State of Loyalty Marketing

Customer Insight Group, Inc.
• Systematic New Loyalty Program
• Loyalty Audit
• Loyalty Navigator
• Custom Loyalty Workshop
• Cause Marketing Exploration
• Social Media Roadmap
• Social Media Navigator
• Custom Social Media Workshop
• Data mining
• Market research
• Modeling
• Profiling
• Response analysis
• Segmentation
• Social media monitoring
• Usage and attitudes
• Audience targeted creative
• Blogs
• Content
• Direct mail
• E-mail design
• Landing pages
• Manage online conversations
• Mobile marketing
• Program management
• Social media
• Website design and content
Insight Strategy Execution
Customer Relationships – Engage. Keep. Grow.

Your Presenter Today
Strategist. Leader. Innovator.
 President of Customer Insight Group, a
leading strategic customer relationship-
marketing firm
 Digital Marketing Professor
 2009 Direct Marketer of the Year

What is loyalty marketing?
Loyalty:
Loyalty Marketing:
Customer’s faithfulness; advocacy, devotion; constancy
Discipline of identifying and nurturing the yield of best customers
through a long-term, reciprocity, value-added relationship.
44
Customer Insight Group, Inc. All rights reserved. • www.customerinsightgroup.com • +1 303.422.9758

Loyalty marketers want programs
that engage and retain.
60%
59%
39%
35%
31%
Customer Engagement
Customer Retention
Profitability/Revenue
Customer Lifetime Value
Customer Data Collection
5

How is loyalty marketing evolving?
 Development has been directly related to advances in IT an POS
 Future developments are supported by IT, specifically in the areas of:
 Social media
 POS
 Web 2.0 (iAPPS — web content management solutions)
 Mobile
 Location or proximity
 Ubiquitous, i.e. Hard Rock Rewards
S&H
Green
Stamps
Airlines
Hotels
Rental
Cars
Credit
Cards
Retail and
Grocery
Stores
Coalitions
Merchant
Rewards
Instant
Rewards
Ubiquitous
Rewards
1896 Today
6

10 Loyalty Marketing Trends for
2014
7

1) Consumers care about loyalty
programs.
82.4%
MORE LIKELY TO SHOP
AT A COMPANY WITH A
LOYALTY PROGRAM
8

IN 2015 ON AVERAGE, AMERICAN CONSUMERS
ARE MEMBERS OF
LOYALTY PROGRAMS
2) Consumers see value in enrolling
in loyalty programs.
9

3) Loyalty marketers are NOT
engaging their members.
45% customer base
enrolled in loyalty
programs
35% enrolled
members
redeem
rewards
16% Total Customers
Actually Using Loyalty Programs
10

4) Social rewards are NOT
primary drivers of participation.
83.3%
consumers less likely to
participate in a program
that relies on social
rewards..
11

57%
2013
64%
2014
5) Loyalty points can be used
to influence purchase behavior.
“I modify when and
where I buy items to
maximize the points I
receive for
purchases.”
“I modify what brands
I buy to maximize the
points I receive for
purchases.”
46%
2013
55%
2014
12

6) Non-monetary program benefits
are important.
79%
71%
70%
62%
57%
49%
40%
36%
30%
21%
Discounts
Cashback
Rebates
Earn Status
Maintain Status
Personalized Experience
Product/Service…
Recognition from Brand
Share with People
Recognition from Peers
2X
MORE IMPORTANT
POST ENROLLMENT
13

53% consumers say most
marketing and advertising has very
little relevance to them.
51%
Loyalty marketers
DON’T know who their
most loyal customers
are and how to best
reach out the them.
64%
Markets say that they
are not using data-
driven marketing for
personalized content.
7) Communications are
NOT relevant.
14

8) Millennials’ Switch Brands to
Get More Loyalty Program Benefits
15

9) Loyalty programs drive
completed purchases.
16

10) Loyalty programs attract new
customers.
Improve
Customer
Acquisition
by up to
10%
Increase Market
Share by
20%
17

Loyalty programs out of sync…
 CUSTOMER
 More demanding, more choices
 Trust is key to keeping customer
loyalty
 Participation in loyalty programs
increasing
 COMMUNICATION
 Irrelevant, impersonal messages
 New customers/members are
forgotten
 No customer engagement plan
 STRATEGY
 Me too value proposition
 Launch and put into “auto” drive
 Measurement metrics not tied to
business goals
 INSIGHT
 Manage defection, not migration
 Data used to run program, not used
to run the business
 Customer relationships are “siloed”
in the organization
18 18

Questions?
Sallie Burnett
Customer Insight Group, Inc.
Email: sallie@customerinsightgroup.com

Social Media Library
http://www.customerinsightgroup.com/loyaltyblog
Infographics
http://www.customerinsightgroup.com/loyalty-infograph
SallieBurnett on Twitter
http://twitter.com/sallieburnett
LinkedIn Group
http://linkd.in/LinkedInDiscussion
Social Media Grader
http://www.customerinsightgroup.com/marketinglibrary/social-media-grader
White Papers & eBooks
http://www.customerinsightgroup.com/white-papers

State of Loyalty Marketing

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State of Loyalty Marketing