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Loyalty trends and best practices

Using Data to Unlock Customer Loyalty

by Sara Hogan
October 18, 2017
Using Data to Unlock Customer Loyalty

Everyone knows that data is king. As marketers, we’re inundated with it — data from our sales channels, from our digital platforms, our call centers, our CRM systems, and our loyalty programs. This data has never been more valuable. But are we using it correctly? Is this flood of data creating the insight needed to create valuable, personalized experiences for customers and ultimately meet business objectives? A Data Disconnect: When it comes to loyalty programs, the answer is too often “no.” According to a recent Forrester evaluation of customer loyalty solution providers, marketers recognize the benefit of collecting data from their CRM or loyalty programs, but lack the capacity to interpret and act upon it. The report also identified the top challenge for marketers as personalizing offers, content, and experiences based on behavior — in other words, based on data. This represents a gap between data collected and data used to... Read more

Financial Modeling Guidelines for Loyalty Programs

by Julia Leyrer
August 08, 2017
Financial Modeling Guidelines for Loyalty Programs

Loyalty programs are not risk-free endeavors. An organization’s CMO and CFO demand to know the ROI of all initiatives, especially for a large undertaking like a loyalty program. Brands are slowly changing their perspective of programs to revenue generators, as opposed to continued cost centers. This, in turn, necessitates the need for a complete financial analysis to understand the income statement, balance sheet, and cash flow implications of your loyalty initiative. The financial modeling process for a loyalty program is a complex one, involving large data sets and customer assumptions based on understanding behaviors of a subset of members. Several inputs influence the program’s impact across enrollment, revenue, cost, and profitability. A credible financial model allows you to have the confidence that... Read more

How to Increase Member Engagement by Striking the Right Balance with Loyalty Design

by Socheata Sam
March 22, 2017
How to Increase Member Engagement by Striking the Right Balance with Loyalty Design

With the proliferation of loyalty programs in the marketplace, wallets are becoming increasingly saturated with membership cards, mobile phones with retail program apps, and key chains with key fobs. In fact, the average American household is enrolled in 29 loyalty programs--the problem, however, is that they only actively engage with 12 programs on average. So, why are so many programs failing to engage members post-enrollment? For starters, loyalty program design can be challenging. One of the more foundational challenges--and perhaps one of the more obvious challenges--is balancing the interests of the customer with the priorities of the business. Striking the right balance here requires a deep understanding of what matters to your customers (deeper than what might be obvious), alongside clear and concise alignment across the entire business around loyalty objectives. The one... Read more

Loyalty Programs and Leisure Travelers: How Can Loyalty Close the Engagement Gap in Leisure Travelers?

by Socheata Sam
December 15, 2016
Loyalty Programs and Leisure Travelers: How Can Loyalty Close the Engagement Gap in Leisure Travelers?

Spend-based travel programs are inherently, and effectively, focused on high-value business travel customers who tend to be less price-sensitive than their leisure counterpart. However, a significant portion of guests/passengers in the travel and hospitality industry fall outside of the business segment—with 3 out of 4 domestic trips taken for leisure purposes. Because of the sheer size of this untapped segment, your loyalty program could contribute more to the bottom-line by effectively engaging these overlooked customers. LOYALTY’S FOCUS TODAY: THE BUSINESS TRAVELER. The U.S. travel industry was worth a whopping $947 billion in 2015 (according to the U.S. Travel Organization), with high-frequency and high-spend business travelers... Read more

Should You Shift to a Spend-Based Program? Lessons Learned from American Airlines and Others

by Arif Damji
August 05, 2016
Should You Shift to a Spend-Based Program? Lessons Learned from American Airlines and Others

As of August 1st, American Airlines changed the method by which its (roughly) 100 million members earn miles on their airlines. Instead of the number of miles flown, as was the case for the past decades, it has now shifted to a spend-based model that is built on multipliers applied to the base fare purchased. As United and Delta made this move in 2015, we now have over 250 million members in the airline space earning miles based on spend. High spenders have been rewarded and we see a more transactional style of program becoming prevalent. In fact, the real lesson for other programs is not to simulate the same structure, but to understand the motivation and best practices apparent in these changes. Today, we’ll explore why the airlines made these changes, and... Read more

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