While doing some research for a session I am presenting for the Craft Beverage Expo in San Jose I came across some very interesting research on loyalty programs conducted by Forrester Research, a global research and advisory firm.
According to their research the top three business objectives for customer loyalty programs are:
- Customer Retention (70%)
- Customer Engagement (64%)
- Revenue (34%)
For 60% of the firms surveyed, loyalty is considered a top three strategic priority. The study revealed that, on average 45% of customers enroll in loyalty programs and 35% redeem rewards. It also reported that some of the most popular channels for reaching consumers are email 92% (no surprise there), website 82% and social media 54%.
The study of loyalty program marketers in different industries was an effort to understand the size, structure and performance of loyalty programs. In a later webinar presented by Forrester, analyst Emily Collins told attendees “the age of the customer is here to stay.” She went on to say, “Consumers are increasing interacting with brands. Marketers turn to loyalty to deepen customer relationships because they can better identify and more easily reward customer behavior… “
Additionally, Collins said, “Loyalty isn’t just for marketing. It touches every part of the organization. Programs that ignore customer lifetime value and aren’t tailoring their offers are wasting time with rewards because they fail to drive behavioral changes in wallet spend and redemption frequency.”
Loyalty programs help you in lots of ways. These customers are willing to give you information about themselves and become more connected with your business.
For me, the most important things are to understand the lifetime value of customers and to tailor your offers to specific groups. Customer service and customer loyalty programs are not a one size fits all proposition. Customers need to be segments by lifetime value, sales, event attendance, number of annual visits, etc.
Your customers want to be a part of your business, so give them that opportunity and make it worth their while.
A tip of the glass from me to you!