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Maximizing loyalt
Maximizing loyalty y 2. Invest: Punch cards are quick to implement, cost-2. Invest: Punch cards are quick to implement, cost-
effective and simple to manage, but they miss the effective and simple to manage, but they miss the
mark in terms of knowing who customers are (that
program ROI
program ROI mark in terms of knowing who customers are (that
is, contact information and email address); what
is, contact information and email address); what
they buy (integrated with inventory management);
they buy (integrated with inventory management);
and why they value a specific business. The most
and why they value a specific business. The most
By Michael Gaviny Michael Gavin
B successful loyalty programs do much more than
successful loyalty programs do much more than
Merchant Warehouseerchant Warehouse
M simply reward customers with free cups of coffee.
simply reward customers with free cups of coffee.
Merchants must think strategically and appreci-
Merchants must think strategically and appreci-
W of ate the value of their customer-base data. Loyalty
h
hether they provide cash back, special ether they provide cash back, special
ate the value of their customer-base data. Loyalty
offers or another form of reward, loy-fers or another form of reward, loy-
programs are gateways to gather data that enables
programs are gateways to gather data that enables
alty programs are designed to keep cus-lty programs are designed to keep cus-
a
delivery of relevant, targeted offers and rewards,
delivery of relevant, targeted offers and rewards,
W tomers coming back. And in the United tomers coming back. And in the United
and opens dialogues with customers regarding new
States, suc and opens dialogues with customers regarding new
States, such programs have more than 2 billion members, h programs have more than 2 billion members,
products, merchant expansion and more.
products, merchant expansion and more.
according to The Billion Member March: The 2011 Colloquy ding to The Billion Member March: The 2011 Colloquy
accor
Previously, this would have been daunting and
L
Loyalty Census.oyalty Census. Previously, this would have been daunting and
costly, but thanks to myriad new technologies,
costly, but thanks to myriad new technologies,
including tablet-based POS and cloud-based e-mar-
Decades ago, the airline and hospitality industries began ecades ago, the airline and hospitality industries began
D including tablet-based POS and cloud-based e-mar-
keting tools, there's no excuse to not think big. With
leveraging frequent flyer and point-based programs to
leveraging frequent flyer and point-based programs to keting tools, there's no excuse to not think big. With
strategizing, planning and leveraging new tech-
recognize and reward their most loyal customers. Loyalty strategizing, planning and leveraging new tech-
recognize and reward their most loyal customers. Loyalty
nologies, small businesses can efficiently and cost-
programs spread quickly to the credit card realm, and
programs spread quickly to the credit card realm, and nologies, small businesses can efficiently and cost-
effectively implement programs similar to those of
then to major retailers, grocery chains and fast-food opera-
then to major retailers, grocery chains and fast-food opera- effectively implement programs similar to those of
tors. Over the past several years, smaller merchants like
tors. Over the past several years, smaller merchants like their big-box neighbors.
their big-box neighbors.
local sandwich shops have accelerated implementation of
local sandwich shops have accelerated implementation of
3. Think mobile: According to the 2013 Maritz
loyalty programs, whether via punch cards (for example,
loyalty programs, whether via punch cards (for example, 3. Think mobile: According to the 2013 Maritz
Loyalty Report US Edition, 73 percent of smartphone
buy 10, get one free) or through POS integrations typically Loyalty Report US Edition, 73 percent of smartphone
buy 10, get one free) or through POS integrations typically
users are interested in interacting with loyalty pro-
tracked through key tags. users are interested in interacting with loyalty pro-
tracked through key tags.
grams via mobile devices. The application market-
grams via mobile devices. The application market-
place is flooded with new mobile loyalty options
According to Colloquy's The Rules of Engagement: Loyalty place is flooded with new mobile loyalty options
According to Colloquy's The Rules of Engagement: Loyalty
for merchants.
in the U.S. and Canada, the average U.S. household is
in the U.S. and Canada, the average U.S. household is for merchants.
enrolled in more than 18 loyalty programs. But only 17
enrolled in more than 18 loyalty programs. But only 17 Mobile app solutions deliver everything from tai-
Mobile app solutions deliver everything from tai-
percent of program enrollees noted that loyalty programs
percent of program enrollees noted that loyalty programs lored loyalty programs to integrated payments and
lored loyalty programs to integrated payments and
are "very influential" in their purchasing decisions. So, white-label application development. And mobility
are "very influential" in their purchasing decisions. So,
white-label application development. And mobility
while merchants evaluate the merits of new and existing offers a huge upside in terms of redemption activ-
while merchants evaluate the merits of new and existing
offers a huge upside in terms of redemption activ-
loyalty programs, the question remains, how much influ- ity, overall data capture, customer communications
loyalty programs, the question remains, how much influ-
ity, overall data capture, customer communications
ence do these programs have on consumer engagement and more. Investigating these options is a must.
ence do these programs have on consumer engagement
and more. Investigating these options is a must.
and bottom-line revenues?
and bottom-line revenues?
ACI Worldwide reported in March 2011 that 85 percent
ACI Worldwide reported in March 2011 that 85 percent
Perhaps the challenge lies within the programs – the value
Perhaps the challenge lies within the programs – the value of loyalty program members reported they hadn't heard
of loyalty program members reported they hadn't heard
delivered to consumers and the communication about from the merchant promoting the program since the day
delivered to consumers and the communication about
from the merchant promoting the program since the day
merchants' incentives and offers. Do consumers under-
merchants' incentives and offers. Do consumers under- they'd joined. New technologies deliver abundant oppor-
they'd joined. New technologies deliver abundant oppor-
stand how to earn points and rewards, as well as the con- tunities to not only establish loyalty programs, but to do
stand how to earn points and rewards, as well as the con-
tunities to not only establish loyalty programs, but to do
ditions for redemption? Is the program generic for all, or
ditions for redemption? Is the program generic for all, or them right.
them right.
are rewards tailored to individual needs? Are merchants
are rewards tailored to individual needs? Are merchants
tracking program effectiveness? These questions highlight Loyalty programs require a strategy, legwork upfront, and
tracking program effectiveness? These questions highlight
Loyalty programs require a strategy, legwork upfront, and
just a few challenges in today's loyalty program environ-
just a few challenges in today's loyalty program environ- ongoing evaluation and management. For those who do
ongoing evaluation and management. For those who do
ment − especially for small and midsize business owners.
ment − especially for small and midsize business owners. their homework, the return on investment (ROI) will be
their homework, the return on investment (ROI) will be
there, as will opportunities to drive additional revenue.
Three tipsps
Three ti there, as will opportunities to drive additional revenue.
As Merchant Warehouse Senior Vice President, Sales, Michael s Merchant Warehouse Senior Vice President, Sales, Michael
A
So what should merchants do? Understanding what it hat should merchants do? Understanding what it Gavin is responsible for day-to-day management of the com-
So w
Gavin is responsible for day-to-day management of the com-
ta
takes to deploy and manage an effective loyalty program kes to deploy and manage an effective loyalty program pany's direct sales, as well as leadership of all sales activities
pany's direct sales, as well as leadership of all sales activities
i is esssential. Following are three tips to assist with that:s esssential. Following are three tips to assist with that:
within the company's agent channel. He has served as a key
within the company's agent channel. He has served as a key
leader within the organization since joining the company in late
leader within the organization since joining the company in late
1. Have a program: For most brick-and-mortar 1. Have a program: For most brick-and-mortar
2000. Merchant Warehouse's Genius Customer Engagement
business owners, loyalty programs help the bottom business owners, loyalty programs help the bottom 2000. Merchant Warehouse's Genius Customer Engagement
Platform is a single, intuitive platform that integrates every trans-
line. They provide customer engagement and com-line. They provide customer engagement and com- Platform is a single, intuitive platform that integrates every trans-
action technology, loyalty program and more. Contact Michael at
munication opportunities, keep customers coming munication opportunities, keep customers coming action technology, loyalty program and more. Contact Michael at
mgavin@merchantwarehouse.com. For information on the com-
back, and offer extensions for referring friends, back, and offer extensions for referring friends, mgavin@merchantwarehouse.com. For information on the com-
pany, visit http://merchantwarehouse.com.
product-specific promotions and more. product-specific promotions and more. pany, visit http://merchantwarehouse.com.
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