Loyalty Programmes

The new decade has brought with it the real prospect of economic recovery. During the recession many companies focused on customer retention, but an improving economy presents fresh opportunities for customer acquisition. However, the mistake that many marketers will make at this point is to neglect existing customers in favour of attracting new ones. Nevertheless, management of existing customers should always come first, no matter what level of attention is being given to prospects.

Customer loyalty programmes provide endless opportunities to understand consumers and their spending habits. More importantly, they provide companies with relevant information to target their marketing communications in a customised manner, thus increasing their profits.

Through the use of loyalty schemes, the database becomes a company’s most strategic asset and can help develop customer loyalty at a time when consumers are re-assessing their shopping habits. In fact, a customer loyalty program can help you to increase profits by bringing your data to life and focusing on four objectives to improve profitability:

• Get more new customers (acquisition)
• Get existing customers to (retention):
  • Spend more often
  • Spend more per transaction
  • Reduce attrition
• By encouraging product switching from lower margin to higher margin products

Loyalty marketing is not new – it is just misunderstood. It is not about loyalty rewards or plastic cards. It is about using customer transactions to understand their behaviour, what they are (or will be) worth to you, and then finding ways of keeping the profitable customers you want and persuading them to spend more with you.

Most people are familiar with retail loyalty, and the sector is indeed a leader in the field, but a loyalty scheme can work in almost any sector.

If you would like more information on how we can help your business with loyalty marketing, feel free to contact us