The four pillars

A decade ago, customer marketing revolved around coalition-led loyalty programmes, with organisations banking on consumers being attracted to their brand on the back of a wider package.

In time, though, these became difficult to manage, and the appeal for customers and participants alike started to wane.

Alongside this, however, emerged new channels and ways of interacting with existing or potential customers, particularly through the use of social media and mobile devices. Here, the ability to deliver targeted and relevant messages through the right channel at the right time is essential, and attention switched towards the concept of customer loyalty management to drive both spend and an emotional commitment with an individual brand.

The ultimate aim of a customer loyalty management programme is to attract new customers, cement relations with existing ones and ultimately develop “brand champions” who will think of that brand first when looking to make a purchase, and actively recommend it to their friends and family.

Indeed, studies show that the lifetime value of a loyal customer is ten times the value of one who considers a brand their second choice or lower.

There are four main pillars to this concept:

1. Customer-driven relationships: Marketers remain vital in structuring how and where to engage, but customers’ preferences, motivations and attitudes will ultimately drive success.

2. Loyalty programmes: These retain an important role to play, giving customers the opportunity to raise their hands and opt into a relationship with a specific brand.

3. Wider event streams: In today’s data-intense age, organisations need to be able to draw on customer information, not only from their databases, but also from streams such as social media, mobile phones and other software, enabling the right message to be delivered through the right channel at exactly the right time.

4. Test and learn: The use of such data also enables marketers to test out concepts and strategies on groups of customers, evaluating which messages and offers are most effective, through which channel and at which time of day. The use of mathematics applies logic and rigour to creative marketing, giving marketers confidence their decisions can be justified and will pay off.

A number of leading brands are already adopting such an approach to their marketing strategies.

TIBCO Loyalty Lab’s marketing platform software gives marketers the ability to draw on data to test out marketing concepts and create high levels of engagement with customers through carefully targeted campaigns

Virgin America, for instance, adopted a new yield-based approach to its Elevate programme, based around the revenue per passenger mile. Customers were able to accrue points based on ticket price and were also given extra points as soon as the aircraft doors closed. The programme led to increased revenues of 25 per cent from loyalty members and a rise in membership of 40 per cent in one year.

Outdoor clothing retailer The North Face has also taken a data-driven approach to its loyalty programme, segmenting its customer base by activity and affinity, and both rewarding its most valued customers and building stronger connections with others through its VIPeak Rewards plan.

The scheme includes a 2 per cent cashback plan designed to encourage those who bought items to make repeat visits, and has led to twice as many such visits from those taking part in the programme as other customers since its launch earlier this year.

TIBCO Loyalty Lab’s marketing platform software gives marketers the ability to draw on data to test out marketing concepts and create high levels of engagement with customers through carefully targeted campaigns. By integrating data from a wide range of sources inside and outside the organisation, and applying mathematical analytics to it, organisations can identify trends and monitor the results of campaigns in a way that no human being could.

In an increasingly competitive landscape and the age of big data, such processes can form the basis of a marketing strategy that will deliver increased brand awareness and loyalty, and drive higher sales from customers, again and again.

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