Leveraging Brand Loyalty Programs

Leveraging Brand Loyalty Programs – June 18, 2014

Overview of the Past

•  Loyalty Programs were often created as a reactive measure to competition, resulting in weak benchmarking and weak understanding of the customer

•  With today’s empowered customer, offering simple “points” or rewards programs is not enough.

Leveraging Brand Loyalty Programs – June 18, 2014

Successful Programs … Only 7-10% of brands provide what the consumer wants: •  A sense of empowerment and a sense of

value

•  Creating incremental dialogue and mutually beneficial behaviour

•  Montreal Transportation Department, Best

Western, American Express, Loblaws.

Leveraging Brand Loyalty Programs – June 18, 2014

How Branding Enhances a Loyalty Program

Leveraging Brand Loyalty Programs – June 18, 2014

•  Allows for top-of-mind recall and

allows individuals to associate their behaviours and interactions with the brand

•  Brand Coherence: Consistent branding

across the program allows the consumer to identify with the brand

Advice for Introducing a Loyalty Program: •  Understand your position: get an outside

perspective of what your customers value (consider hiring a consultant)

•  Set lower expectations, and meet or exceed

them •  Loyalty program has to focus on what the

customers value in order to reach the top of customer’s consideration set

Leveraging Brand Loyalty Programs – June 18, 2014

Putting Loyalty Programs on People’s Radar

•  A true loyalty program is about behaviour

•  Successful programs have infused an

entrepreneurial spirit into their organizations

•  Successful programs are willing to

take risks in communications with customers (new technology, etc.)

Leveraging Brand Loyalty Programs – June 18, 2014

What is a Loyalty Program?

•  Definitions of a loyalty program have

expanded exponentially with CRM, data sets, analytics, etc.

•  What loyalty entails is becoming a

bigger part of the budget

•  Creating successful program requires involvement of various sections of the organization (CMOs, CFOs, COOs, etc.)

Leveraging Brand Loyalty Programs – June 18, 2014

Sixth ‘C’ of Loyalty:

•  5 Cs of loyalty programs: Commitment, Collaboration, Community, Content, Commerce

•  Expanded with the 6th C: Confidence (Organizations must have confidence that they can develop new programs and drive the customer behaviour)

Leveraging Brand Loyalty Programs – June 18, 2014

Unsuccessful Loyalty Programs

•  Programs that alienate: Delta

Airlines (spent-based rewards) •  Programs with flawed processes:

Sears (flawed technology)

•  Programs that do not listen or try to do too much

Leveraging Brand Loyalty Programs – June 18, 2014

J.D. Power and Loyalty Programs •  J.D. Power considers Loyalty Programs when

scoring organizations: •  Looking at how the loyalty program drives

financial success, incremental return and the cost of managing the customers

•  J.D. power helps brands realize what they should

be doing in their loyalty programs

Leveraging Brand Loyalty Programs – June 18, 2014

Affinity Programs That Work Best •  Grocery programs (Kroger, Loblaws) do

new things and speak to their customers •  The #1 challenge for brands is

understanding what rewards the customer wants: cash back, discount, …, ???

Leveraging Brand Loyalty Programs – June 18, 2014

Effective Incentives for Building Loyalty

•  Members seek rational engagement

as well as great experience with the program

•  Customers create rational/emotional connection with the brands and programs

•  The rewards form should reflect on the customers’ needs

Leveraging Brand Loyalty Programs – June 18, 2014

Private Label Brands

•  Incremental spent drives the emotional attachment to private label brands

•  The incentive of these programs comes from the price gap between national brands and private label brands

•  U.S.-based Programs: Kroger and

Target

Leveraging Brand Loyalty Programs – June 18, 2014

Question Period 1.800.747.5150 Access: 5697142

Leveraging Brand Loyalty Programs – June 18, 2014