With 1.8 billion consumers enrolled in an average of 14 loyalty programs, it is no wonder that many rewards are expired or unclaimed long before customers even notice. Who can blame them? They are being bombarded with offers, mailings and information from all directions.
But, this simple fact remains: customer reward programs are one of the best ways to improve customer retention and increase sales.
To accomplish this, businesses need to match their communication tactics with their customers’ ever-changing preferences. For instance, in today’s mobile world, coupons and promotional codes delivered to mobile devices are quickly replacing fliers and mailings. Do you really know how your customers want to be reached?
The key to standing out in this saturated market goes back to fundamental marketing. Businesses must better understand how, where and when customers prefer to receive your information – and deliver it based on that demand. Following are five of the most common pitfalls made by companies today with tips about how to overcome them.
• Pitfall #1: Overlooking the mobile revolution— Businesses need to take advantage of the popularity of mobile devices. The number of cell phones is expected to surpass the total number of Americans by the end of 2012. Text messaging is proving to be great avenue for welcome messages and reminders. Text and mobile communications are morphing into the preferred communication of choice for a growing number of consumers. According to a 2010 survey from Harris Interactive and SoundBite Communications, 43 percent of consumers would act upon loyalty program benefits if coupons and promotional codes were delivered to their mobile device. Organizations should adapt to this trend and create active dialogues with customers through text messaging, whether soliciting communication preferences or delivering actionable offers and account notifications.
• Pitfall #2: Being one dimensional—Using more than one communication channel will help businesses increase redemption rates and revenue. Studies show that multi-channel strategies result in a threefold increase in redemptions, versus relying on just one channel, equating to millions of dollars. So, make sure you incorporate several customer touch points, such as e-mail, text and social media.
• Pitfall #3: Forgetting to ask how and when you should reach customers—Consumers are simply overwhelmed, getting bombarded by reward offers from a growing number of retailers. Capturing how each and every consumer prefers to be contacted has measurable results, including improved customer satisfaction and retention, higher campaign results and greater ROI. So too does knowing how often to contact customers. Too much contact can be a turn off. Too little contact can show that you really don’t care, taking away millions in potential revenue.
• Pitfall #4: Assuming customers know their preferences—Many retailers forget to regularly ask their customers one simple question: “How would you prefer we deliver your information?” Retailers should create and maintain a database incorporating all customer feedback to continually honor these preferences and maximize meaningful communication. One way to generate this feedback is to incorporate interactive automated voice messages, and provide customers with the option to receive program information via text, voice or email messages, creating a two-way dialogue that yields an accurate read on consumer preferences.
• Pitfall #5: Procrastinating—The moment a customer signs up for a loyalty program is the best time to capture customer opt-in for notification. They are happy. They are eager. And, they are listening. Do not make the mistake of waiting to find out how they prefer to receive redemption notices, reward balances, upgrade offers and other relevant communications.
Mark Friedman is the chief marketing officer at SoundBite Communications, Inc., a leading provider of on-demand, multi-channel proactive customer communications and loyalty reward program solutions. He can be reached at mfriedman@soundbite.com