Source: www.utalkmarketing.com

Organisations have been taking advantage of loyalty schemes ever since the Co-operative (or the ‘Rochdale Pioneers Society’ as it was known then) launched its dividends scheme in 1844. The most notable loyalty system today is probably the Tesco Clubcard, started in the mid 90’s by Grant Harrison and Dunnhumby. Schemes continue to evolve, with Debenhams recently announcing a loyalty system using an iPhone app, helping the brand to interact directly with customers via their phone handsets.

According to the Journal of Retailing and Consumer Services, it is recognised that when loyalty scheme members are happy with the benefits of a programme, they will be less fussy about in-store prices, and more likely to return to the store and provide repeat business .

However, these days consumers are targeted with a variety of cards, vouchers, offers, membership deals and subscription-only loyalty schemes. Many of these soon become ineffective as consumers sign up to gain the benefits, but simply receive mass-mailed marketing and general, non-specific promotions.

A problem of size?

Although many loyalty programmes do function well, there is a perception that these are only run by large companies; smaller organisations are limited to ‘cards to get stamped’ to get a free beverage, for example. Indeed, many mid-sized retailers have hesitated over getting into loyalty because of the perceived barriers to entry. Many retailers believe that loyalty systems, with their complex tracking and prediction algorithms, are both difficult and expensive to implement.

But let us take a step back for a moment. There are many mid-sized organisations which are better suited to loyalty schemes by virtue of their specialism or the nature of their services. Small hotel chains, for example, are in regular physical contact with their customers, presenting a strong opportunity for a bespoke scheme and tailored communications. They also gather a wealth of data via bookings systems, which they could potentially feed into loyalty systems, providing customers with offers which exactly suit their requirements – or offer them new opportunities, encouraging new visits and building up the store relationship with the customer.

Loyalty schemes can certainly help these mid-sized players compete with their larger rivals andengage with existing customers. A tailored experience and custom-fit offers can go a long way to make customers return to the store again and again. It also offers a way of testing new products and services with existing loyal customers, or cross- and up-selling. Tesco’s Clubcard, for example, makes no secret that although most of the discount vouchers sent out are for already-purchased items, two out of every six are for items related to existing purchases, expanding sales opportunities.

A new wave of accessible loyalty

As we have said, many small retailers and organisations believe loyalty systems to be inaccessible because of the cost barriers. However, this is far from the truth – with the latest wave of ‘Software as a Service’ offerings, companies can purchase ‘pay as you go’ access to loyalty solution, based on a rental, rather than purchase model, eliminating many of the costly outgoings.

Indeed, Finlandia (a chain of boutique independent hotels in Finland) is using a highly effective loyalty programme, and pays for its loyalty software based on the number of customer sign-ups to the scheme. Finlandia also charges customers €26 for its loyalty card for three years, so the procedure is quite painless from a budgetary point of view.

Once organisations do overcome the perceived barriers, loyalty schemes not only increase customer ‘stickiness’ but also enable organisations to engage with customers, improving brand experience both in-store and out. It can also act as a catalyst for business and a safety net in adverse times.

Today’s need for loyalty

To put this in context, customers included in Finlandia’s loyalty scheme currently account for 5-25% of turnover. During the downturn, overall sales dipped by 20%, but sales from customers in the loyalty scheme only dropped 10%, clearly showing the value of such a scheme properly executed.

Although retailers can hesitate over loyalty schemes, mid-sized retailers should not flinch from the opportunities which they can present. In fact, with many of the issues now a question of perception, rather than of fact, and with a loyal customer often making the difference between a lean year and a good year, now is certainly the time to get involved.

by Jon Wurfl, Retail Solution Principal, SAP

At a time when retailers struggle to retain and attract key segments of their shopping audiences, customer loyalty management, practiced as a strategic element of their business plans, can drive sustainability and differentiation into the enterprise. One mistake many retailers make: Viewing loyalty programs as a short-term source of brand buzz to jumpstart sales and lessen the pain of the tough economic climate.

Done right, retail loyalty programs can indeed “bring people back to the brand.” A successfully delivered loyalty program has immediate benefits to a retailer’s top line. In this economy we’ve witnessed  shoppers switch to every-day low prices in a dash to get economic benefits as soon as possible. But loyalty, if delivered successfully over a period of a time (at least four or five consecutive quarters), can go from painkiller to vitamin. If you put in the time and effort to develop a well-thought-out loyalty program that truly engages with customers on their terms, the program will pay dividends that go far beyond just a quick hit of interest.  Our studies show retailers have the opportunity to drive the top line of their revenue by 20 to 25% annually thanks to a well-executed loyalty program.

To keep receiving the benefits of this organizational “vitamin,” however, you have to keep at it, keep working on your loyalty program, constantly refining the benefits, engaging regularly with your shoppers  to understand their wants and needs. Many programs I have seen don’t offer rewards that are truly in line with what members want. It is especially important for you to have “wow” perks for your most valuable customers – tickets to a home basketball game, for example, when you know the member is a fan.  To feel understood is thrilling for anyone, especially customers.

You can also give special access as a benefit for program members. For example, a book retailer could provide the first chapter of a popular author’s new book to his devoted fans. This creates a sense of entitlement as an insider, which can be even more potent than the perk itself. In this example, it costs the book store practically nothing to provide access to a download of the chapter, while being granted that access means a lot to customers who are fans of that author.

The point here is that once you start “doing” loyalty you must keep innovating your loyalty program over time as opposed to going backwards. Your customers are ever changing, and your program has to evolve along with them. If you can maintain your focus on the customer –  and your loyalty program reflects that focus – you can help give your organization the health-giving vitamin it needs to sustain growth.

Source: www.utalkmarketing.com

Jun 20, 2011

Background

Gift experience retailer Red Letter Days has been running an affiliate programme for five years. The affiliate channel has been a major focus for the organisation over the past few years and significant effort has been invested in growing this channel. In 2008 the programme was expanded to a second network, thereby increasing the overall presence of the Red Letter Days brand across the affiliate industry as a whole.

For Red Letter Days one of the main aims was to focus on consolidating affiliate relationships, and to continue to motivate affiliates to promote the Red Letter Days programme by engaging with them on an individual basis. The overall objective was to increase affiliate sales turnover by 15% in 2010.

Strategy

In the last few years Red Letter Days has seen its affiliate programme go from strength to strength; from a channel that only contributed 12% of total online sales, it has grown to a programme that now accounts for 30% of all its online sales.

Red Letter Days felt it was important not to neglect the foundation their success had been built on, or the affiliates who helped them achieve this. So its strategy focused on forging closer than ever relationships with its affiliate partners – both by getting out to meet them in face-to-face meetings and by building on its already thriving its incentive scheme to encourage greater than ever affiliate activity.

Implementation

In 2010 Red Letter Days hosted its first official affiliate day. The day was designed to bring Red Letter Days closer to their affiliates and to give them a chance to get closer to the brand by trying out some of the experiences offered by Red Letter Days.

It also set out to meet as many affiliate partners throughout the year. These were not necessarily the top performers but affiliates that Red Letter Days had considered significant contributors to their success. Meeting their affiliates would give the retailer a better understanding the challenges they faced and find out what could be done to improve the performance of their programme.

Red Letter Days had already been running a quarterly incentive scheme since 2009, giving affiliates the opportunity to push themselves through sales tiers to receive their desired prize. As the quarterly incentive scheme had been running for a couple of years, Red Letter Days had to ensure that it had an even more attractive proposal for their main Q4 Christmas campaign.

For Q4 2010, Red Letter Days offered affiliates the chance to win a trip to South Africa. The holiday was determined by a prize draw, but with a twist. Affiliates earned tickets into the draw in return for fulfilling certain criteria e.g. uploading a particular type of creative, or selling a particular product, rather than the traditional model of rewarding revenue generation alone.

Red Letter Days announced new ways to earn extra tickets into the draw on a weekly basis from October to December, to keeping affiliates continually engaged with the Christmas campaign. The winner was announced on YouTube in the form of a video showing the final draw.

Meanwhile Red Letter Days also honed its voucher code offering. The use of voucher codes has always been an issue at the forefront of the affiliate industry. Red Letter Days tackled this by developing a solution that displayed or hid the basket promo code box based on the type of referring affiliate. This ensured that customers driven from non-voucher code sites would not see the box (and therefore not be prompted to search for a voucher code), whereas visitors from a voucher code site would see the box.

The next stage of this development incorporated the embedding of a “deal id” in the inbound URL, allowing Red Letter Days to create bespoke deals for individual affiliates. The “deal id” was associated with the affiliate id therefore making it impossible for another affiliate to replicate the offer. Deals can only be obtained by clicking through from the relevant affiliate site, therefore giving the affiliate’s customer a higher call to action and ensuring that the customer returns to the affiliate site to activate the deal; creating stickiness and loyalty.

Results

Through strong communication and close partnerships the Red Letter Days programme continues to grow; the number of active affiliates contributing to this success has increased by 300%.

Between 2009 and 2010 online sales through the affiliate channel grew by 20%. In 2010 the average affiliate basket size grew by 20%, from £90 to £108. URL based deals has driven an increase of 212% in traffic and 68% in revenue from content sites.

LONDON, June 3, 2011- - Beginning today, in partnership with the first club™,experiences specialist Red Letter Days will be offering its customers digital rewards.  the first club™ is a global provider of instant digital rewards, designed to engage consumers with millions of options of the latest in downloadable content including music, games, mobile apps, eBooks, and software offered instantly worldwide.

“We’re very excited to be expanding Red Letter Days’ offering to include digital rewards. They have embraced digital rewards as a new phase in customer engagement, and we’re ready to help enhance their programme of voucher options with additional redemption possibilities.”  said Denis Huré, CEO and co-founder of the first club™.

Relevant Rewards for today’s Digitized Consumers

In a report called Loyalty Looking Forward released earlier this year, the first club™ found that 48% percent of customers spend more with a company that offers products relevant to them.  A “relevant reward” is a product available at a time and place of the customer’s choosing, one that the customer intends to buy anyway—a current “want.” In other words: Time, Place, and Demand.  By providing millions of titles of branded digital content such as eBooks, games, music and software, the first club™ satisfies all relevant reward logistics.

Digital rewards offer Red Letter Days a flexible reward alternative to integrate into its existing offering.  Because there is no “physical” requirement, the first club’s digital rewards can be instantly implemented into existing programme elements; adjusted to reach new targets; and measured using any existing CRM process.

According to Andy Ling, Head of Product Development at Red Letter Days, “That’s one of the most important factors about the first club’s digital rewards. Their program is easy to implement into our existing programme, giving us a flexible cost-effective solution. Add to that, the concepts of relevancy, straight-forwardness, and attainability, and digital rewards promise to keep customers coming back to Red Letter Days.”

the first club™ currently provides the latest in digital content to brands all over the world, and its licensing agreements with music companies, publishers and game developers means that Red Letter Days members will have access to the most current and largest library of digital content that is available in the reward programme market.

To learn more about the digital rewards programme being implemented by Red Letter Days, or to speak with Denis Huré, CEO and co-founder of the first club™, please email denis@thefirstclub.com or for press inquiries, please contact Vanessa Horwell at Vanessa@thinkinkpr.com.

###

AboutRed Letter Days Ltd.
Founded in 1998, Red Letter Days is the UK’s leading experience company with two decades of providing successful reward and recognition solutions to companies across the UK. The company is owned by two of the country’s foremost entrepreneurs Peter Jones and Theo Paphitis.
www.redletterdaysb2b.co.uk

About the first club™
the first club™is the first global solutions provider to present a new, better, and more effective way to offer rewards and build loyalty by delivering relevant, digital content that is instantly gratifying to today’s consumers.  the first club™ digital solutions can enhance loyalty, promotions, incentives and any type of rewards programs by offering the latest in premium content that will engage consumers worldwide, with attainable low-level rewards. Consumers can redeem rewards instantly to access the very latest in digital content in 12 languages, including millions of music tracks, mobile phone apps, games, eBooks, audio books, and soon casual games, digital magazines, movies and TV shows to engage with their favourite brands. the first club™ solutions are easily integrated into existing loyalty and reward programs, are cost-efficient and scalable to encourage low level reward redemption, increase customer loyalty and create additional revenues for brands.

For more information about the first club™  please visit www.thefirstclub.net, or experience the first club™ white label consumer site at www.thefirstclub.com.

 - END –

Challenge: Acquire loyalty club members.

Solution: Add a layer of non-proprietary online rewards to facilitate instant redemptions.

Results: Since complementary program implementation, 25 percent of the instant online rewards redemptions have been from new members.

It may seem intuitive that Sapphire Technology, a manufacturer and supplier of graphics cards and mainboards, would offer its loyalty club members digital rewards. After all, it has a severe-looking, cross-armed female avatar staring down anyone daring to visit the rewards page. But it did take Sapphire a few months to offer that aspect of instant gratification to its Sapphire Select Club members.

In June 2010, Sapphire tapped Santa Ynez, Calif.-based online instant rewards and incentive service TheFirstClub.com to offer loyalty club members digital prizes.

SSC members who purchase products from Sapphire are eligible for online currency that can be redeemed for downloadable music, games, software, mobile applications, audio books and eBooks. Movies may also soon be available.

Thompson says Sapphire placed online advertisements and sent emails to its loyalty club members to alert them to the new rewards. Information also appeared on the website, in newsletters and on social networks.

These new rewards also meant adding a membership tier. SSC Silver membership provided the old rewards. SSC Gold membership added in the digital rewards, as long as Gold members completed a form requesting their graphics card serial numbers in addition to the data the overall membership form requests—name, email address, and more specific information such as birth date, gender, areas of interest, product interest and opt-in possibilities for Sapphire’s email list and “screened third party” marketing.

Depending on the purchase, Gold members receive vouchers for 25, 50 or 100 “ClubCoins,” which they can redeem for digital rewards, Thompson says. Since including the digital prizes in the SSC, Sapphire’s run six separate rewards campaigns.

Retail rewards programs are gaining in popularity, but the quick-serve industry hasn’t quite figured them out.

For years Brandon Ansel frequented Steak n Shake on a monthly basis. He was a regular, a loyalist in the purest sense. Slowly, however, his habits changed, and Steak n Shake faded completely from his mealtime routine for more than a year.

Then one day Ansel got a promotional coupon in the mail, and he was back on the horse.

“That coupon came because [Steak n Shake] knew I was once a regular, and it got me back in the door,” he says. “I’ve now been back there five times in the last month alone.”

Ansel owns and operates a Biggby Coffee and a Roly Poly in the town of Jackson, Michigan, and recognizes the importance of the loyalty programs he has implemented at his two quick-service locations. Even though Ansel knows he already has a loyal base of customers, he also knows habits change, and a successful loyalty program, he says, helps guard against the fallout from customers’ fickle dedications.

“We are creatures of habit, and loyalty programs reinforce habits,” Ansel says. “If we don’t have a way to constantly stay in front of customers, we run the risk of them forgetting about us and developing other habits.”

Evidence seems to be growing in support of the potential power loyalty programs could have in the quick-service sector. A recent study conducted by First Data, an information commerce provider that processes point-of-sale transactions, surveyed more than 2,400 U.S. consumers about their attitudes and behaviors toward loyalty programs in the retail and travel industries. It concluded that consumers are more eager than ever before to sign up for reward programs.

But while 60 percent of quick-serve loyalty program participants report using their rewards membership “every time” or “most times” when making a purchase, the survey also shows that the quick-service industry has the second-lowest rate of participation in retail loyalty programs, edging out only sports teams. According to the study, the low rate of quick-service participation in these programs is “primarily due to the limited availability and newness of such programs.”

The time seems to be ripe for owners and operators to step up their loyalty efforts.

“For operators, loyalty programs are first and foremost a great way to bring better insight into a consumer base,” says Stuart Kiefer, vice president of loyalty solutions at First Data. “Most of these quick serves don’t know much, if anything, about their individual consumers, and the nice thing is that loyalty programs provide all the metrics you need to know your customer base.”

But gathering that data is the easy part, and experts say there is more to running a successful loyalty program than simply offering a frequent-eater card or rewards coupons.

Chuck Sullivan is director of hosted solutions for Radiant Systems, which provides technology solutions for loyalty programs in the hospitality and retail industries. He says the most critical consideration when rolling out a loyalty program is its ease of use on the front end. “It cannot have any impact on the speed of service,” Sullivan says. “You can have the best loyalty program in the world, but if it slows down your line it defeats the purpose.”

“The nice thing is that loyalty programs provide all the metrics you need to know your customer base.”

Sullivan says quick-service merchants should also make sure the program is as simple as possible for customers. If they have to jump through complicated hoops to gain their reward, he says, the program will not be effective. Finally, the rewards have to be meaningful to each individual customer.

Bob Paine, restaurant category consultant for Affinity Solutions, says operators should not only consider broad-based loyalty programs, but also ones that focus on a niche product or individualized consumer reward. For example, Paine says he sees great success in Dairy Queen’s Blizzard Fan Club, which rewards new members with a free Blizzard Treat e-mail coupon when they sign up as well as a buy-one-get-one e-mail coupon on their birthdays.

“The quick-service ice cream business has been keen on the idea of birthday loyalty rewards for some time now,” Paine says. “Not only does a free birthday Blizzard sound good, it’s also an opportunity for Dairy Queen to sell a bigger product when customers come in to claim their reward.”

Over the past year, banks have been using technology to create new channels of communication, with the hope of deepening consumer loyalty. As other traditional benefits are swept away, can a multichannel approach be enough keep consumers from switching.

Last month, market research firm eMarketer released a report that banking online deepens customer loyalty among banks. This research should be valuable to banks considering a J.D. Power & Associates study found that retail banking consumers are shopping and switching banks faster than ever.  The main reason being life circumstances such as; divorce, unemployment or moving.

The eMarketer study also mentioned the preferred banking method for U.S. consumers was online banking (44%) for ages 18 – 54 in 2010 and second most popular for those age 55 and older.  Not surprisingly, for 18 – 34 year olds branch banking was the lowest among the age groups at 20 percent.  This same age group pretty much never uses mail (1%) and had the highest usage of mobile banking at 4 percent.

With so many channels of communication available, the study determined that “online banking customers are more likely than offline customers to take advantage of additional services with the same bank,” and in the end, “are less likely to switch to another bank.”

By HMA Administrator

Loyalty: Looking forward

In any industry, loyal customers are the cornerstones of successful businesses.

In consumer-centric industries, the loyal customer is one that is familiar with an offered product or service, inclined to have a positive impression of the company or brand, and represents the best opportunity for a repeat transaction. For B2B companies, the relationships established with loyal clients will often lead to more clients, and repeat business is the foundation upon which growth is built. These are commonly accepted beliefs of business and are the rationale behind loyalty programs.

Loyalty programs are generally acknowledged as necessary and useful, yet everyone seems to have a different opinion on their inherent value. Are they holdovers from a bygone era, where a more diverse marketplace and a less bargain-thirsty customer base necessitated greater effort to create and maintain loyal customers? Or are they integral business tools, still conferring considerable advantages on those companies that wield them well?

To download the full white paper, you need to register as a member on this site.

http://hma.hotelworldasia.com/content/white-paper-state-loyalty-industry

Written by Jill Goldworn & Denis Huré ~ the first club™

The state of the loyalty industry and its digitized, instant future -

In any industry, loyal customers are the cornerstones of successful businesses, in consumer-centric industries, the loyal customer is one that is familiar with an offered product or service, inclined to have a positive impression of the company or brand, and represents the best opportunity for a repeat transaction.

For B2B companies, the relationships established with loyal clients will often lead to more clients, and repeat business is the foundation upon which growth is built. These are commonly accepted beliefs of business and are the rationale behind loyalty programs.

Loyalty programs are generally acknowledged as necessary and useful, yet everyone seems to have a different opinion on their inherent value.

Are they holdovers from a bygone era, where a more diverse marketplace and a less bargain-thirsty customer base necessitated greater effort to create and maintain loyal customers? Or are they integral business tools, still conferring considerable advantages on those companies that wield them well?

More importantly, do loyalty programs work in their current state? Is it still effective to offer pieces of main product as an enticement for repeat business?

The simple answers are “sometimes” and “somewhat.”

The solutions to the challenges faced by loyalty programs and the way forward for the loyalty industry lay in the digital realm: the adoption of digital rewards, the acknowledgement that consumers are seeking more relevant and redeemable rewards at their fingertips, and the implementation of loyalty strategies that leverage the latest technology to meet consumers’ needs and desires.

Let’s look at the numbers: some 71% of marketing decision makers said that loyalty schemes have become more vital to successful business over the last two years, according to a study by GI Insight released in early 2010.

The total loyalty market in the US remains incredibly robust, as measured by Colloquy1 at 1.807 billion individual programs in 13 different segments. Yet a survey by the Chief Marketing Officer Council found that 32% of consumers feel that program participation holds “little to no value,” while 37% believed individual rewards held even less value, all of which presents a loyalty paradox.

These findings tell us that loyalty programs are at a crossroads, and that while they seem certain of occupying a position of importance for most businesses, they will take a much different form in the future than they do today.

Consumer needs have evolved, technology has evolved and so will loyalty programs, driven by forward-thinking companies in step with technology and consumers’ constantly evolving attitudes, to provide relevant, enticing digital rewards.

To download the entire whitepaper, please visit:

www.thefirstclub.net/en/white-papers

About the first club™
the first club™ is the first global solutions provider to present a new, better, and more effective way to offer rewards and build loyalty by delivering relevant, digital content that is instantly gratifying to today’s consumers.  the first club™ digital solutions can enhance loyalty, promotions, incentives and any type of rewards programs by offering the latest in premium content that will engage consumers worldwide, with attainable low-level rewards. Consumers can redeem rewards instantly to access the very latest in digital content in 12 languages, including millions of music tracks, mobile phone apps, games, eBooks, audio books, and soon casual games, digital magazines, movies and TV shows to engage with their favorite brands. the first club™ solutions are easily integrated into existing loyalty and reward programs, are cost-efficient and scalable to encourage low level reward redemption, increase customer loyalty and create additional revenues for brands.

The world is arguably undergoing one of the greatest media transformations in history. While the internet has been an evolutionary and revolutionary step, thanks largely to Apple, the mobile device has turned into a personal computer in the consumer’s pocket – and one which is always available and always turned on – offering marketers a whole new gateway to new and stronger customer relationships, according to Garret Ippolito of MasterCard.

We live a mobile lifestyle. This lifestyle has been fuelled by the near ubiquitous penetration of messaging devices. You can’t escape it. Video screens are talking to you in the elevator, when pumping petrol or riding in a city taxi. How we consume media has fundamentally changed. Marketers have been treading slowly into the mobile pool. But we are at a point where it is critical to engage customers via the mobile device, creating whole new ways to experience your loyalty programme and enhance its value.

The number of global mobile subscribers is now at least double the number of global internet users and, as mobile internet usage penetration increases, these figures are starting to converge. In Western Europe and North America, the market has already hit a 3G penetration inflection point (3G being the technology backbone upon which smart phones operate). As such, the mobile era has truly arrived. The key question, then, becomes whether or not marketers can risk others solidifying customer relationships, or should they do it themselves?

World demographics are also rapidly changing. In East Asia, up to 60% of some country’s populations are under the age of 30. In the US, the second fastest growing age segment is under 35. Much of the online usage changes we are witnessing are being driven by the younger generation (for example, Twitter, Hulu, Shop Savvy, and FourSquare). This demographic is also the most mobile savvy. On Facebook alone, there are more than 65 million active mobile users (incredibly, 1 million users commented on their friends’ status changes via mobile handsets within the first 24 hours of this feature’s launch). This is a testament to the power of the mobile channel. But no one in the loyalty arena has yet locked in their relationship with this up-and-coming, mobile-savvy demographic. This is clearly an opportunity for loyalty practitioners.

So, in venturing into the mobile realm, it is critical not to have your mobile strategy dictated by the technology itself. Many mobile strategies go astray as companies do not fully understand how their customers use their mobile devices, instead adopting tactics merely because they want to be first, because their competitors are active in the space, or because it is seen as being ‘trendy’. Rather choose a strategy and tactics that support your business goal of solidifying customer relationships.