Who are the heaviest users of loyalty programs? The affluent, according to Rick Ferguson, editorial director of COLLOQUY, a provider of loyalty marketing services based in Blue Ash, Ohio. This group is categorized by making $125,000 per year or more in household income.
But marketers can't serve up the same loyalty program features to this customer segment as they do to other program members and expect to keep their business. Ferguson provides some insight into what the affluent segment values in a loyalty program.
1. They crave value.
"The affluent really seek value and experience[s] that they can't get anywhere else," explains Ferguson, who gives the example of an affluent customer who enjoys golf and who's recently bought some unrelated material goods. A good offer to send him would be the classic "spend X with us during this time period, and we'll double your points and give you the opportunity to redeem those points for a three-day golf vacation in [X]."
Such an offer can work on many different levels. "That's an opportunity that they can't get anywhere else, and it will be a memorable one. Plus, they'll seek to repeat the behavior that created that experience," relates Ferguson.
Of course, not every offer has to end with a golf vacation. It can be something as simple as a discount to a local water park or restaurant. "That can be equally powerful. It's just got to create a memorable experience, and it's got to be the right experience," says Ferguson.
2. Demonstrate your loyalty, rather than trying to gain theirs.
"A loyalty program, no matter how well it's run, is not going to make a customer more loyal to a company," says Ferguson. "The purpose of the program is to demonstrate its loyalty to a good customer." Hence, that's why extra value in the form of economic (discounts, gift certificates, points, etc.) value is often given.
3. Improve the emotional connection.
Equally important is the emotional element. "I, the operator, value you as the customer, as a person, so I'm giving you some special pricing or a special event that gets the customer more emotionally connected to the company," describes Ferguson, who says the combination of economic and emotional benefits is a very powerful and effective one.
Ferguson explains that in the affluent sector, it's all about experiences. "The idea is to use data [on a mail piece, for example] that you're able to understand them well enough, their lifestyle and their behavior. Then you're able to create that emotional connection," he says.