Is your loyalty brand heading the right way?

Can you imagine our world without brands? Perhaps not.

Brands are hard to ignore; they are so compelling in their appeal that others follow suit. If it wasn’t so, brands such as Heinz, Coca-Cola, McDonald’s, Mercedes and Louis Vuitton would not have become the immortal brands they are today.

To build an enduring brand, you need loyal followers. We all know that. Brands know it too. So what do some brands do that others don’t that make them stay at the top of the game for decades together? Somehow they seem to have it all figured out. They have flawlessly implemented the idea of staying relevant and consistent while continuing to amplify the competitive landscape. 

The big deal about making ideas happen

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As marketers we are always conceptualizing, creating and managing brands to be able to build long lasting and enriching customer relationships that truly stick. Through our brand innovation and activation campaigns we are striving to create an everlasting connection with our customers that will help establish brand loyalty, customer value and engagement.

So if we want to enhance our brand loyalty, we know sustainability is crucial. We need to deliver compelling value to each customer, every time. We also need to create and deliver reasons for our customers to come back to us time and again. Over a period of time, our customers become our brand evangelists and that is the ultimate win for any brand.

The same truth works for loyalty brands. To engage with our customers and to deliver consistent brand experiences, a loyalty brand has to have a clear program design and strategy in place along with clearly defined objectives.

The truth about loyalty brands, and more

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Building consumer or  loyalty brands involve similar and arduous journeys. This is the reason why consumer brands and loyalty brands need to be differentiated in strategy, approach and long-term treatment. For a consumer brand, it is most essential to create mass awareness and build a positive attitude towards the brand. All initial consumer brand marketing initiatives are targeted at that because it creates the desire for trial. And trial is fundamental to introducing a new brand or making a consumer try an existing brand.

However just creating awareness of the consumer brand which leads to trial is just half of the job done. This is where the loyalty brand is supposed to take over by creating consumer relevant offers and activations that will drive lift and shift in consumer spends resulting in customer retention and (eventually) brand loyalty. The loyalty brand relentlessly works on building the customer’s interest in the brand and moving it notches up. If done well, a satisfied customer will start endorsing and referring the brand to others resulting in positive word of mouth and brand advocacy.

The magic of one message in one brand

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Loyalty brands play a crucial role in enhancing customer relationships and building brand advocacy. Hence, marketers are now putting increased efforts to create differentiated loyalty brands by clearing defining its program design and strategy, objectives and what the loyalty brand should stand for. Now marketers are willing to create loyalty brands that have a single message but with multiple manifestations.

We are already noticing a trend where large organizations have started consolidating their multiple loyalty programs into one single umbrella loyalty program which represents their overall organizational philosophy being brought alive through a single loyalty program.  The Encircle loyalty program of Titan Industries is one good example here where the program weaves together three separate loyalty programs into one single consolidated loyalty program.

For instance, a customer walks into a World of Titan store to buy a watch for his wife. While making the purchase when the assistant punches in the relevant Encircle customer code the system shows the customer’s accumulated points and also flashes a useful piece of information: the birthday of the customer’s son is just around the corner. It prompts the assistant to ask: “Would you like to see the new range of Fastrack sunglasses, perhaps as a birthday gift for your son. You have enough points to buy one for free.” Based on shared values, such customer value proposition is most likely a winner all the way. Even in the long term, it is invaluable for improving customer understanding and ensuring product relevancy.

Know how to do it the best possible way

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Begin with a program health check-up: A basic scan to know what is working, what is not and more importantly, what will work better. A program health check-up will help you arrive at your loyalty dashboard—a quick snapshot of program outcomes with key customer behaviour indicators of enrollment and key financial performance indicators of sales lift, retention impact, acquisition impact, and the total expense of the program. This is a great and comprehensive way to measure your program outcomes and to track the performance of your loyalty brand.

Now you need to figure out your consumer value proposition: The proposition is mainly determined by the loyalty program and its design that gets crafted while creating the loyalty strategy around the brand. The end benefit for the user needs to appeal to the target consumers so that they know and agree with the answer for the crucial “What’s in it for me?” question.

Keep the message simple: As marketers when we are devising the loyalty strategy or crafting the loyalty message, it is important to think and imagine from the consumers’ point of view. We have a tough task in breaking through the clutter and effectively reaching out to our customers. The trick is, therefore, in keeping it simple and consistent and in delivering the promise.

Identify your high-value customers: It is very important to identify the profile of customers who have the maximum potential to deliver on your business objectives of growth and profitability. Create a visual mind map of who these customers really are to be able to make relevant and meaningful offers to them.

Treat each customer as unique: In India, there is great risk in treating consumers as one homogenous group. With 28 states and many different languages, cultures and ethnicities, the world’s second most populous country (with over 1.2 billion people) behaves more like a collection of smaller countries. Therefore, it is important to segment consumers by their transaction behavior that you capture during their purchase cycles across festivals and special occasions.

Use data effectively: Once you know, who your consumers are, how and when they spend and what they look for, create a comprehensive mix of rewards to meet their various needs. You can make your rewards unique and exclusive to suit each customer profile segments. Also, this data will help you make key decisions that will be central to the success of your loyalty program in the near future.

Use multiple communication channels:  Leverage multi-channel marketing services like direct, digital and mobile marketing to effectively reach and connect with your customers. This will help create a 360 communication environment to convey your key messages through various consumer engagement touch points.

At the end of the day, every customer is looking for a value proposition that works for him and is not too hard to understand. He or she does not have to struggle to answer the “What’s in it for me?” question. Investing in and building your loyalty brand will further enhance your consumer brand for sustainable competitive advantage while adding more and more loyal customers all the way.

Every loyalty program has a unique and distinctive personality, understand yours and get it on the right track.

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Our loyal customers affirm our goodwill and successes. But as our businesses get more and more customer centric, the big question is – how do we build on that loyalty to drive sustainable value and competitive advantage?

To do the working, we’ll first have to do the talking

The roles of CFOs and CMOs are fast changing. We know they can no longer operate as singular entities, exclusive of each other, because they have a lot more in common now. Both are relentlessly building value, while minimizing costs and risks. And for this they need to justify and multiply the return on investments on assets, tangible as well as intangible.

Intangible assets such as customer, brand, loyalty, intellectual capital et al now contribute almost 80 per cent of return on investment, as against the earlier 20 per cent. Customers, loyalty and customer intelligence, therefore, form the bedrock of growth and strategies for CFOs and CMOs.

Both the C-level executives are under tremendous pressure to deliver sustainable financial results in the near term and in the longer term. And they are also under pressure from a tenure perspective, with an average of 24 and 36 months. So if the CFO and CMO can share more than a working relationship they will be able to invest in a way that will spell benefit for both.

Is loyalty a part of your strategy yet?

Maybe it is not. And you might want to look at it for the better. Forrester Research says that fewer than only 15 percent of firms operate at a strategic level of customer intelligence. These are firms that have managed to turn customer knowledge into a corporate asset and they apply it to drive corporate strategy and business operations.

Firms that use customer intelligence at a strategy level drive improvements in customer acquisition, retention, satisfaction, revenue, profitability, and customer value in the short term as well as in the long term. But the thing to remember is that strategically intelligent firms will most likely have a senior-level sponsor or champion: a C-level customer intelligence evangelist. This is the person who successfully leads, makes innovations and reinvents the strategy from time to time for long-term business impact.

It is time to look beyond the hurdles

We all know how it works. The CFO and CMO approach the business from two different perspectives: the CMO is targeting the business from a customer experience perspective and the CFO is trying to drive it from a financial perspective. And many times they tend to be at odds, and then there is tension in the air.

The measurement is always a hurdle. CFOs and marketing departments do not have robust methods to measure customer experience, loyalty and other similar things. And they often struggle in presenting their case to the CFO to make investments in brands, in customer loyalty and employee training to drive a better customer experience. As such investments in these areas become the first things to be ticked off the list by the CFO when there is pressure on numbers.

So many of the high-performing companies have nowadays adopted a more methodical and data-based approach and have used the idea of business value as a competitive advantage. These companies acquire numbers and analyse data to get insights about what drives their strategy, as against looking at multiple things from a non-financial perspective. This approach helps CFOs and CMOs understand requirements and constraints and find solutions, strategies and implementation methods (together) for long-term growth and success.

Striking a thriving balance

Is it too hard to strike a balance when the objective is the same? CFOs and CMOs have a common objective: to build value and increase profitability. To be able to complement each other’s functional objective to achieve their larger strategic goals, CFOs and CMOs are increasingly building a working relationship. They are finding time in their busy schedules to meet, share interests and build rapport.

Understanding both sides of risk is critical for the CFOs and CMOs. But what is the best way to do it? To begin with, they should be able to think creatively and collaboratively, not only about the risks of the proposed marketing action, but also the risk of not acting. Generally speaking, CFOs are familiar with a variety of risk assessment. With the help of the CFO, CMOs should perform risk assessments of marketing strategies and become comfortable with the appropriate assessment tools. While CMOs are often not as adept at assessing risk, CFOs are often not as comfortable at assessing the risk of not acting. By collaborating, it is more likely that the business will arrive at a decision that best fits the situation and the organization.

What works?

In the end, we know that the mantra is always to rely on trust if things get rocky. No one can foresee everything. Competitors may change plans, markets may get choppy and complicated and the results are many times inconclusive. It is best not to second guess but trust each other to do the best thing possible for the business. And this can only happen if the CFO and CMO have an understanding of each other’s objectives and priorities, and a relationship in place.

As Jerry Rebel, the CFO of Jack in the Box suggested, “The CFO-CMO relationship is one of the most important in today’s risk-sensitive, growth-focused environments.” In the end, the real emphasis — and real business value — hinges on prioritizing the relationship, learning to speak the other’s language, and respecting the unique point of view that each brings.

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