Where is loyalty marketing heading?

I have been in the loyalty and rewards business for a couple of years now and recently discovered, interestingly enough, that there are still a large number of companies in South Africa today who haven’t implemented a rewards or loyalty programme for their members. A question that comes to mind, haven’t their annual turn-over/profits been affected by the recent recession? If it did, they would have realised that a repeat customer costs less than acquiring a new customer. Do they even know how loyal their customers are? How are they rewarding their loyal customers and how do they do it? Is it working for them on the long-run?

Have a look at the following figure which excellently portrays the customer loyalty cycle:

Gone are the days where Blue Chip companies could base their loyalty programmes on immediate gratification offers due to the market penetration of companies such as Groupon Premium (WOW!), Groupon, Citymob, Ubuntu Deal etc. They have flooded the market place with the daily mind-blowing deals that are being delivered straight to your inbox. The main reason why a company survives these days is through the loyal customer base it maintains. Marketing is quite a dynamic area in a business and the power it has should never be underestimated, neither the fact that it keeps evolving on a daily basis because companies have to come up with new ideas to keep the customer’s interest.

Let me throw a spanner in the wheel by asking the following question, which type of loyalty programme has been the most successful of all times and is continuously reaping the rewards for the implementation company? The answer: the Frequent Flyer programmes in the Aviation Industry with their award-winning formula of keeping their customers loyal! They successfully achieve this through awarding free points for every rand that the member spends at the business and in return, the points earned can then be redeemed.

This blueprint can be applied to any industry in the world, you just have to ensure that you outsource a reputable IT software company who can successfully integrate your loyalty software programme into your POS system, corporate website etc. I am referring to a company such as LoyaltyPlus, who has been the market leader in the frequent flyer space for quite a number of years.

Let us have a look at the SPUR family card for example. When a SPUR member dines at a SPUR outlet in the country, the card is swiped at the integrated POS system, points are awarded to his profile which he can then at a later stage redeem again at any SPUR. Therefore, the circle is completed, from awarding the member in-store and then again allowing him to redeem in-store = WINNING FORMULA!

There is no better time than the present to start rewarding your loyal customers. Failing to do so can be the cause of losing them to your competition.

South African Social Media Stats report

Yesterday, I posted an article about the future of social media. Today, I would like to highlight the following statistical facts on the influence it has on the South African population’s daily lives. If you are still unconvinced, Chatterbox Digital recently posted this video, check this out:

1. More than 4.8 million SA Facebook users;
2. 91% of SA internet users have a Facebook account;
3. 50% of SA Facebook users access it via their mobile phones;
4. There are 1.1 million Twitter users in SA;
5. There are more than 1.5 million Linkedin users in SA;
6. 29% of SA internet users have a Linkedin Account;
7. There are over 460,000 South African Goolge+ members;
8. SA YouTube users upload 48hrs of video every minute.

We need to realise that the Social Media wave is here and we must ride it. Make sure that you stay on top of your game in terms of your marketing strategy, content and monitoring and realise that you too can play this Social Media game!

Is Social Media a Fad?

Lately, I have been tasked by my MD to launch and implement our Direct Marketing Strategy which also included a segment called Social Media. As marketing professionals we are fully aware that our brands must live an active social life and that it is quickly becoming a very important customer service channel - as customers are interacting and socialising on the web.

Gone are the days that you can think of marketing as above-the-line advertising, below-the-line advertising, having a dynamic website and sending corporate newsletters to your customer base. Now we have Pinterest, YouTube, Facebook, Twitter, Foursquare, Google+ on the social media front to help with the building of your brand in a very cost effective way.

One of my customers recently conveyed their lack of interest in the social media space as they were afraid of bad customer feedback and the impact it would have on their business and brand moving forward. My answer was to use the opportunity to engage with the unhappy customer on how to improve their customer service! Brands need to take note that their customers are talking about their services and products even without them either knowing it or participating in the conversations!

Instead of being afraid – why don’t we all tackle social media heads-on? We need to realise that Social Media is here to stay and it should be considered as a consumer communications channel. Today, customers want to interact and communicate with their brands of choice via facebook, twitter etc. and social media is becoming more popular and part of their lives as internet usage on smartphones increases.

But, we need to be prepared, first of all consider the following before you launch your venture into the social media arena:

1. Have a strategy.
2. Select your channels coutiously.
3. Social media doesn’t provide any ROI but you can measure the social impact of your brand.
4. Choose your resources wisely.
5. Timing is of great importance to when you post your comments etc.
6. Always keep your brand image on the forefront.
7. Have a social crisis contingency plan of action in place.

Social media is growing up fast and customers are investing a lot of their time in the social space, better make sure that you are prepared and visible to reap the rewards!

Still one of my favourite videos which I would like to share with you: 

Check this out!