Loyalty Pays: Hang On to Your Best Customers
Ferguson refers to loyalty marketing as a science because you can develop a hypothesis, "I can get the customer to spend X amount of dollars," test and retest it. Eventually, you can tie an offer you sent out in the context of a loyalty program to revenue, Ferguson argues, more seamlessly than you can in most mass marketing programs. To measure success, Walczyk looks at key performance indicators like acquisition, conversion and engagement, and also measures the strength of the relationship using a Carlson patented relationship strength index. The index accounts for trust (how much do they actually trust the company?), duration (how long are they in, and are they committed to staying in that relationship?) and alignment (how well we recognize people, and how are they aligned with the organization?).
In this economy, there is no question that loyalty programs offer the measurability and results that can add value to your existing customer relationships. "Use best customers to drive any growth that there may possibly be in the marketplace, and really focus on those customers and your core capability in the downturn. While people are actually looking for value, perhaps your company can provide that value," Walczyk concludes.