Creating emotional ties to members is a great way to re-engage customers in a brand loyalty program according to David Andreadakis, VP of loyalty strategy for Kobie Marketing.
During Tuesday’s Loyalty 360 webinar, “Quick Tips: How to Overcome Poor Loyalty Program Performance and Re-engage Your Members,” Andreadakis listed three tactics that brands can use to re-engage their loyalty program members: Be relevant, be attainable, and be believable.
Andreadakis said there is considerable discussion about segmentation, but the bigger question is: Are we segmenting properly, and in a way where brands can identify behaviors regarding decision points that can be affected?
“Know your customer and know customer response rates,” he said.
Regarding loyalty program change or redesign, Andreadakis said it’s important to truly “dissect and uncover whether your program needs a change.”
Reasons for redesign:
1: The program has run its course: “If a loyalty program hasn’t changed over time, you’ve trained your members to behave in a certain way,” he said.
2. The customer base can change: Harley Davidson customers were vastly different in the 1970s compared to now.
3. If cost structure is no longer controlled by the brand (i.e. airlines -- cost of fuel, etc.)
Monitoring and measuring a loyalty program is crucial, Andreadakis said. He listed three factors that are detrimental to a program’s growth:
Irrelevant rewards or promotions – Andreadakis receives a Kohl’s coupon for 10%-20% off every month.
Unachievable tiers or program goals
Unbelievable rewards
Andreadakis also said not to be fooled by growth numbers.
In the past two years, the retail industry has enjoyed healthy loyalty program membership growth of 26.7%, reaching 2.65 billion members. But, closer inspection reveals decreasing member engagement, he said. Many retail loyalty programs are undifferentiated, lacking value, and require updates.
Before refreshing a loyalty program, Andreadakis said to consider:
Refreshing the program for strategic reasons
A brand can be changing (McDonald’s)
Do it for reasons other than ROI (great example is Coke seeking to increase brand relevancy)
“Make sure you have some objectives in place,” he said. “Monitor and measure the loyalty program. If you can’t do this, you can’t be informed about any potential changes required. You need to take a look at what matters in the areas you’re targeting to make sure you’re on schedule for program growth.”