Nearly everybody is in one or more loyalty programmes these days, basically to get those discounts, rewards or airpoints.

These reward programmes have to be done right. In an excellent article by Geoffrey De Weaver "… consumers do not mind sharing information with retailers as long as they receive worthwhile, personalised benefits…  54% of Australian consumers have at least one reward or loyalty card, and 69% tried to use a loyalty card as often as possible. Importantly, both figures are trending north…  Never lose sight of the top 20% of your customers who generate the majority of your sales and profits…"

But for the retailer, the hidden beauty of loyalty programs is their ability to better track things at purchase time. Without this or similar mechanism in place, few companies can track individual purchases back to customers.

A major income boost for targeted marketing campaigns

It’s not just about getting people back to the store and buying. It’s about getting these best customers to buy more products, more often. This data is used to alert the right customers, at the right time, about the right offer. This makes it more relevant and therefore obtain a far higher response, often 10x higher.

Imagine having an attractive offer arrive in your letterbox (normal or email), based precisely upon your current buying preferences, desires or on your birthday? Loyalty programs collect just this type of data, yet to date, are too seldom used by retailers or brands here in NZ. Yet it’s been common practice in Europe, UK and the US for several years…

Imagine too if this detailed consumer buying data was available in a smart company CRM system like Salesforce? And what if it’s then used to drive a personalised [semi-automated] cross-channel marketing programme? i.e. Many more sales, for much less effort and overhead cost.

Predicting buyer needs through data mining isn’t new (click here). But loyalty programme data, linked into one-to-one marketing system takes things to the next level. We can now talk directly to the individual, not just the broader demographic, ensuring much higher response rates and ROI.

It’s already started Downunder

Myer, a major retail chain in Australia has decided to slash it’s traditional mass advertising budget, instead sending targeted direct mailers to their 2.7 million Myer One card holders – It’s a smart move which should pay huge dividends.

myer

Once the Myer One database was analysed, it was likely a simple financially-driven decision – One that should save them millions in old fashioned TV and Newsprint advertising, as well as boost their sales volumes and margins.


As Rafi Albo proved many times, a good loyalty program is the hidden key to effective, highly relevant one-to-one communication – When done well it hits that emotional mark, driving sales results way beyond expectations.

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