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CMO Challenge: Loyalty Program Design

Hardly a day goes by without seeing an article or research piece that explores the topic of marketing to Millennials. We’ve all heard the story… Millennials act as “tastemakers” for the general population. They haven’t known a world without the internet and mobile. The group is ethnically and socially diverse. Purchases related to life stages – like cars, homes and baby strollers – aren’t as predictable as with previous generations… With tremendous purchasing power, both now and for years to come, building loyalty among Millennials could be key to the long-term health of a brand. But while Millennials garner much attention for their potential impact on business, marketers have not abandoned their predecessors – namely Gen X and Baby Boomers – because of their critical impact today. 

The challenge for many brands is orchestrating a customer loyalty strategy that engages many different segments. How should marketers design loyalty programs that win the hearts and minds of consumers, when loyalty drivers for each target segment of the population can be different and unique? At its core, true brand loyalty is predicated on being able to listen to the disparate requests and expectations of customers and personalize a response on the right channel, timeframe and cadence the individual customer prefers. Brands are challenged to properly execute on this true 1-to-1 marketing, especially in regard to the simple loyalty programs of yesteryear, based on points and thresholds. As loyalty programs have evolved from transactional, RFM-based programs to seamlessly integrated experiential, multi-touchpoint programs that engage audiences, we see challenges in understanding how to effectively evolve processes and administer programs in a truly holistic way.

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