[2012 trends] Loyalty programme trends for 2012

Great branding

Branding a loyalty programme is as important as branding a product or service. Not only does it promote the usual good stuff like recall and liking, it creates a platform off which to develop a long-term relationship with the customer. Customers who feel some kind of emotional pull to your loyalty programme are more likely to sign up for it and less likely to move to a competitor.

Loyalty programme branding that also reflects the known values of the core brand reinforces that brand's positioning and desirability and vice versa. Moreover, a unique and memorable name goes a long way too.

A perfect fit

Different consumers have different needs, and this should be reflected in the way in which each loyalty programme is structured. For instance, a loyalty programme for a top-end credit card should offer different rewards to those offered by a large supermarket chain.

The credit card customer is unlikely to be interested in discounts and is more likely to be attracted by rewards that have a high perceived value, like air miles or points that can be accumulated towards the purchase of luxury items. This customer is also more likely to donate his or her points to a charity, so that option needs to be available too. Not only does it provide additional choice for the customer, but also introduces a feel-good factor that enhances the experience of the brand and the propensity to stay loyal to it.

The broader customer base of a supermarket chain is, on the other hand, more likely to be price-sensitive and therefore more likely to be attracted by discounts or cash-back offers, whether these are instant or redeemable from time to time. A good discount off the month-end grocery bill every few months will mean a lot.

In short, value needs to be tangible, and it needs to be meaningful to the customer base.

Simple, simple, simple

The way in which some loyalty programmes are run is complex and often confusing. As a result, consumers get lost along the way, either losing interest in the programme or developing negative feelings towards the core brand.

Therefore, whatever format you choose for your loyalty programme, it is important to make the way in which points are earned and redeemed clear and to make the accumulation and redemption processes simple. Life is complicated enough for a consumer, without having to figure out how their loyalty to a brand benefits them.

Points alone do not create loyalty

This is the crux of the matter for 2012. Loyalty programmes need to be about more than earning points. They need to be a hub around which the customer can develop a real relationship with the brand and around which marketers can manage and enhance loyalty.

This is where add-ons come in, like surprise discount vouchers or special offers for particularly loyal customers. It is also where social networking comes into play and where loyalty programmes have the opportunity to become part of more than just the shopping experience, but of the greater social experience as well.

Make it interactive

Loyalty programmes that encourage customers to interact with the brand have far greater 'stickiness' than those which don't and, like the kind of rewards that are offered, the form of interaction needs to be customised to suit the customer base.

Downloads of recent ads, mobile apps, ringtones, screensavers and interactive games may work well in the youth market, while more mature, discerning consumers might value the opportunity to post their opinions about products and services online.

Chuck the gimmicks

Gimmicks, like Christmas crackers with cheap toys inside, never live up to expectation. Chuck the gimmicks and give real, consistent rewards that will encourage real, consistent customer loyalty.

Loyalty matters (really)

Loyalty matters - and it needs to be guarded and nurtured. If you do not use your loyalty programme to do this, you are missing the point.

For instance, it is up to five times more costly to gain a new customer than to sell to an existing customer. That is a huge benefit to every business right there. Selling additional products, new variants and range extensions to existing customers is also much easier to do. Loyal, satisfied customers are likely to purchase more frequently than occasional customers are or to consciously choose the brand they're loyal to over competitors.

So never take loyalty for granted, it is incredibly valuable and, once it's lost, it's lost forever.

Please don't go

Something that is seldom acknowledged is the value that loyalty programmes have in managing attrition. If loyal customers are encouraged to interact with your company on a regular basis, this presents the opportunity for you to deal with problems, as they arise and so to strengthen the customer relationship rather than potentially losing it.

Loyalty programmes are also a mine of management information, and can help perceptive marketers pick up developing trends quickly, identify changing customer needs and identify trends in service delivery complaints.

In short, properly structured, managed and used, loyalty programmes add great value - not only for consumers, but for your business as well.