week.
Thus, realities hit us square in the face. Now without the excess in spending to sustain brands, like mine and yours, we need to consider as many winning strategies as possible, and loyalty marketing is one of them. According to the CMO Council, loyalty is at the top of the list for strategies to deploy. 
Most marketers (61 percent) believe that loyalty program participants are the best and most profitable customers. So it is not surprising that an almost equal number of respondents (65 percent) view customer loyalty program investments as a very essential, or a quite valuable part of the marketing mix. Unfortunately, only 13 percent of respondents believe they have been highly effective in leveraging loyalty and brand preference among club members, and nearly 20 percent don’t even have a strategy for this. Another 25 percent admit they have not mobilized brand loyalists to become active advocacy agents, either.
However, clearly, we can see that marketers aren't doing such a great job here either... So what's the answer if we can't rely on our marketing teams to deploy a loyalty initiative? The answer: automate! The article continues...
Online channels dominate expected investments as nearly 60 percent of respondents said they planned to make better use of the Web and new community and networking tools to grow and develop loyalty programs. Other key actions for generating a greater ROI from club members include:
  • Personalizing interactions and target messages (51 percent)
  • Increasing frequency and relevance of communications (39 percent)
  • Gathering more insights and intelligence for better customer handling (38 percent)
  • Adding new benefits, incentives and inducements (36 percent)
  • Studying industry best practices and making adjustments accordingly (19 percent)
 It needs to be all about driving transactions and keeping your customers happy about this. There are thousands of ways to skin this cat, but takes a serious commitment to executing what you want and then what you can automate!

Thank you to http://www.flickr.com/photos/intersectionconsulting/3299153594/ for the great picture.

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