12 Key Loyalty Marketing Trends for 2010

The concepts of customer retention and maximizing customer lifetime value have long been honored in lip service rather than by action by too many companies whose focus has been on finding and selling to new customers instead. The downturn, and with it the drying up of new and wealthier prospects and at the same time internal cost cutting have changed all that. It is five to 10 times less expensive to retain customers, and keeping them loyal, than to drill for new ones.

 

In view of this shift, which for the smart companies will be permanent, the Loyalty Marketer’s Association, or “Loyalty 360,” has come out with a timely list of 12 key trends that it says will dominate the loyalty marketing industry for 2010. Take a look at them and see about orienting marketing, sales, customer service, retention and customer contact strategies including contact center operations metrics, performance and agent training accordingly.

 

1. Engagement is the goal 

 

From merchants and banks, to hotels and restaurants, to health care providers and insurance agencies – all but airlines – marketers are embracing engagement. These organizations know that engagement is the process that creates loyal customers, clients and employees. However, most don’t know how to define “engagement,” how to incorporate it into their marketing strategies, and most importantly how to measure, monitor, increase and sustain it. 

 

2. There is a keen focus on sustainability

Customers want to be aligned with socially responsible companies and reward brands that champion the issues they believe in with their purchases and, ultimately, their loyalty. Given customers’ confusion over “greenwashing” – and often higher prices for green products – brands that claim to be environmentally responsible need to be authentic and transparent in their marketing efforts in order to achieve true customer commitment. 

 

3. Loyalty programs will become more collaborative

 

Merchants want to work with banks, retailers and other partners. Each wants to work with the other’s members to create unique communities that can provide the value, behavioral information, and insight they cannot get in the market.

 

4. The need for metrics and quantifiable ROI is profound

Users were sold programs that were supposed to drive behavior, yet they have not performed. The market wants to know what types of return they should be achieving with these programs, and they need the benchmarks to help them do so. 

 

5. There is a vast dichotomy between old school and new school incentive programs

 

The market is moving away from the old school mentality of trying to put a watch into an incentive program with the hopes that it will drive ROI and behavior.  Instead, the market is looking to adopt the new school mindset which is focused on data, insight, and sustainable behavioral change. 

 

6. Customers are dissatisfied with old school “what has my customer done for me lately” loyalty programs

 

Loyal customers want to know what brands have done for them recently – and brands need to implement loyalty programs that respond to this opportunity. 

 

7. Focus is on “voice of the customer” to drive bottom line results

Those who engage in a true “voice of the customer” approach within their loyalty, engagement, and customer experience initiatives will continue to increase their market share, profitability and brand equity.

 

8. Brands, CPGs, and channel program providers have been dis-intermediated from their customers

 

Because the data in the channel is controlled by the merchants; brands, CPGs and channel program providers want to develop strategies that will give them more insight and access and to their customers and dialogue with them directly. 

 

9. Changes in the funding for credit card loyalty programs are shifting costs which impacts how the programs are implemented and run

 

Banks are increasingly dissatisfied with their traditional loyalty programs. They are looking for more engaging loyalty/incentive/engagement marketing programs with different costs models that are unique and provide measureable behavioral change. The interest in open forums and communities to address these opportunities continue to grow.

 

10. Large retailers are trying to leverage their brands

 

Large retailers want to expand the control, impact and overall direction of their customer experience, loyalty, and engagement marketing initiatives.  They want to lead with their brand and increase the efficacy of these brands when developing engagement and loyalty initiatives.

 

11. There is a large and growing interest in social, mobile, and emerging media

Yet the responses we are seeing suggest that there is still confusion over how to implement these programs.  The “vanguard” and the “visionary” leaders in this market at times seem to be more interested in “chest thumping” rather than listening to market opportunities and solving problems.

 

12. The interest in webinars, case studies, and best practices is more and more important to the market

 

The market has grown tired of hyperbole and is now focused on the companies, processes, and procedures that can drive the behavior, ROI and engagement needed within their organization. The market wants to leverage those organizations who have completed these processes, like case studies, understand practical market based solutions, such as best practices and have presented them in an ongoing learning process, including Webinars.

 

“Engagement, collaboration, sustainability, ROI…some may call these buzzwords, but I predict these are bottom-line concepts that will drive loyalty marketing in 2010,” Mark Johnson, CEO of Loyalty 360, said. “We’ve got our finger on the pulse of the issues our members are struggling with and the strategies and solutions our experts are focusing on. And all signs point to a very consumer-driven, new school approach to loyalty.”