The Role of Loyalty in Communication Plans

Oct 02, 2007 12:23 AM  By

While triggered messages are effective in driving response and revenue, seasonal and cyclical efforts play a more proactive role, using classical marketing messages to drive demand.

During a recent Webinar we gave with Wendy Lynes of Harte-Hanks, we discussed how loyalty marketing communications can play an important role in marketers’ communication plans, both as a scheduled element and as a short-notice stimulant.

And since loyalty programs are more effective when they include promotional components, including loyalty marketing in your planned communications will help the ROI of your loyalty programs as well.

Seasonal campaigns
Many years ago as a buyer for Federated, and more recently as a marketer for the former Galyans Trading Co., my life was dictated by the marketing calendar. We knew exactly when the big events were scheduled, and could plan our inventory and assortments around them. Most consumer marketers still use these seasonal events as the framework for their communication plans.

To the loyalty marketer, these seasonal messages provide great context for both acquisition and retention. The company is already investing the dollars in print or electronic marketing, so with some creativity, loyalty messages can be worked into the overall campaign efforts. In more mature programs, the loyalty message can become the seasonal campaign. Neiman Marcus, DSW, and REI all have substantial, all-company campaigns built around their loyalty efforts that, based on their presence year after year, must be effective.

Cyclical campaigns
The repeating campaign is relatively rare in traditional marketing, since there are few justifications for communicating every week or month without causing significant customer fatigue. Loyalty, however, has the statement, which is an easily justifiable reason to touch a customer. Coupled with credit card statements, these repeated, low maintenance messages normally get all the way through to the consumer, and should be an important part of any marketer’s communication plan.

Ad hoc campaigns
I doubt I’ve ever met a marketer that hasn’t had to throw together an e-mail campaign on a Wednesday to send out on Thursday to drive extra revenue on Friday through Sunday. Demand forecasting is inexact – companies sometimes fall short and need to go to extreme lengths to stimulate demand. These are golden opportunities for the loyalty marketer. There are many ways to promote into a loyalty program member base – and as long as the promotion is only valid for members, it becomes a benefit.

Drip marketing
With a little foresight, triggered messages can be complementary to the rest of the communication plan. Reactivation campaigns can be scheduled to coincide with quiet periods for the rest of the company, since a few days early or late will have little impact on response. Suggestions and other behavioral triggered messages can be positioned for mid-week delivery or off-week delivery.

Data improvement
Underlying all of these campaign impacts is the overall improvement in customer insights gained through loyalty marketing. The additional insights can and should have far-reaching impact on such key marketing areas as customer segmentation, trade area definition, response and attrition modeling, cross-category correlation, and lifetime value-based decision making. Companies earlier in their loyalty and CRM lifecycle usually see the biggest payoff from this area.

Ultimately, loyalty marketing communications are a different flavor of messaging, presenting a different context for the dialog with your customers. This difference provides some variety in your interactions, helping to deliver better response overall from your customers.

Michael Greenberg is president of Loyalty Lab, a San Francisco-based developer of best customer management and loyalty solutions for the retail, travel, CPG, and consumer services industries.