Category: Reality Check

Do You Need a Loyalty Program?

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The most recent Loyalty Census from Colloquy pegs loyalty program membership in the US at more than 2 billion, up 16% from 2008. Perceived value of points earned through loyalty programs is estimated to be $38.83 billion. With this much activity going on, you may be tempted to offer a loyalty program for your business too. But do you really need a loyalty program? I’d like to address this question in this post. Let’s start by taking a look at the pros and cons of having a loyalty program.

Key Advantages of Having a Loyalty Program

  • It encourages consumers to concentrate their purchases in your company so that they can reach a reward faster.
  • It increases switching cost so that consumers who have already earned points through your loyalty program are less likely to jump ship to a competitor.
  • Compared with other promotions such as price discounts, a loyalty program incurs delayed promotional cost, because consumers make purchases first and get rewards later only after they have accumulated enough points.
  • Related to the above cost issue, not all points earned through a loyalty program translate into reward costs, as there will always be some consumers who never reach the reward threshold or who never redeem their points.
  • A loyalty program offers a way to capture consumer transaction history and can lead to more in-depth understanding of your customers.
  • If you have a sizable business such as an airline, a loyalty program can be a revenue source as you can sell program currency (e.g., miles, points, etc.) to partner businesses.
  • A loyalty program, when properly designed, can make your best customers feel appreciated and become more loyal.

    • Continue reading “Do You Need a Loyalty Program?”

Google+ Circles for Managing Customers

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It was really nice spending the last few months with my newborn baby. As every parent I know tells me, “Kids grow up so fast! Cherish this time!” But in between the joy and wonders of being a mom, a part of me missed the excitement from the constantly changing online social media landscape. So when I came out of the hiatus, I was glad to find a major development on the horizon: the Google+ project. According to Google, the project is supposed to “make sharing on the web feel like sharing in real life”.

After receiving a Google+ invitation from a friend, I immediately started digging into it to see if it has more potential than Google Wave, the once hyped product that has since retired into the background. My first impression when getting onto Google+ was: this looks a lot like Facebook! But after looking into it a little further, I started to see several critical differences between Google+ and the Facebook concept. I don’t plan to get into all that in this post, as there are many great articles out there discussing the Google+ concept. Instead, I want to share with you how Google+ can potentially evolve into a great tool for managing customer relationships in the online social media space.

Google+ Circles

The Old Way

To do that, let us first look at how brands now engage consumers on Facebook. Most likely, this is done through a Facebook page, where consumers can “like” a brand to show their appreciation and support of the brand. Through such a page, a business can share information such as useful articles and upcoming promotions with consumers, and at the same time consumers can interact with the business and other consumers by asking questions and posting comments. This is all good, but it happens in a very undifferentiated fashion. Everyone on a brand’s Facebook page sees exactly the same information, and a business needs to sift through tons of questions and comments to identify the priority issues that need to be addressed. This is neither very effective nor efficient. Continue reading “Google+ Circles for Managing Customers”

Loyalty Mobile Apps

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With Verizon finally carrying iPhone and iPad and mass merchandisers such as Walmart selling smartphones on the cheap, the number of smart phones and mobile devices is bound to soar. This presents loyalty marketers a great additional touch point with their customers through mobile apps. What functionality should a marketer pack in a mobile app? To answer this question, in this blog, I’d like to take a look at different uses of mobile apps that have appeared in the marketplace.

Mobile Transaction Platform

Major retailers such as Amazon.com and eBay have developed their mobile apps that allow consumers to buy products directly from within the app. Compared with a mobile commerce website, these apps tend to be more user-friendly and incorporate the touch and swipe capabilities of smartphones for easier manipulation of product pictures, smoother transition between pages, and overall faster shopping experience.

Point-of-Sales Integration

Starbucks Card App

Short of offering full mobile transaction capabilities, another type of app tries to mesh the mobile device with POS transactions in the physical world. A great example is the Starbucks Card Mobile app. Having registered a card in the app, a Starbucks card holder can use the app to pay for purchases at 6800 Starbucks stores in the US and additional locations in the Target store. The store POS system scans a barcode displayed in the app instead of a physical Starbucks card. Of course, this type of app requires equipment compatibility at offline locations, which can require costly investment. Continue reading “Loyalty Mobile Apps”