14 May Featured in CW Magazine: Ask these 5 questions when creating a loyalty program

Credit: istockphoto.com/andresr

Originally published at cw.iabc.com

By Ray Clopton

It has been said that the customer is always right, and yet businesses continue to creep further away from this tenet when it comes to customer loyalty programs.

In honor of last week’s “Get to Know Your Customer Day” on 18 April, a new U.S. survey conducted by The Harris Poll on behalf of Wilbur asked consumers what they want—and don’t want—in a business loyalty program.

Here are five questions businesses must ask when creating and implementing a loyalty program to ensure they keep the customer top of mind.

Question 1: Are you asking for too much?

We’ve all experienced it—a favorite brand unveils a loyalty program in which the benefits almost seem to be too good to be true. You click on the link to sign up and are bombarded with a series of personal questions that border on being too intrusive.

According to the Harris survey, most Americans (71%) say they would be less likely to join a customer loyalty program that collects personal information, with 27% saying they would be much less likely.

Getting customers to join a loyalty program is never easy, so make it as quick and painless as possible by collecting only the data you really need. Use your emotional intelligence and remember that customer loyalty is fundamentally driven by how the customer feels about your brand.

Question 2: Are you still carding members?

One of the key hindrances to loyalty programs for business owners and customers alike is the antiquated loyalty card. We’ve learned that most consumers don’t want to carry them, and so they are often forgotten. Clerks are the ones often left holding the bag, responsible for either looking up or creating a new account, leaving other customers waiting in line.

Perhaps it’s time to cut the card.

The Harris survey found that 79 percent of Americans were more likely to join a customer loyalty program that does not require them to carry a physical card, with 34 percent saying they would be much more likely to join.

Question 3: Do loyalty apps really improve the customer experience?

Many businesses have heavily invested in connecting their loyalty programs with an app, thinking that it’s better for business. And, yet, the survey found that most Americans (58 percent) are less likely to join a customer loyalty program that requires them to download an app to access benefits, with 26 percent saying they would be much less likely.

I would even go as far to say that the home screen of a smartphone is becoming the next cluttered wallet. Convenience is king in loyalty programs. Finding the correct app, entering a password or dealing with a learning curve do not register as “convenient” or “cool” for most customers. Moreover, customers will soon realize that less is more, deleting the apps that they don’t want and only keeping the ones they find most useful. To make sure your app isn’t on the chopping block, make sure it’s useful and relevant.

Question 4: Is email marketing effective?

With statistics showing that email open rates have plummeted over the years, there may be a collective sigh of relief when learning that, according to the survey, more than half of Americans would be more likely to join a customer loyalty program that sends them regular marketing emails or texts for upcoming sales and promotions. In a separate study, Oracle found that only 32 percent of customers believe reward offers they receive are relevant. Again, it’s OK to communicate with consumers—just make sure that the timing and message are respectful and relevant to ensure the message sticks the landing.

Question 5: Is too much customer data a liability?

This question circles back to the first point that most Americans don’t want to join a loyalty program that asks too much information. It’s important to consider that extensive customer profiling makes your database a target for hackers. Just ask Marriott Hotels. The Marriott rewards program endured a PR nightmare when over 383 million customer recordscontaining a wide array of sensitive information were compromised by hackers.

Less data=less to hack.

The benefits of loyalty programs

About 86% of customers are more loyal to the brands where they participate in rewards programs, but U.S. consumers are becoming savvier, and therefore, more selective about the loyalty programs they join. This comes back to the central point that loyalty is driven by how customers feel about your brand. I believe consumers are ultimately more loyal to brands that respect their personal privacy. It is important for businesses to pay attention to what their customers want—especially when developing a loyalty program.