A recent article by CMO – “How brands are ramping up customer loyalty program spending in 2017”, highlighted how brands across different categories are reviewing, re-inventing, revitalising, refreshing, whatever “re….” helps them focus on the value and viability of their loyalty or rewards program.
David Jones are also imminently launching their rewards program, potentially called “Style Rewards”.
So, why are brands investing in new programs and revitalising existing programs?
Answer: A loyalty and rewards program is a valuable asset
1. Known asset:
• Identified and personalised data collection provides the opportunity to be intelligent, relevant and sensitive with known data – your customers’ data.
• Programs enable brands to understand who their customers really are and to drive personalised, relevant and ‘just-in-time’ communications that motivate members back into their business for more spend, more often over competing pressures and over the longer term. (see definitions of ‘loyalty’ in blog “Take an extra 30%,40% and 50% more off”)
(Part of ‘Known’ asset is the ‘Financial asset’ – the net revenue gain that a valuable program delivers)
2. Owned asset:
• A program is community of customers that belongs to the business – it’s an owned asset.
• By contrast a social media community on Facebook, Instagram, Twitter and all the others are rented assets, with permission to access by their ‘owners’.
3. Controlled asset:
• A loyalty and rewards program provides a more direct and controllable interaction with its members, given that it’s an equitable two-way value exchange
Known + Owned + Controlled = Valuable
An additional asset: Acquisition
A program that engenders loyalty and leverages goodwill and advocacy with its members is a source of new customers. Whether by referral, recommendation or reviews, a delighted member base will attract new members!
The cheapest form of acquiring new customers, is to love the customers you already have
And another asset: Relationship
Perhaps this can be part of ‘Known asset’, however it deserves a special mention as a program provides the opportunity to build ongoing and more meaningful relationship with members.
If an asset is important to your business, a loyalty and rewards program has the potential to deliver accordingly.
The opposite of an asset
There is always another side to an asset, being the investment to make it valuable and the potential liability if accrued rewards/points are part of the program.
So long there is an positive difference between asset and liability, then a loyalty and rewards program provides the potential to be a vital value generator for a business.
Rationalising a program vs the reality
The rational validation through asset realisation to invest in a program or revitalise an existing program has been covered.
The reality of making it happen so that it delivers the benefits of a ‘Valuable Asset’ requires a focus on objectives, leadership alignment and brilliant execution.
Two proven methodologies
Two proven frameworks to guide you through the building of a new program or reviewing and revitalizing the value and viability of an existing program are available for you to download.
Have a happy loyalty day!