Marc Goodman, Manager Petro Points, Refining & Marketing, spearheaded a relaunch of an 18-year-old loyalty program in mid-March to engage customers with faster and easier rewards. Armed with extensive knowledge of the logistics and necessary steps involved in designing a successful loyalty program, Goodman participated in a Q&A with Loyalty 360 that will undoubtedly benefit any marketer.
Can you talk a bit about the necessary steps involved for brands when they embark on designing a loyalty program? What's involved?
Goodman:
· Senior management buy-in and support where loyalty is at the heart of your strategy. It is important to understand that it is an investment.
· Clearly defined strategy and goals of your program. Is a loyalty program going to solve the problem at hand? (For example, a loyalty card is not going to help create more loyal guests if you have a customer service issue).
· Validate your assumptions/ideas with research/ guest insights.
· Weigh the pros and cons of a proprietary program vs. coalition model.
· Personal data is sacred - treat it that way.
· Hire the right people: mathematicians to get all the insights out of data, experienced loyalty people or companies to help you get the most out your program.
· Measure, measure, measure.
· Keep it simple - for guest to understand and for operations to execute.
From a design strategy standpoint, what are the keys for a loyalty program to not only attract customers, but to retain them and produce repeat purchases?
Goodman:
· Understanding customer lifecycle (attract, retain, and grow).
· Clearly defined tactics to for each step of customer lifecycle.
· Seek out best practices - learn from others.
· One size doesn't fit all - Personally recognize and reward your members.
· Leverage data - understand who you are talking to, how they want to hear from you, how often and what they want to hear about.
· Leverage technology - NFC, mobile, web, geofencing, apps (including payment).
· Keep it fresh and exciting: Our category is ubiquitous and we recently relaunched our program to re-engage existing members, put more points in their pocket, and simplify the program.
What is your philosophy on customer loyalty and how has that evolved in the past five years?
Goodman:
· A piece of plastic will not create loyalty, it is merely part of the entire value proposition (poor service and uncompetitive pricing cannot be offset by a loyalty program).
· Customer loyalty needs have evolved from one size fits all to a more personalized approach -- 1:1 relationships based on previous behaviors exhibited. Embrace technology that's made this easier and measurable (no more direct mail and instead email, text).
· Emotional relationship where customer selects your brand over that of your competitors, where you may not be the most convenient location, but they're willing to go the extra distance for them (deliver value they deserve); create brand advocates.
· 4Es of marketing - engage, exclusivity, experience, empowerment.
· Customer-centric versus company-focused goals.
· Customers are savvier and expectations from loyalty programs have changed where they are willing to exchange personal data for value-added rewards.
· Technology - digital wallet, easier to connect 1:1 with members, but only with relevant messages.
What is the biggest challenge brands seek to solve when launching a loyalty program? Does a loyalty program help influence/change behavior?
Goodman:
· Were these guests already your best guests and you are merely spending more money on them?
· How does the loyalty program separate a company from their competitors (Coke, Starbucks) vs. me too/sea of sameness.
If loyalty is based on behavior, how has that behavior changed in recent years?
Goodman:
· Customers are more intelligent and they have higher expectations of loyalty programs.
· Loyalty has evolved from buy “X” and get “Y” points to more relevant offers based on previous purchase behaviors.
· More of a relationship vs. transactional-based.
· Understand that they have traded their personal information for something of value and the value better be realized before they go elsewhere.
· More choice and more options for customer to choose from within the palm of their hands.
· Advent of social media creates easy environment for guests to talk about your brand and experiences -- very powerful both in a positive way (brand advocates) or detrimental (those that don't speak favorably about your brand).
· If done effectively, you can create tremendous value.