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One-Size-Fits-All is Not An Effective Loyalty Strategy

Consumers’ wallets are filled with loyalty program cards these days. Yet, a recent report by the CMO Council revealed that…

54% of consumers polled feel that programs lack personalized messaging and valuable rewards.

This consumer sentiment is one of most significant challenges for loyalty marketers. Advancing programs beyond basic structure must be founded on the collection and utilization of customer data, which was also one of the greatest deficiencies the study identified. Most marketers do collect demographic and transactional information, but just one third capture product preferences or personal data of members. Also, social media monitoring is another level of customer data that provides insight into changing customer expectations and brand loyalty. Unfortunately, many companies do not have plans to monitor social media nor have strategies to engage the customer in a meaningful dialogue.

As a result, loyalty programs continue to operate without realizing greater operational efficiencies. American Airlines, the pioneer of the frequent flier program, is an example of the contrary. The company’s AAdvantage loyalty program famously pulls in more than $1 billion annually. Dick’s Sporting Goods is another company that continually refines their ScoreCard Rewards program and communications to create relevant dialogues and build profitable customer loyalty.

When nearly 700 consumers were asked to consider which programs stood out as the best, the most common answer was “Don’t know”. The survey also polled over 600 marketers about who they believed best performed in leveraging loyalty to optimize customer lifetime value. A defining characteristic of the design of each successful program is the utilization of customer insight as a key driver in all communications.

Fortunately, companies continue to understand the immense opportunity for creating profitable relationships through personalized and valuable loyalty programs. Marketers are standing firm for the growth and development of these programs, both at a financial and an operational level.