BrainTrust Query: Lack of Loyalty Program Engagement = Opportunity
Through a special arrangement, presented here for discussion is a summary of a current article from the Hanifin Loyalty blog.
"While the average U.S. household has enrolled in more than 18 programs, they are active in only 8.4."
I’ve been hearing that statistic from the 2011 Colloquy Loyalty Census from presenters at quite a few conferences I’ve attended over the last few years. I’ve even used it.
But an informal survey of a close group of colleagues in the business tells me that the average business person probably belongs to about 40 loyalty programs while the average citizen who lives and shops mostly locally belongs to a figure closer to the Colloquy number. Our group counted membership on average in 11 airline programs, seven national retailers, six hotels, three rental cars, two credit or debit cards, two in pharmacy, two in gaming, and at least seven more composed of movie theaters, local restaurants and local merchants. We didn’t count Groupon Rewards, registered card programs, Plink, Shopkick, LevelUp, Belly, Perka, etc.
Of those upwards of 40 programs, our survey group came up with a total of no more than 10 that we remembered enough to acknowledge membership and even less that we felt influenced our next purchase decision. True engagement is probably closer to 25 percent than the 40 percent reported by Colloquy.
Give marketers the nod for driving membership totals through the roof. Unfortunately, the tougher task of engaging members for steady visit and purchase, increasing lifetime customer value, is where we fall down.
Here are a few "Loyalty Truths" that you can take away from this exercise:
- Realize that launching your loyalty program might be the easiest thing you ever do. Make sure you do the work needed to ensure that your program will make a difference in the minds of your customers and keep them coming back, even helping them overcome service failures.
- You’ve got to create your own definitions of an "active customer," "redemption rate" and "churn" that fit to your business. The right formulas are influenced by sales cycles, accounting practice, and regulatory concerns, not to mention competition.
- Realize that customer engagement is not just one step in the loyalty value chain towards increased profitability. Engaging the customer (now your program member) has to be a sought after goal at all points along a lifecycle of interaction. Regardless of new customer or old, low value or high, online or offline, engagement is the first step in triggering the next purchase.
- Remember that customer experience is not something you isolate and polish like a new car. Every interaction between your brand and the customer contributes to an overall "customer experience," over time accruing to create positive or negative brand impressions.
- Your loyalty program should be integral to your customer experience and you should never skimp budget on analytical support that unlocks a clear view towards program effectiveness.
What rewards approaches are required to stand out amid the clutter of loyalty programs? What do you think most programs are still missing?