The Marketing Boutique

The good news about investing in relationship marketing is that you can measure the results and show these to Management. There’s bad news too! You can’t hide behind, “But the business would have declined even more without it,” excuse unless it’s actually true.

So, here are eight tips that improve the ROI of your Loyalty Program. These are some effective ways to make sure that you’re delivering the largest profit bang for every marketing buck:

8 Tips That Improve ROI Of Your Loyalty Programs

A) Start with your objectives and strategy. If you don’t know what you are trying to accomplish, you’ll never be able to determine whether you did it, and you’ll likely waste a LOT of money along the way. While you’re at it, make sure your objectives and strategies are consistent with those of your organisation and get senior management buy-in. Otherwise, your efforts may be doomed from the start.

  1. Examples of objectives: Increase sales by x% over the next 12 months; improve profitability by y% within the next 3 years, etc.
  2. Examples of strategies you can use to meet your objectives: Improve customer retention; increase # trips per customer; increase average purchase per customer; reduce costs of new customer acquisition, etc.

B) Clearly establish how you are going to evaluate your program and how you will define success. Get it in writing, and get sign-off from the relevant stakeholders. For an unbiased view of how the program is performing, evaluation should be done by a different group or department than the one actually running the program.

C) Segment your customers based on their current and probable future value to you and on their needs from you. You want to influence different customers to do very different things, e.g., get the best customers to stay with you longer and to refer their friends; get occasional customers to shop more often; encourage non-customers to try you.

D) Test, test, test! Make sure you have a control group (people who act just like the people you are targeting but don’t get your offer or message). The difference between control (what they would have done anyway) and target (what they did after they got your message/offer) is the actual benefit you delivered.

  1. Ideally, try different messages or offers before you commit yourself to the full promotion. Try everything from an offer you think is way too rich (the upside might surprise you) to just information, with no offer at all (just hearing from you – or finding out something new about your business – may be enough). See what gives you the best return, and roll it out to the rest of your targeted list.
  2. If your message is time-sensitive (like Valentine’s promotion), preventing you from doing pre-testing, divide your list and try a few different messages/offers. Make sure you track the learning from each and test different approaches over time.
  3. Remember, the list (whom you speak to), the offer (what you are willing to give them) and the creative (look, feel, copy) all affect redemption, in that order. Use learning from previous offers to do a better job choosing whom to contact, and more importantly, whom NOT to contact. This step is essential if you are using an expensive medium, like direct mail.

E) Focus your spending on incremental behaviour, i.e. getting customers to do more than they would have done otherwise. Note: this doesn’t always mean more than they are doing. For example, retention of best customers is a perfectly valid strategy if they are at risk of defecting.

  1. Don’t focus on rewarding PAST behaviour (which you can’t change), but on influencing FUTURE behaviour (which you can). Don’t reward someone for being the best customer this year – give her an incentive to continue to be the best customer next year. You can position the offer, however, as a reward for the previous behaviour, e.g. “Only our best customers qualify for this special offer.”
  2. Do the math. Determine what the customers in a particular segment are doing now and what you want them to do differently. Calculate how much you think you need to spend to change the behaviour (based on offer and distribution costs and probable redemption) and how much more margin the new behaviour will bring. What’s the return on your investment? If you were your CFO, would YOU fund the offer?

F) Optimize the balance between your base offer (e.g. 1 point for every dollar spent) and extra, targeted offers.

  1. Use your customer data to identify your greatest opportunities and threats. Hold back enough budget to send the right messages/offers to the right customers to get that incremental behaviour you want.
  2. Note: the base offer is NOT what generates loyalty; it is merely the bribe to get your customers to use the card and share information. If you spend too much on the base offer, you turn your program back into mass marketing.
  3. Get more out of less spending on your base offer by creating/using a currency that your customers value. For example, in one loyalty program, we found that a significant proportion of our members would rather have one of our points (which cost us just over 2%) than a 10% discount! Cash isn’t always the answer.

G) Leverage inexpensive electronic media, social media and vehicles you need to send anyway: your POS/cash register receipts, in-store messages, statements/bills, e-mail, etc.

  1. Save expensive direct for campaigns that are likely to have high redemption and drive a lot of incremental spends, or for valuable customers/prospects you can’t reach in other ways.
  2. Make sure you have customers’ permission to e-mail, and always include clear and easy directions for opting out.

H) Don’t waste your money giving incentives for e-mail addresses. You will end up with a lot of useless information from customers who only wanted the incentive.

  1. The only offer you need for a valuable e-mail address is “We’ll send you relevant offers and information by e-mail.” Now you have a permission-based list of customers who want to hear from you and tell you what they are interested in getting more information. Make sure you deliver value to them.

MMC Jewelry launched their new Spring and Summer Collection and needed to raise its brand image in the targeted location of South Florida as well as grow their online sales. The company sold the collection via an e-commerce platform and at the same time, the designer of MMC Jewelry wanted to expand into retail and spa locations in Florida. Read More

Understanding your target market behaviour is important. More so, since we all live online. Forrester estimates B2B eCommerce will top a trillion dollars and account for 12.1% of B2B sales by 2020. B2B online shopping is growing, giving you a lot of opportunities for your online B2B store. 

Understanding your target market behaviour through your website

Site Search & Product Filtering

For your b2b customers, online shopping is not a pastime. They are often under pressure to find the right product, at the right price. Most have time constraints, with little time to second guess themselves. As such, your site needs a powerful filtering and categorization set-up to help them find what they are looking – fast.

While your B2B customers may know what product or service they need, doesn’t mean they also know product features or service support that will be truly beneficial for their project. Sometimes, they don’t even have to stick to a strict budget. Consider including a Suggested Products functionality feature to your site to help increase upselling and cross-selling opportunities.

Include sales reps in your customer journey

As the B2B online shopping experience becomes increasingly self-managed by your customer, your sales reps may find themselves with fewer customer interactions. The consultative selling is still required, but since online shopping has removed one ore more steps in the actual closing process, their timing needs to be properly timed. Give your sales reps the opportunity to have a greater impact on your company by implementing a CRM that includes a contact manager, integrates your newsletter campaigns and social media.

An integrated website with backend technology could mean your sales reps will be interacting with your customers at the right time to answer questions, handle objections and provide a quote.

Expand your multi-channel marketing

To ensure that your B2B buyers see your content messages on the social media platforms they use the most, manufacturers and distributors are increasingly engaging customers at different touch-points.

This direct engagement using different sales channels generate more incremental revenue and cost less to serve a customer on a single sales channel. More importantly, engaging your customers on multi-channels increase customer support, which is in line with current customer expectations. As customer expectations rise, B2B buyers are demanding a full spectrum of self-service, full-service, and hybrid purchase options.

Create a Content Funnel to Drive B2B Online Sales

More and more B2B companies are developing a content marketing funnel. The reason being is that B2B products have a longer sales cycle and need more time to close the sale. It is estimated that a B2B sale requires 6 to 8 touchpoints to become a lead. That is 8 touchpoints to one sales lead.

To better understand your target audience’s behaviour and to help them move them down your funnel faster is by creating content they need. Content includes:

  • FAQ: B2B buyers want to learn about businesses and products
  • Competitive Analysis: Content that answers why choose you over the competition
  • Case Studies: Showcase your technical expertise, how you make it simple.

This is what they’re doing during all those preemptive touches. They’re reading, digging, and — most importantly — researching. B2B buyers prefer to self-educate well over halfway through a purchase decision rather than connect with a company sales rep.

Your content-based strategy should be designed to funnel customers from different pain points to your products. The content-based strategy should start on your navigation bar down to trade show visits.

Content Marketing should include content helps your target audience to:

  • Understand — to educate buyers
  • Select — to guide purchase decisions
  • Implement — for post-transaction support

If a new customer arrives to your site, they should be able to learn more about how you can help their problem and potential solutions you provide. Instead of pitching products, your goal is to develop need awareness so the buyer places a real value on solving their problem.

Remember, after all the false news, fake social media accounts, showing your content expert matter on your site is very important. No one else should be able to claim the same expertise as you. Content needs to sound trustworthy.

Selected Resources For You

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