Segment Your Brand Community Participants Part 3

I created this series to help brand community managers to identify and focus their efforts based on the types of participants in their communities. In this last part of the series, I would like to offer some suggestions on what to do with each of the four segments (insiders, minglers, devotees, and tourists) once you have identified them.

 

 

Most likely, you will find all four types of participants in your community. However, depending on the developmental stage and the health of your community, the percentage of participants that fall into each segment may vary. The table below lists the suggested goals and engagement strategies for each of the segments. If your resource is limited, I suggest you go with the insiders first, as these participants are great partners and can turn your army of one into thousands at a low cost.

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Guest Post: 10 Steps for Setting up a Loyalty Program

A few weeks ago, I wrote about the design fundamentals of a loyalty program, which had been inspired by discussion with one of my readers Kim Skaaning Jørgensen. After I published the post, Kim offered me a rather lengthy and thoughtful feedback on the topic. So I invited him to write a a little more about it. Today, I am happy to introduce to you Kim’s guest post discussing his 10-step strategy to setting up a loyalty program.

10 Steps for Setting up a Loyalty Program

By Kim Skaaning Jørgensen

Step 1: Evaluate the Product

The first step is always to answer the following questions honestly:
• Is my product good enough?
• Is my product worth the investment?

If the product does not sell because of a significant quality, distribution, design or price problem, then the customer loyalty program will not be able to salvage it. In that case, you can apply the framework from W. Chan Kim and Rennee Mauborgne’s book Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant to first improve your products and your company.

 
Step 2: Identify the Value Proposition

This part is one of the absolutely most important steps before implementing a Customer Loyalty Program. What to offer customers? What is the value proposition? If the value is not well received by customers, the program will not work at all. Therefore use extra time to develop your value proposition. Here are some general guidelines:
1. The value, reward, benefits have to be of “high value” in order to make the membership attractive. The benefits must meet the expectations of the target groups.
2. It is not enough to think that a benefit offered are of high value. The benefit must also have a high “perceived value”. If customers perceive it differently because it is not the benefit they desire, the program will not work.
3. Selection of benefits. Benefits can be “Hard” or “Soft” (See figure below).
4. Timing of benefits or rewards (i.e., instant or delayed reward) needs to be considered.

The right mixture of loyalty program benefits

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Are Your Customers Really Loyal?

 

If Jane comes to your store every Saturday and spends $50, would you consider Jane a loyal customer? Driven by concerns about the bottom line, businesses often define loyalty based on how much consumers spend and how often they buy. But digging a little deeper into the psychological reasons behind “loyalty” can reveal important insight and help identify effective target marketing strategies.

In Jane’s situation, there are two possible reasons behind her “loyal” patronage: (1) she genuinely likes your products and services, and therefore, when need arises, she always comes to your store to make a purchase; (2) she comes to your store out of habit, whenever she’s on her way to visit her grandma on Saturdays. In other words, both habit and true loyalty can drive Jane’s seemingly loyal behavior, and your optimal marketing strategy should be different based on the exact reason involved. Let’s dissect this a little further, shall we?

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