Loyalty programmes have long been wedded into customer-facing brands’ marketing strategies. The idea here is to make people stay loyal to a brand, and incentivizing them to do so. But stats show otherwise. A report submitted by the McKinsey Global Institute claims that over half of those companies who have loyalty programmes fare equally well or in fact worse than those that don’t. As a result, some innovators who have succeeded in making loyalty pay have come together to share their views on what works best. Firstly, loyalty must be integrated with the overall experience as Starbucks has done so successfully. Business intelligence must be used from the granular bits of data gathered to aid in decision-making. Strategic partnerships must be built along the way which benefits all stakeholders, such as that between Sainsbury and Nectar. These collaborations must seek to solve the customer’s as well as the industry’s pain areas. The difference between the real cost to the customer and the perceived value must keep rising. The reinvestments made from these loyalty programmes need to be allocated to the customer bringing maximum profits.

Source:https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/making-loyalty-pay-six-lessons-from-the-innovators

Uploaded Date:12 November 2018