Tag: loyalty

Loyalty Program Design Fundamentals Part I

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If you are a loyalty program manager, most likely you will agree that a loyalty program can be an expensive exercise. Not only does it require a substantial infrastructure and a large amount of human time to support, but also once started it is difficult to pull the plug without offending customers. Therefore, it is critical to design a loyalty program so that it will encourage customer participation and achieve maximum business benefits. In this two-part series, I would like to discuss some key points in this area. In this first part, I will discuss what are the design factors that a loyalty manager should consider. Next week, I will talk about what academic research has taught us about some of the design factors.

Before continuing, I would like to acknowledge the inspiration for this topic from one of my readers in Europe, Kim Jorgensen, who had inquired me about optimal loyalty program design. The inquiry stimulated me to think more extensively about this topic and hence this series. Thank you, Kim!

Now let’s get down to business.

design blueprint
http://www.flickr.com/photos/seier/ | CC BY 2.0

Continue reading “Loyalty Program Design Fundamentals Part I”

Best Practices — Effective Use of Twitter

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What is it?

In this entry, I am going to discuss two organizations: McKinsey Quarterly and Brooklyn Museum.  These two organizations are very different in many ways.  But they share one commonality in that they both use Twitter very effectively in gathering customer intelligence and strengthening customer relationships.  McKinsey Quarterly’s Twitter username is @McKQuarterly; and Brooklyn Museum is simply @brooklynmuseum.

Why is it a good idea?

Many companies use Twitter or other microblogging tools to bring customers more timely updates about the business.  This is what I call a “broadcast” model.  While it is useful in its own right, McKinsey Quarterly and Brooklyn Museum went beyond that by practicing the following:

(1) Attach links to tweets so that users can choose to drill deeper into a topic if they are interested.  Not only does this offer a higher level of interactivity to satisfy user needs, but with proper tracking it also provides useful insight on what interests customers.

(2) Use @replies functionality to build a dialogue with customers.  For those who are not quite familiar with Twitter, one can add @username into one’s tweet to reply to a user or to refer to a specific user.  Both Brooklyn Museum and McKinsey Quarterly closely monitor user comments and use @replies to respond to those comments in a timely fashion.  This approach makes users feel appreciated, which encourages future participation and builds loyalty.

(3) The third tactic that I would like to discuss is used by McKinsey Quarterly.  They have turned their twitter account and their large number of followers (7645 as of right now and it’s not hard to imagine the high relevance of these followers)  into a marketing research machine.  Earlier this year, for example, McKinsey Quarterly published an article on Six Ways to Make Web 2.0 Work.  Then using Twitter, they asked their followers what organizations get the most out of Web 2.0.  Combined with a special hashtag (#web2.0work), they were able to track responses from users.  The company then updated the original article based on the ideas they received from the Twitter community (of course they posted a tweet about that update too).  Does it get much better than free marketing research?