Once upon a time, the marketing department was an expense line without much accountability. No one really knew what they did or why…including, all too often, those in the marketing department. But then along came the finance department and their need to measure everything, in response to the change in business realities.
Welcome to the Real World
Suddenly, marketing budgets were scrutinized for efficiency and effectiveness and dare we say it? Return on Marketing Investment. More technology was developed and added leading to, in very short order, sophisticated Customer Relationship software, refined audience targeting, customer experience measurement and operational improvement programs. Marketing was no longer considered an art form and now had the same performance demands as other departments. Marketing could no longer hide behind the old advertising adage, “I know half of my advertising works, I’m just not sure which half.”
Embracing the Information Age
Nowhere is this more in evidence than with customer loyalty. Loyalty programs have been around a long time. Punch cards offer something free after 5 or 10 visits. Then it was loyalty cards that were swiped to record rewards earnings and transaction data.
Today, the more progressive brands have graduated to mobile, social and online loyalty programs that do tremendous things. This article is not aimed at them. No, this article is aimed at emerging brands, medium and smaller companies and even those who haven’t yet recognized the need to think and operate like a brand.
The data brands can collect from social channels is large and deep, or in corporate speak “quantitative and qualitative”. Placed into a well-managed database and leveraged properly this data is the holy grail for marketers in virtually every business.
Successful Example – Restaurants
The restaurant industry is probably the premier example of an industry using technology & loyalty to grow and sustain their businesses. Restaurants are high volume retailers that sell products that customers need daily if not multiple times a day. Their challenge is to cut through the competitive clutter to capture and retain a regular set of customers to drive the business.
In its basic form, loyalty programs exist mainly to increase customer usage of a brand (frequency) in order to raise sales. If traffic does not increase from among existing customers a brand is forced to rely on gaining traffic and sales via new customer recruitment…a risky and expensive proposition. Loyalty is also a strong tool for tracking, visualizing and personalizing messages to customers and gaining deep understanding of the customer journey/lifecycle.
They also are proven vehicles, when executed well, to attract and retain the often elusive Millennial demographic. Millennials react very well to loyalty programs that are well-executed: easy to understand, provide value for certain behavior, do so fairly quickly, and communicates clearly via e-mail, thereby not cluttering social channels with unwanted brand messages.
Avoid Burying the Brand in Data
Too often we are seeing brands bury themselves in complex loyalty marketing programs trying to utilize every piece of the enormous data collected on customers via technology. They do so in an honest effort to increase traffic and sales. Many are not successful to the point they could be and should be.
There is a term the folks at NASA once used: “The Gee-Whiz” factor, as in “gee-whiz, look what we can do.” It was applied to make the point that, “just because we can do something doesn’t mean we should.” In other words, the ends must justify the means. It helps cut through the ever-growing data clutter and keeps focus on the critical path.
The Ideal Marriage
Use technology and loyalty to your best advantage, by all means. Starbucks is a great example of a brand marrying technology with loyalty to attract and retain Millennial customers while at the same time keeping Boomers and GenX customers engaged. No surprise, their sales are on a roll. Just remember, as a smaller brand yourself, not to get caught up in the “Gee-Whiz” of technology.
Focus on engaging well understood customer groups with your brand (assuming you have one defined), personalizing your communications with them, and incentivizing them to use you more. Then measure only those areas that directly influence your success: existing customer visits and spend, new customer visits and spend, overall traffic trends and of course sales trends. There’s plenty there to keep track of, and everything beyond that really belongs in the “Gee-Whiz” category.
Chris Petersen is CEO at On Brand Media, providing solutions for clients navigating an increasingly diverse media landscape. Practices include Brand Development, Marketing, Customer Experience, Media Buying, Creative & Technology and Restaurant industry expertise. Learn more at www.onbrandmedia.com and contact Chris at firstname.lastname@example.org.