Card Power: The Core of a Successful Loyalty Program
The question facing most brands is: How do you increase the
spend and frequency from your consumers? The purpose of our research was to
uncover data and best practices around the use of cards within a loyalty program. We found interesting information on how to increase sales in a market
where the “the next big thing” always seems to be changing.
Keeping your brand present, and prevalent, in the minds and
buying behaviors of consumers is becoming more challenging. Consumers are
bombarded with marketing messages, in multiple channels, and ensuring your
message is heard and acted upon is every marketer’s desire.
Multi Packaging Solutions, Producer of loyalty and gift card
programs, is seeing this trend become the new norm. Tony Haugen, Senior Vice
President remarks, “We are hearing from many clients how important it is for
them to keep existing consumers shopping, and bring them back to purchase more
often. The value of having and executing a good loyalty program has become more
critical and in-demand than we have ever seen before.”
Loyalty Program
Market Update
It is well documented that the average consumer is in as
many as 14 loyalty programs, and 80 percent of consumers state loyalty programs
impact their purchasing decisions. There are many facets to obtaining loyal
consumers, yet there is no question that by retaining your existing consumer
base, you can achieve the biggest band for the buck.
Certainly there is a cost to running a loyalty program;
however, the upside is great. Members in
programs tend to spend 30 to 100 percent more than non-members, and are more
frequent in their purchasing. Furthermore, you should see a real profit uptick
as well; research shows that a five percent increase in customer retention can
result in a 25 to 100 percent increase in company profits.
In the marketplace, the conversation all seems to be about
mobile, digital and social. Without a doubt, technology is adding exciting
channels to engage consumers, and their impact will play a factor in the
market, so it is definitely smart to incorporate these in your strategy. Saying
that, here is the caution; these topics are new and cool, yet that doesn’t mean
you will spend the majority of your budget in mobile or digital loyalty
solutions. On the contrary, a blended strategy and one that is “back to the
basics” might bring you the best results.
Give Them a Card
Cards have been around for decades and may seem like old
news, but the market shows that cards are still trending, id they help power
programs to success! Carrying a physical membership card gives consumers a
sense of belonging, that they are part of something special. This has recent
strategies seem to only want to run to mobile wallets and email blasts. Maybe
it is time to reconsider the power of giving consumers a branded welcome to the
program.
This past year, one brand tested a card-based program (one
in which a card was given) compared to a card-less (digital only) program to a see
if having a card in hand versus none offered had any impact on the activity and
excitement from the consumer. They found that the consumer participation rate
was 8 times greater in the card-based program versus not offering a card at
all. Even though there was a savings by not producing a physical card; this was
far outweighed by the participation and ultimately financial churn of consumer
activity.
Mil Really Does Work
Yes, with all the excitement of social marketing, emails, SEO,
SEM, texting and so forth, direct mail is still one of the best ways to engage
consumers. In a recent channel preference study, the data supports this claim,
as 51 percent of U.S. consumers stated they pay more attention to postal mail
than email, 73 percent prefer direct mail for brand communications, and 73 percent
receive emails they simply do not open.
Research by Ball State University concluded that in some cases,
70 percent to 90 percent of respondents made a purchase based on receiving
direct mail. When a card is in the direct mail piece, response rates are even
higher. Multi Packaging Solutions has seen this with several clients, as response
rates have increased as much as 30 percent by combining direct mail with email
marketing campaigns.
With this type of information, direct mail is a marketing channel
that brands simply cannot ignore and should be a part of your strategy moving
forward.
Gift Cards as
Incentive Rewards
Gift cards have become the number one gift in the U.S., and
continue to provide a tremendous revenue lift for brands. As far as loyalty programs, great (and successful) convergence is underway. The big idea is to
use gift cards as incentives within your loyalty program.
How impactful can a physical gift card be? It has been found
that gift cards are ten times, yes ten times more effective at driving
incremental customer visits. A further look into why this
is the case reveals that consumers find a plastic gift cards to be “something of
value.” They place worth on a gift card and therefore on a reward card that
acts like a gift card.
Card Power: The Core
of a Successful Loyalty Program
A recent study shows that consumers who received a physical
card as an incentive spent 43 percent more than the card value, and 55 percent
of those consumers redeemed their card within 30 days. Another survey revealed
that over 84 percent of consumers would rather receive a physical gift card
than a virtual card. With this type of data, marketers need to continue to
focus their strategy on what the consumers want, and are doing today.
Subscribe to:
Post Comments (Atom)
Post a Comment