How To Measure Your Loyalty Program’s Incremental ROI – vía @cmo_com

Prior to launching a loyalty program, smart marketers build ROI models…

Vía CMO.com
…that forecast incremental profits based on anticipated lifts across three key customer revenue variables: average order size, yearly purchase frequency, and yearly retention rates. These models make assumptions on funding, breakage, and participation rates to estimate results.

ARTICLE HIGHLIGHTS:

How can you tell what loyalty members would have spent if no program existed?
New customers are a particularly good segment to break out for high-level comparison.
The purest way to measure incremental lift is to randomly assign every existing and new customer to a control group.
Full article 🙂

For example, “Compare Members versus Nonmembers” section, we performed the following analysis:

• Identified every shopper, loyalty program member and nonmember that made at least one purchase over first three months of loyalty program. For the member group, the purchase had to be made within 24 hours of registering for the loyalty program.

Paying It Backward: How To Get Your Customers to Reciprocate

Loyalty Programs

A good way to get your customers to pay it backward is by installing a “loyalty program,” fit to whatever conditions you deem acceptable for your industry/business. According to an article by Inc, American Airlines was one of the first purveyors of this practice; it wanted more loyalty and participation for its customers, so it developed “frequent flyer miles” in the 1980s–and other airlines quickly followed suit. Regarding loyalty programs, Inc says that you should ask the following questions: “Is it customer tenure that’s most valuable? What about dollar-value of purchases? Would you rather be a company that delights clients with surprise bonuses or upgrades? Two other big issues should shape your decision: What your competitors are doing, and how much your company can afford to spend on the program.” Consider carefully these questions before you implement your program.

paying-it-backward-how-to-get-your-customers-to-reciprocate

In the film Pay It Forward, the main character (played by actor Haley Joel Osment) is invited by his social studies teacher to “think of something to change the world.” He cleverly plays on the common notion of “giving back,” deciding instead to “pay it forward”– doing a favor for three new people as a means of repaying good deeds.

You can encourage customers to adopt this same good spirit with a similar practice: Paying It Backward. You need to make your customers enthusiastic about reciprocating services, advertising your company, and in general helping your business to expand. How can you achieve this?

Loyalty Programs

Do Loyalty Programs Really Work?

We have a saying in our family: “Going broke saving money.” The philosophy of a traditional reward program is simple: reward customers for their purchases thus encouraging future purchases (and hopefully an increase in spending). As a marketer I’m a fan of loyalty programs and as a consumer I love receiving my free drink from Starbucks every couple of weeks (I need to purchase 15 drinks to get a free drink. You do the math.) But as my interactions with brands move away from offline engagement and move toward Facebook, Twitter, Foursquare, etc., I’m starting to evaluate the effectiveness of the traditional loyalty program. Do loyalty programs really work? Apparently Mason Thelen from BrandWeek is asking this same question.

Via: http://www.dontdrinkthekoolaidblog.com/

We have a saying in our family: “Going broke saving money.” The philosophy of a traditional reward program is simple: reward customers for their purchases thus encouraging future purchases (and hopefully an increase in spending). As a marketer I’m a fan of loyalty programs and as a consumer I love receiving my free drink from Starbucks every couple of weeks (I need to purchase 15 drinks to get a free drink. You do the math.) But as my interactions with brands move away from offline engagement and move toward Facebook, Twitter, Foursquare, etc., I’m starting to evaluate the effectiveness of the traditional loyalty program. Do loyalty programs really work? Apparently Mason Thelen from BrandWeek is asking this same question. Continuar leyendo «Do Loyalty Programs Really Work?»

Beyond Foursquare: The Next Generation of Customer Loyalty – Michael Schneider and Anne Mai Bertelsen – The Conversation – Harvard Business Review

Today, loyalty programs are often siloed and limited to the interactions between two axes: the customer and spending. In the best of these programs, a brand knows exactly what the customer is spending and how frequently. On the other hand, while brands have spending data across their own locations, they lack knowledge of what kind of business the customer is giving competitors.

If location-based services began collecting the size and frequency of purchases across all locations and mining the data of check-ins (including likes and dislikes), they could begin to build the next generation of loyalty rewards programs comprised of customer, spending, location, and sentiment. Such a program would benefit location-based service providers, brands, and customers alike.

Take this example: if every day a consumer purchases a latte from Starbucks and then walks across the street to Dunkin’ Donuts to pick up a turkey sausage flatbread, both companies could benefit from that information. If many customers display similar habits, Starbucks could add a similar breakfast sandwich to their menu or even discontinue their current breakfast fare at that location.

That level of data provides a more holistic view of consumer behavior, and could ultimately help brands become more relevant and timely. In the example above, in addition to knowing consumers’ breakfast sandwich habits, Starbucks could also learn whether individuals go to Starbucks all or most of the time for coffee. The company could then use that market insight to offer coffee-consumers individual promotions to try their food items, instead of promotions for coffee which the consumer already gladly purchases at full price.

vía:
Beyond Foursquare: The Next Generation of Customer Loyalty – Michael Schneider and Anne Mai Bertelsen – The Conversation – Harvard Business Review.

Repeat Business: There’s More of You to Love

Are you familiar with the following concept? It is much easier and more cost effective to sell to existing customers than it is to acquirer a new one. Which one would you rather have? Sell 50 items to 5 people or 50 items to 50 people. When you are designing and tweaking your marketing campaigns, be sure to include your current customer base and maximum their profit potential. Here are several ways to do just that, give your customers a reason to come back for more.

Special Discount Offers

I recently purchased something from an online retailer. When I received my package, I noticed there was a discount coupon inside that I could use on my next purchase. I’m a sucker for coupons and many consumers are. It is a great way to encourage and entice your customers to order again. For best results, the coupon should have a higher discount value than what is normally offered to the general public on sites like Retailmenot.com. The discount should also be a one-time use coupon. This will prevent others from sharing it online and reduce the perceived value.

Post image for Repeat Business: There’s More of You to Love

By Curtis Stevens

Special Discount Offers

Put All Your Club Cards on a Digital Key Ring

Quick Pitch: Never carry plastic loyalty cards again. Download “Key Ring Reward Cards” for free on your iPhone or Android device.

Genius Idea: Key Ring, a mobile loyalty card application for iPhone and Andriod made by Mobestream Media, serves the same purpose as other apps such as CardStar — mitigating loyalty card buildup.

Consumers tend to carry around cards for retailers or venues they frequent on a regular basis, including gyms, boutiques, drug stores and grocery stores. The Key Ring Rewards Card application makes a digital copy of those cards so that you can leave the physical cards at home.

You can download the free app and use it to scan the barcodes on your loyalty and club cards. To get started, select “Add Card” and click yes or no to specify whether or not the card in question has a barcode. If it does, the app will then let you scan the barcode, identify the retailer and create a digital copy. If the card doesn’t have a barcode, you can manually input the membership ID in lieu of the barcode scan.

Name: Key Ring

Quick Pitch: Never carry plastic loyalty cards again. Download “Key Ring Reward Cards” for free on your iPhone or Android device.

Genius Idea: Key Ring, a mobile loyalty card application for iPhone and Andriod made by Mobestream Media, serves the same purpose as other apps such as CardStar — mitigating loyalty card buildup.

Use CardKing To Carry All Your Coupons And Loyalty Cards In Your iPhone

Coupons, loyalty cards, special offers, are all ways to earn discounts and benefits at various stores. Experienced (and wise) shoppers never miss an opportunity that enables them to get a discount. These offers (particularly loyalty cards) can be especially helpful when shoppers buy from the same store regularly; discounts on each purchase can combine to form a huge amount of savings.

Of course to carry discount cards and loyalty cards of each store we purchase from can be a little difficult – there is only a certain limit to things we can carry in our wallet. If you are an iPhone user, however, you can use an application to save your discount/loyalty cards and carry all of them in your iPhone. CardKing is exactly such an application.

Cardking

CardKing is a free iPhone application sized at 4.4MB. Its basic function is to let users store their coupons and such in their iPhone. Stores can then scan the barcode of these coupons off the customer’s iPhone and let them avail that particular offer. Continuar leyendo «Use CardKing To Carry All Your Coupons And Loyalty Cards In Your iPhone»