The best magazine
Loyalty Marketing - New Trends
Because of recession people are more price sensitive.
They expect better deals from their brand, at the same time if they tend to find best deals in competitors they adopt for that.
Now it's time for marketers to question about their loyalty strategies.
Now whenever they go, whatever they purchase, they can see loyalty points.
Increased competition in the loyalty marketing is also threatening the firms.
Loyalty marketers now understand how to use the data driven insights to change the customer behavior profitable.
Since the loyalty market is messed up with high competition now it is important for firms to combine the loyalty and their emotional bond.
Combining the CSR, Green activities with the loyalty marketing is going to be the sustainable strategy in the future.
The best example for this strategy is America Express.
They had a partnership with Statue of Liberty restoration project.
The strategy was each time when Amex cardholders used the card, Amex donated a penny to the project.
Similar to that the issue gave one dollar for new credit card application.
They got an amazing result, $ 1.
7 million in 3 months and their credit card usage increased by another 27% and new card application rate by 45%.
So it is clear that socially responsible initiatives are going to be a better brand tool in future, but it is difficult for companies to drive sales with just cause related marketing.
In my company we do have a loyalty program, but sometimes high redemption leads us for loss also.
Many brands truly desire to do business in most ethical way and the customers also expect the same.
So that's where the loyalty marketing comes to play a major role.
Now loyalty marketers have the full data about their customers.
Now they are turning these insights to more ethical purchasing behavior.
Now the organization and consumer have reached the level maximum about the corporate social responsible concept.
According to the Edelmean good purpose study, 63% of the customers think that marketers spend too much on advertising and other marketing communication, and they said that they should set more for "good cause".
Still global customers think that the companies set money for social purpose as well.
Particularly increasing awareness of climate change is closely positioned in the customer's mindset.
Not in Sri Lanka but in other countries buying green products remains a priority and customers are willing to pay additional 5% for green products.
Though environmental issues are getting concern among the customers, other social issues are also worrying them.
That's why cause marketing getting prominent in organizational strategies.
So what the companies should do now? Running a separate loyalty program and a cause marketing might danger them.
But combining the emotional bond of the customers with loyalty program and cause program is going to be the suitable strategy.
Cause marketing is largely about pushing the brand and additional bond and empathy it.
Having just a loyalty program may not work hereafter or might struggle in the middle.
So how they can do this? Based on the loyalty theorem following are possible according to my knowledge 1 - Walk in walk The very essential part of cause marketing program, are planning, design and following it up.
But the validity is important always.
The company should ask the questions like does this cause marketing program ring true as part of the company's value? Will consumers see it as sake or fake? The company should be careful when they do this.
It can backfire the firm if it is not done properly.
An important question that arises here is "How to build the validity of the campaign".
Not only the top level management but the organization must build cause related value within it.
Consumer expect that brands those incorporate cause related marketing with loyalty effort will walk the walk.
Then the organization should make sure the cause is closely related to the brand values and resonated with the stakeholders (both customers and stakeholders) If there is no actual relationship with the cause and the brand value then it will become a doubtful in the consumer's mindset.
Eg- Breast cancer cause are related to female products, but if masculine products decides to support the cause one party might say, wow they support woman, but on the other hand men might say "what is this", there can be a conflict with the targeted customers.
Focus on Behavior Change When an organization thinks about supporting a cause they should also consider the behavior of customers.
Instead of buying the products customers may think of supporting the cause directly.
Here it is important to connect the loyalty bond and the cause.
So the customers will feel good that they are supporting for a cause while purchasing.
Another way to change the behavior is to focus more on millennial consumers such as teens with less income and some one who have limited resources to take part directly to the favorite cause.
According to the research insights I went through, 88% of Millennial would switch brands to help cause.
Don't forget the ROI Organizations need to market it properly with a goal of boosting a loyal behavior from the customers or getting return on investment.
Cause marketing without measurable ROI is simply like desert strategy.