Engagement Drives Loyalty

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A new report from the Chief Marketing Officer (CMO) Council report indicates that marketers under-value loyalty programs even as customers give the perks, discounts, deals and additional service opportunities high marks.

What makes a loyalty program successful? Both customers and marketers agree: deeper engagement and personalized contact drives loyalty, not mass blast communications and gimmicks.

The Marketer’s View

Most marketers (61 percent) believe that loyalty program participants are the best and most profitable customers. So it is not surprising that an almost equal number of respondents (65 percent) view customer loyalty program investments as a very essential, or a quite valuable part of the marketing mix. Where they fall down is in extracting greater value from customer loyalists. When it comes to in-depth profiling of customers, the vast majority of marketers still only aggregate and analyze limited customer data sets. 73 percent collect basic demographics and 68 percent track the location of members, but critical insights — such as advocacy rates (14 percent), brand loyalty and attachment (27 percent), personal preferences (31 percent), satisfaction levels (33 percent), and product preferences (38 percent) — are not being leveraged.

The Consumer’s View

Today’s consumer loyalist wants essential information delivered through multiple channels in the most relevant, personal and customized way possible.  More than half (58 percent) say they want more compelling personal benefits and services, as well as more relevant offers or individualized deals.

Customers are issuing a very clear warning to marketers: Give me relevant communications that reflect my history and connections to you, or I’ll go elsewhere with my business.

Smart marketers will respond by taking what they know about customer wants, preferences and behaviors and be more targeted, efficient and relevant in their messaging to improve response rates and increase customer gratification and purchase intent.

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