Short-term Gains, Long-term Loyalty

BruceKerr

July 12, 2017

Blog_ShortTermGains

The benefits of short-term programs can be substantial. But each promotion should be viewed as a step along the customer journey, building a relationship that fosters consistency and profitability.

Every journey starts with first steps. As loyalty marketers initiate customer relationships and begin the customer journey, those introductory steps may be well-served by short-term promotional programs. As customers perceive the benefits of the relationship, they become more confident, trusting and willing to commit to long-term loyalty.

Though short-term programs may be more time-consuming and effort-intensive for marketers, the benefits can be substantial. Strategic short-term programs help deliver the results loyalty marketers are seeking.

  1. Collect data. Most importantly, these promotions can help build customer data files. Think of each customer interaction as an opportunity to obtain preferences and transactional information. Additional data and analysis makes for a much more optimized program: You can see if and when you need to incent consumers to collect more and redeem more, and emphasize a different product for redemption or other desired activity. Nielsen’s Global Retail Loyalty Sentiment Report from November 2016 indicated that customized offers were very important: 75% of consumers preferred loyalty programs with personalized discounts or promotion offerings.

    As loyalty marketers, we can also make more informed decisions about allocating resources on incentives: more vendor bonus products, direct mailers for a free product, or incentives targeting a specific group of consumers, such as those who have collected but not redeemed points and will receive bonus points for redeeming during a specified time frame.

    Even physical cards that the consumer must present for in-store discounts can be extremely effective. In addition to driving onsite traffic, they provide insights to factors like store location, in-store displays and promotional appeals, as well as the type and number of items the consumer is purchasing.
  1. Shape and consolidate spending habits. In the U.S., the food retail sector is highly segmented. Rare is the household that gets its groceries from a single store. In addition to competitive mainstream grocers, many markets have the added competition of Walmart, clubs, such as Costco and Sam’s Club, and other specialty retailers such as Whole Foods Markets and Trader Joe’s – and that’s not even bringing into play the growing competition from online grocery operations as well as Amazon, which recently purchased Whole Foods.

    Short-term programs can offer incentives to consumers that shift more spend to a particular retailer in exchange for a reward. Ideally, the consumer will see the value in making the shift and ultimately drop one or more of the competitors from consideration.

    The goal is about changing spending habits and creating the momentum for new ones. The consumer needs to see the value in making that change, and a short-term incentive can be the motivator to make it happen.
  1. Generate sales. One eye must always be kept on the bottom line, and a key measurement of the short-term program is sales results. Incentives need to find the balance between motivating purchase and maintaining profitability. Flexibility needs to be baked into the program, so adjustments can be made if necessary to adapt to changes in market conditions, customer demands or other fluctuations. 
  1. Build trust. Short-term programs can stimulate trial with consumers – and if they have a positive experience, they will return. Though these programs may run for a limited time, they can offer multiple opportunities for customer interaction. Customers who have a positive first-time experience will return and become more engaged, setting the table for a deeper relationship.

Short-term programs can effectively achieve these objectives, but they must build toward a larger long-term goal. Each promotion should be viewed as a step along the customer journey, building a relationship that offers consistency and profitability. Marketers should have a clear sense of the brand’s key performance indicators, a vision that should be identified and openly expressed and with which all programs should be aligned.

One final consideration for successful short-term promotions is the importance of leveraging digital resources. Consumers have access through a variety of devices, predominantly smartphones: Nielsen reports that 23% of shoppers participate in a loyalty program via a retailer’s app. With digital promotions, consumers tend to spend more, stretch more and redeem more over the course of the program. As a result, the use of digital resources, from apps to websites, should be a priority. 

The best way to increase digital participation is to market it; doing so creates a direct correlation to the percentage of mobile participants in a program. Whether through email, social media or other channels, raising awareness typically raises engagement.

The first few steps of any journey can be difficult, so lower the barriers and make the decisions easier for consumers with short-term promotions. As they progress along the customer journey, you can continue to motivate action and reinforce loyalty to achieve the ultimate goal: a long-term relationship with your brand.

Customer Experience

Loyalty

Grocery

Retail

CX

Food Retail

About the author

BruceKerr

Bruce Kerr

SVP & Chairman, BrandLoyalty North America

Bringing more than 20 years of executive-level experience to his role as SVP & President, BrandLoyalty North America, Bruce applies his expertise in customer management, analytics, loyalty marketing and international markets to build successful corporate and brand partnerships. Responsible for spearheading expansion in North America, Bruce and his team work with clients to determine strategic alignments, drive increased profits through custom loyalty programs, and develop insight-driven differentiation strategies.

Bruce joined the organization in 1995 and progressed through a series of senior roles. He ultimately oversaw the business development and customer relationship management of all Sponsors within the AIR MILES Reward Program, Canada’s premier coalition loyalty program, which is owned and operated by LoyaltyOne. Bruce joined LoyaltyOne from a senior level business development role at Compusearch.

Short-term Gains, Long-term Loyalty

Aug 27, 2018, 14:37 PM
The benefits of short-term programs can be substantial. But each promotion should be viewed...
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The benefits of short-term programs can be substantial. But each promotion should be viewed as a step along the customer journey, building a relationship that fosters consistency and profitability.

Every journey starts with first steps. As loyalty marketers initiate customer relationships and begin the customer journey, those introductory steps may be well-served by short-term promotional programs. As customers perceive the benefits of the relationship, they become more confident, trusting and willing to commit to long-term loyalty.

Though short-term programs may be more time-consuming and effort-intensive for marketers, the benefits can be substantial. Strategic short-term programs help deliver the results loyalty marketers are seeking.

  1. Collect data. Most importantly, these promotions can help build customer data files. Think of each customer interaction as an opportunity to obtain preferences and transactional information. Additional data and analysis makes for a much more optimized program: You can see if and when you need to incent consumers to collect more and redeem more, and emphasize a different product for redemption or other desired activity. Nielsen’s Global Retail Loyalty Sentiment Report from November 2016 indicated that customized offers were very important: 75% of consumers preferred loyalty programs with personalized discounts or promotion offerings.

    As loyalty marketers, we can also make more informed decisions about allocating resources on incentives: more vendor bonus products, direct mailers for a free product, or incentives targeting a specific group of consumers, such as those who have collected but not redeemed points and will receive bonus points for redeeming during a specified time frame.

    Even physical cards that the consumer must present for in-store discounts can be extremely effective. In addition to driving onsite traffic, they provide insights to factors like store location, in-store displays and promotional appeals, as well as the type and number of items the consumer is purchasing.
  1. Shape and consolidate spending habits. In the U.S., the food retail sector is highly segmented. Rare is the household that gets its groceries from a single store. In addition to competitive mainstream grocers, many markets have the added competition of Walmart, clubs, such as Costco and Sam’s Club, and other specialty retailers such as Whole Foods Markets and Trader Joe’s – and that’s not even bringing into play the growing competition from online grocery operations as well as Amazon, which recently purchased Whole Foods.

    Short-term programs can offer incentives to consumers that shift more spend to a particular retailer in exchange for a reward. Ideally, the consumer will see the value in making the shift and ultimately drop one or more of the competitors from consideration.

    The goal is about changing spending habits and creating the momentum for new ones. The consumer needs to see the value in making that change, and a short-term incentive can be the motivator to make it happen.
  1. Generate sales. One eye must always be kept on the bottom line, and a key measurement of the short-term program is sales results. Incentives need to find the balance between motivating purchase and maintaining profitability. Flexibility needs to be baked into the program, so adjustments can be made if necessary to adapt to changes in market conditions, customer demands or other fluctuations. 
  1. Build trust. Short-term programs can stimulate trial with consumers – and if they have a positive experience, they will return. Though these programs may run for a limited time, they can offer multiple opportunities for customer interaction. Customers who have a positive first-time experience will return and become more engaged, setting the table for a deeper relationship.

Short-term programs can effectively achieve these objectives, but they must build toward a larger long-term goal. Each promotion should be viewed as a step along the customer journey, building a relationship that offers consistency and profitability. Marketers should have a clear sense of the brand’s key performance indicators, a vision that should be identified and openly expressed and with which all programs should be aligned.

One final consideration for successful short-term promotions is the importance of leveraging digital resources. Consumers have access through a variety of devices, predominantly smartphones: Nielsen reports that 23% of shoppers participate in a loyalty program via a retailer’s app. With digital promotions, consumers tend to spend more, stretch more and redeem more over the course of the program. As a result, the use of digital resources, from apps to websites, should be a priority. 

The best way to increase digital participation is to market it; doing so creates a direct correlation to the percentage of mobile participants in a program. Whether through email, social media or other channels, raising awareness typically raises engagement.

The first few steps of any journey can be difficult, so lower the barriers and make the decisions easier for consumers with short-term promotions. As they progress along the customer journey, you can continue to motivate action and reinforce loyalty to achieve the ultimate goal: a long-term relationship with your brand.

Tags :
  • Customer Experience
  • CX
  • Food Retail
  • Grocery
  • Loyalty
  • Retail
Categories :
  • Blog
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Author : Bruce Kerr
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