Thank you very much brudenell-ga for appreciating my efforts once
again! As before I will repost my findings for your easy retrieval.
Some marketers say that the success of a loyalty program usually falls
on the ability to identify the most valuable customers and then
pampering them. Before we start with suggestions, let us identify the
pitfalls.
"Frederick F. Reichheld, a vice president at consultants Bain & Co. in
Boston and author of The Loyalty Effect, a 1996 analysis of loyalty
programs, says most company loyalty programs don't slice data finely
enough to distinguish between customers who would recommend a
particular business to friends and those who would not."
"Many companies also tend not to do enough with their loyalty program
data to make Joe Sixpack feel special, too, says Woolf of the Retail
Strategy Center. According to Carlson Marketing Group, a
Minneapolis-based customer research firm, rewards programs cost
companies, on average, between 2 percent and 10 percent of a
customer's total spending at a given store."
"The clear message, says Marr: 'It's not enough to have CRM. You need
the hearts and minds of the customers to close the loyalty gap.'"
"CRM Strategies: Loyalty Programs That Are Working" (Page 2)
http://www.eweek.com/article2/0,1759,1424403,00.asp
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Suggestions:
1. "Fire the Worst Customers, Reward the Loyal"
"Back in 1995, Norman Mayne, the CEO of Dorothy Lane Market, knew he
was creating a major stir when he was one of the first executives to
start talking about "firing" customers. But he did just that, and then
launched Club DLM. Still the most radical, data-driven loyalty program
in the supermarket industry, Club DLM is aimed squarely at attracting,
keeping and pampering only the most profitable and most regular
customers at the expense of everyone else."
"The perks vary. Sometimes they're highly personalized, as when the
chain offered its top 800 bread-buying customers three free loaves of
French bread from its bakery. Sometimes, the perks are event-driven.
During a local price war on milk, Maynes recalls, grocers were paying
$1.70 a gallon for milk and selling it for 99 cents. Mayne knew the
one way to go broke was to lose 71 cents on an item that people buy
200 times a year. So for good customers, DLM printed coupons that let
them buy up to five gallons of milk for 49 cents a gallon."
"CRM Strategy: Fire the Worst Customers, Reward the Loyal"
http://www.eweek.com/article2/0,1759,1423605,00.asp
2. "Ebay's 'Anything Points'"
"How does the program work? Consumers can use the loyalty points they
earn from one business and swap them for points at eBay. eBay's aim:
to woo new customers to its site."
"Want to trade in those frequent-flier miles that will never amount to
anything for something you really want or need more?like an antique
rocking chair or a great deal on a mountain bike? People who have
unwanted miles or hotel points can swap them for eBay points."
"CRM Strategy: Ebay's 'Anything Points'"
http://www.eweek.com/article2/0,1759,1423589,00.asp
3. Make the Customer Profitable - Used in Harrah's Casinos
"Gamblers don't just win money when they play at one of Harrah's 26
casinos. When they swipe their loyalty cards, they're also eligible to
win a variety of perks, from appetizers to Swedish massages..."
"Here's how it works: Each Total Rewards program enrollee has a card
and a rewards account. Each time a customer plays a game or slot
machine, he or she inserts the card. A readout then shows how many
regular and bonus points he or she has accrued. After a certain number
of regular point totals are reached, the cardholder qualifies for a
Gold, Platinum or Diamond membership, which offers privileges such as
club memberships and speedy check-ins. Meanwhile, bonus points can be
turned in for free food and various other perks at the casinos. Away
from the floor, cardholders can check their balances and find out
about their latest perks from e-mails and Harrah's Web site. The
company also gives customers the ability to download a win/loss
statement for tax purposes."
"CRM Strategy: Make Every Customer More Profitable"
http://www.eweek.com/article2/0,1759,1423600,00.asp
Search terms used:
customer loyalty programs strategies
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