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Changing The Loyalty Program Conversation

Dec 20, 2014

Written by: Mark Pearson
(View Author Bio)

The programs that “get it right” and earn genuine loyalty don’t just repurpose an old tactical model or copy the competition.

Loyalty programs improve lifestyle marketing 

Overview

The current loyalty program environment is challenging but rife with opportunity. Many poorly designed programs are driving loyalty fatigue and mercenary loyalty (paying for loyalty). However, there are more loyalty memberships than ever before and those companies that are successful in driving engagement and true loyalty are experiencing significant returns.

The programs that “get it right” are unique and create or reinforce differentiation in the marketplace. The best place to start is by changing the conversation from loyalty to lifecycle – identifying the critical touch points and behaviors that drive true loyalty.

The Customer Lifecycle

The customer lifecycle differs by industry, client, brand, product or service and even customer segment. It can be complex and is not always linear. In general, however, the customer lifecycle is comprised of four stages.

ACQUIRE

The acquire stage focuses on driving awareness, consideration and trial. While loyalty programs traditionally kick in after acquisition, the critical seeds of loyalty are planted in this stage. Additionally, loyalty programs are often leveraged as a value-added benefit to drive acquisition.

DEVELOP

The develop stage is the first opportunity to build upon the foundation of loyalty that was created during the acquisition stage. It’s about getting a trier to become a buyer, habitually purchasing your product or service and, ideally, becoming a regular customer. It’s also about on-boarding and growth to drive the desired behaviors of your ideal or best customers.

RETAIN

The retain stage solidifies and strengthens the relationship between a customer and your brand. Where the develop stage focuses primarily on ROI, the retention stage shifts the focus toward ROR (return on relationship). Targeted, relevant communications and milestone recognition deepen the relationship beyond strictly transactional, yielding brand preference over the competition. Traditionally, a customer is considered loyal after they transition through this stage.

AMPLIFY

In the amplify stage, the customer feels affinity with your brand and engages in a social dialogue about their experiences. Your company’s goal in this phase is to elevate a loyal customer to a brand advocate that might share, contribute, evangelize, defend and refer on behalf of your brand. This multiplies the company’s resources and drives us back to the
beginning of the customer lifecycle – acquire.

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Mark Pearson BI WORLDWIDE

Mark Pearson

Vice President
Loyalty Marketing

Mark is responsible for multi-channel marketing strategy and solution design. He applies expertise in customer lifecycle, loyalty and interactive marketing to develop programs that leverage behavioral economics and gamification to drive engagement and targeted behaviors. Most programs are deployed online via responsive design, often incorporating social media extension and sales channel integration. Mark has more than 25 years of experience, a BA in English from Gustavus and an MBA in Marketing from St. Thomas.