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If it costs five to ten times more to acquire new customers than it does to sell to an existing one, then why don’t brands create loyalty programs that benefit their existing customer base?
Over the last twenty-plus years, loyalty has evolved in a distinctly lopsided fashion with loyalty providers reaping almost all the rewards. Conversely, consumer experience has barely developed at all. And with the average spend of a repeat customer coming in at 67 percent more than a new one, companies are missing out on potential revenue.
This imbalance between what customers expect and what loyalty programs provide is clearly seen in recent statistics. According to the 2015 Colloquy Customer Loyalty Census households belong to an average of 29 loyalty programs but are only using 12 of them (meaning repeat usage and at least one-time reward redemption). Businesses take a financial loss on time invested, while customers receive no additional value from participating in a brand’s loyalty program.
We believe that while it’s not necessarily a challenge to sign up a new loyalty program member, it is a challenge to get them to use the program in a way that generates ROI. Many brands fail to understand the fundamental distinction between loyalty, which marketers pay for via points and punches, and loyalty, the organic information acquired through unbeatable customer experience that is unique to the market. This distinction sits at the very heart of the imbalance between what brands often provide and what customers want.
Creating a win-win scenario for both parties means understanding the need to wrap a best-in-class customer experience around the acquisition of loyalty program members, so they naturally and impulsively return to the program over and over.
Our Modern Loyalty Program at T3 is designed to solve for these specific pain points by essentially rewriting the script for loyalty implementation through:
Modern Thinking: Migrating clients into digital era thinking, making the loyalty program more responsive to how customers natively interact, now and in the future.
Modern Architecture: Agile development practices combined with a cloud-based services layer to quickly scale the program across interaction points and into thousands of locations.
Modern Execution: A focus on “demos over decks” resulting in market test and learn programs within the first 90 to 120 days, significantly accelerating the program’s delivery to internal stakeholders and decision makers.
By embracing these concepts, brands can rectify the provider-centric imbalance holding most loyalty programs back and offer customer experiences that are more personalized, simpler and accessible whenever the opportunity arises.