When a company implements a loyalty rewards program as part of its retention efforts, the expectation is that customer engagement will begin to increase as a result. Passionate, engaged customers are likely to spend more, as well as recommend a product or service to their friends and family, driving stronger revenue for any business. With this mind, however, marketers must be acutely aware that customers are not content with receiving rewards that aren't tailored to their specific needs. If organizations discover that these initiatives are falling short of producing a meaningful ROI when they assess the success of retention programs, there's one essential question that needs to be asked: Is the right value being provided to customers?
Making an impression
According to eMarketer, a recent survey by Maritz Loyalty Marketing discovered that one reason providing exceptional value to customers is key is that most consumers are enrolled in a large number of loyalty programs across a wide range of businesses. On average, the firm revealed that American Internet users participated in 7.4 loyalty programs in the last year, and they're enrolling most frequently in these offerings at retail stores (1.7), banks (1.3), airlines (1.1) and hotels (1.0). But just because many consumers are signing up for loyalty programs doesn't mean they're utilizing the benefits. In fact, Maritz noted that 53 percent of respondents who were members of loyalty programs had stopped participating in at least one during the past 12 months.
For marketers, this may be a concerning statistic, as it potentially indicates a disconnect between what they think they are offering and what customers are actually receiving. One major problem is that even the most cutting-edge loyalty programs won't boost retention rates if they don't offer highly targeted benefits. For instance, consumers don't want rewards that are not relevant or meaningful to them. Rewards should be something customers can integrate into their everyday lives or that surprise and delight them. A successful loyalty program will ensure that the marketer's brand is at the forefront of customers' minds when rewards are issued and used. To this end, providing generic rewards is not productive for companies trying to inspire engagement through delivering enhanced value.
Direct Marketing News explained that marketers must approach improving customer experience and retention with specialized approaches that aid in differentiation. The source reported that Megan Burns, Forrester's customer experience principal analyst, believes the quality of customer experience is critical, and meeting consumers' needs requires an attention to these details. By learning about a certain customer base, marketers can make small adjustments to their retention strategies that will lead to marked differences down the line.
One way that any organization can improve its retention rates is to provide ongoing, customized rewards with the help of white-label marketing solutions. Then the customer can be reminded of who provided them the reward each time they use it. By tailoring reward programs to an organization's unique target audience based on factors such as lifestyle, location and demographics, marketers can boost ROI, engagement and, ultimately, retention.