Though loyalty programs have been around for decades, loyalty is definitely worth a new, closer look. Below are six common CPG marketing challenges and a look at how loyalty can help:

  1.  Build Brand Preference Without Discounting
Economic ebbs and flows often mean boom or bust for CPGs. Since the Great Recession, many customers shifted to private label brands, and this behavior has persisted even in better times. As price promotions and retail trade deals are now table stakes, how can national brands build and sustain preference?

The Loyalty Solution: Loyalty can help CPGs deliver differentiated value by giving customers something more than just the product itself. For example, Kellogg’s Family Rewards® encourages members to “gift” their accumulated rewards to schools or charities. This kind of emotional reward drives loyalty that transcends price promotions and provides a point of differentiation competitors can’t easily replicate.
 
  1.  Drive Brand Engagement Beyond the Transaction
Engagement remains a persistent buzzword and key objective in almost every CPG brand’s annual plan and marketing strategy. “Always on” digital and social media channels are great tools to reach customers and deliver branded content, but can be difficult to harness and sustain. Once you get past the typical coupon and recipe offers that are hallmarks of CPG engagement-drivers, what can you do to differentiate your brand and increase customer desire to interact with you on a regular basis?

The Loyalty Solution: Loyalty programs have numerous levers that can initiate regular engagement with your brand. Rewarding customers for interactions with branded content, games, polls and social activities can cut through the “what’s in it for me” bar that needs to be met. Loyalty can’t help you produce better content, however, it can provide the added incentive that makes customers pay attention and want to take the extra effort to engage. CPGs have begun to focus more and more on driving brand engagement through effective loyalty program structures. Programs like My Coke Rewards offers customers points in the program for interacting with selected content and doing activities that increase status levels in the program. These earning mechanics have provided the added reason to spend time with the brand and enhance the customer/brand relationship.
 
  1. Gather and Use Customer Data For Segmentation and Personalization
Big data is a big topic, but gathering good data and using it to generate insights to create stronger customer connections remains a challenge. Often data is aggregated or based on panel behavior, which is useful but doesn’t change how one might target or personalize communications and offers in real time. How can CPGs gather and use data in a way that makes the brand experience more relevant to drive behavior?

The Loyalty Solution: Loyalty programs contain the added incentive for customers to provide data in exchange for the added value. In addition to demographic or preference data they might provide at registration, loyalty provides a stream of purchase and engagement data as they participate. Proof of purchase methods such as code on pack and receipt submission can gather details on exact frequency, brand and detailed SKU data of purchases and even details on customers’ other purchase preferences. This data lets CPG marketers to know their customers better and provide specific offers relevant to them, including upsell or cross-sell promotions. The Pampers Rewards program provides content and special offers based on both customer (and baby’s) life stage, and also purchase activity. This makes for a more relevant and effective experience while enabling Pampers to deliver on their business objectives.
 
  1. Objectively Measure, Optimize and Report ROI On Marketing Initiatives
Data can also help to measure success and identify opportunities for optimization. As more CPGs invest less in traditional media to add more digital initiatives, measurement can become an even greater challenge. Older tools such as Nielsen and Marketing Mix metrics can help to provide success metrics and ROI, but typically only on an infrequent basis. Engagement and interaction metrics can provide a clear picture of purchase activity and investment return on “new media”. How can CPGs leverage newer digital channels while maintaining the ability to nimbly measure investment and optimize for better performance?

The Loyalty Solution: The data provided and captured as part of a loyalty program can help not only in execution, but also in measurement. Loyalty can help provide a regular pulse on purchase activity and other behaviors surrounding brand engagement. Detailed purchase data is available on a daily basis and provides great insight not only into overall ROI, but also on opportunities to optimize marketing initiatives as data on behaviors and purchase patterns are generated constantly in real-time.
 
  1.  Drive Advocacy and Leverage Influencers
Your best customers can help you find other best customers by acting as advocates to their network on behalf of your brand. The rise of social networks has opened new, higher-reach channels for fans to influence their friends. But without a specific value proposition that is share-worthy, it can be a challenge to harness organic, earned reach – especially when most CPG purchase decisions are relatively low-touch, minimal consideration decisions that don’t necessarily drive one to speak about their experience.

The Loyalty Solution: Customers need specific, exceptional experiences to feel compelled to share with networks and encourage others to try the brand and/or program. Not only do loyalty programs attract best customers, they provide constant value-added moments that encourage word-of-mouth or social sharing. Further, additional earning opportunities can be made available through loyalty referral programs that reward customers for sharing your brand. The Pepsi Pass program has used loyalty components to drive interaction and social activity on behalf of the brand. This and many other loyalty programs provide customers with points and unique rewards to enhance brand relationships and makes brand moments more shareable.
 
  1. Be Customer-Centric
First and foremost, CPG brands need to deliver on their brand promise. But it is important to actively demonstrate that a brand is willing to go further. CPGs need to make customers feel like they are getting something “extra”, something unique. How do can a CPG do so without breaking the budget?

The Loyalty Solution: A good loyalty program perfectly balances the need to give customers added value without harming the bottom line. Effective loyalty programs are constructed around customers’ current activities and interests to enhance their relationship with the brand and maximize the perceived value of the brand to the customer. Offering additional value through loyalty-specific brand partnerships can ensure a satisfying and differentiated brand experience for customers with minimal cost implications.

Developing effective loyalty is not easy, but done right it dramatically improve results for those CPGs willing to invest in a better future. At Aimia, we are constantly improving our CPG-focused solution, employing the latest strategies and techniques for multiple programs in global markets for several of the world’s most admired CPG brands.

Contact [email protected] to discuss how loyalty can help you overcome key challenges, achieve marketing goals and serve your CPG customers even better.

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