Loyalty program memberships in the financial industry have grown 164 percent since 2000 to 239 million. A popular credit card commercial asks, “What's in your wallet?” If yours is full of loyalty program cards, you’re not alone. According to the COLLOQUY’s Loyalty Census 2007, there are 1.3 billion loyalty memberships in the United States — four for every person in the country. As loyalty becomes more popular, smart marketers are fine-tuning their strategies to stand out in this increasingly crowded arena. Here are some of the important ways loyalty marketing is evolving today. Leveraging loyalty strategies to reward healthy behaviors Since its introduction, loyalty marketing has spread from the travel industry to financial services, retail and other industries. Now the healthcare industry is taking a closer look. With healthcare costs rising at double-digit percentages every year, both employers and managed care organizations are offering wellness programs designed to reward individuals for healthy behaviors and reduce costs. However, the effectiveness of some programs has been limited by challenges such as the need for ongoing member communications to drive active participation, and the hassles of monitoring the program, managing fulfillment and tracking results internally. During its many years of experience with loyalty programs for clients in multiple industries, First Marketing has developed strategic expertise and technology for unique loyalty marketing programs. Healthy Solutions, the consumer healthcare experts at First Marketing, is leveraging that loyalty experience and technology to offer a new wellness rewards program, Healthy Rewards for Kids, launching in early 2008. The program will be a turnkey loyalty solution providing ongoing member communications as well as cutting-edge technology for tracking, reporting and reward fulfillment. According to Senior Vice President Ariana Nied, “The first phase of Healthy Rewards for Kids will enroll children ages 0 to 6 and reward parents for compliance with preventive care guidelines for checkups and immunizations and for preventing childhood obesity and accidents. Both obesity and accidents have significant impact on short-term claims costs as well as the long-term health of the child and long-term care costs.” Obese children incur three times the healthcare costs of an average insured child, and an emergency room visit for a near-drowning victim can cost $75,000 or more. “If one child escapes a near drowning because someone secures their backyard pool, the potential savings in claims could pay for the entire program,” continues Nied, “not to mention offering the potential to influence the health of the next generation and future costs in a positive way.” Flexing data collection muscle Repeat sales and referrals are great, but the real marketing muscle in loyalty is customer data collection. Loyalty programs track purchase patterns, spending — even traffic on your Web site. Plus, loyalty program members often volunteer additional information about their lifestyles and interests. Using that data with today’s advanced analytics allows you to create communications that are highly personalized and relevant to individual members with the precise targeting that produces real results. Customer data collected through a rewards program also allows you to create a “best customer” profile and target your sales messages to prospects who resemble your most loyal, profitable customers. Testing new tools and technology Loyalty marketers are testing new technologies to capture, process and record individual transactional data more efficiently. Smart cards record customer information on an embedded chip. Radio Frequency Identification (RFID) devices both record customer information and transmit it with a wireless signal. Even biometric identifiers such as fingerprint readers are being tested. All these technologies offer the potential to gather and process customer data faster and to use that data to provide more personalized service and communications. Member communications are evolving, as well, with the advent of E-mail Marketing 2.0 systems that can automate many aspects of communication-intensive loyalty programs. Event-triggered e-mails, along with automated outreach and reminder programs, make electronic communication more convenient and cost-effective than other forms of communication. E-mail communications can also be highly personalized with customizable images and text, “sent on behalf of ” personalization and dynamic segmentation for precision targeting. Continuing evolution As loyalty marketing continues to mature, we can expect more new technologies to increase the efficiency and effectiveness of loyalty programs, as well as the spread of loyalty marketing strategies with new applications for additional industries. However, despite the evolution of loyalty marketing with new applications and technology, the basic principle behind loyalty’s success remains the same: Reward your best customers and they’ll reward you with increased sales, higher profits and more new business through customer referrals.
An easy approach to a winning loyalty strategy Trust the loyalty experts at First Marketing to help you create an effective loyalty strategy. In addition to our new Healthy Rewards for Kids program, we offer Catapult™, a comprehensive planning process that results in a complete, ready-to-implement loyalty program — including a plan to test before you invest — all in just 12 weeks. For more information about Catapult or Healthy Rewards for Kids, contact First Marketing at 800.736.0145 or e-mail marketing@first-marketing.com.
Mike Simpson has been involved with the development and leadership of the largest loyalty programs in the world. After starting his career in consumer packaged goods — culminating as Executive VP of Sales and Marketing at the Kellogg Company in Battle Creek, Mich., and as EVP of Sales and Marketing for the USA at Pepsi Cola in New York, Mike went on to lead the world’s biggest Loyalty Marketing Agency with clients including British Airways, Visa, Holiday Inn, Northwest Airlines, Hallmark Greeting Cards, Sprint and BellSouth among others..