Build a Loyalty Program that Drives Value

Good morning, all,

I wanted to share this article written by Paul Long, referring to the value we see in customers who love to earn rewards points every chance they get.

 

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Build a Loyalty Program that Drives Value - Paul Long

 

Double Dipper:

[duhb-uh l - dip-er] –noun. Informal. 
A person or thing that earns points from one Loyalty Program while collecting points from the same or different loyalty program, especially to accelerate points-earning opportunities toward an award.
           a. Gamer [gey-mer]

 

We love the “Double-Dippers”.  We Love the “Gamers.”  These are the folks that use a Frequent Flier Credit Card to also earn points in an unrelated program.  These guys are the savvy customers who will earn points purchasing a gift card, and then turn around and earn points when spending the gift card.  These are the Extreme Couponers of the Customer Loyalty World.
  
Why do we love these guys? Aren’t they ripping us off? Well maybe, but not really. It all hinges on the Value Proposition - both for the consumer and the organization.  According to Alan Rosenspan, an industry expert, “That's one of the major challenges for any loyalty program -- making the participants feel that they are being smart, or prudent in belonging to it. Or, better yet, making participants feel that they are somehow taking advantage of the organization.”

 
"Consumers will often pay higher prices, or stick with a service that's unsatisfying, simply because they've started earning points."  
- Rockwell Clancy, Vice President, JD Power & Associates
 

Double-Dippers have the perception that they’re pulling one over on the competition, but if the margin allows it, gaming the system isn’t really that big of a deal. Especially if the customer is double-dipping in unrelated programs. That’s why the re:member group allows our Customers’ Members to earn points or get discounts by doing the things they do everyday. It doesn’t cost our Customers anything, but it adds incredible Value to the Member.

 

Mr. Rosenspan goes on to say that companies should most definitely implement a loyalty program—particularly since your competition probably already has one. But when you do, consider what will drive the Program—the Number One Driver being Value. The customer must perceive that there is a value, or the program will flop.  And by the way, “Value” to a customer does not mean you have to give away a bunch of stuff. It just needs to look like you’re giving away a bunch of stuff.

 

If you can provide so much Value to the customer without affecting your margins, then you’ve hit the sweet spot.  You will attract the Gamers and at the same time foster the right behavior from your customers—Loyalty.  In fact, Rockwell Clancy, Vice President of JD Power & Associates, claims that “Consumers will often pay higher prices, or stick with a service that’s unsatisfying, simply because they’ve started earning points.”  While we don’t want unsatisfied customers, we certainly want a second chance, and Loyalty Programs will afford us this.

Why do we love the Double Dippers? Because they understand the value of a loyalty program that drives the right behaviors, and will stay loyal as a result. 

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What do you think about the 'double-dipping' customer base? Have you taken advantage of their loyalty?

Sound off in the comments below.

 

Will

 

Will Michaelson

Sales Associate

re:member group

Phone: 952.224.8002

Email: will@remembergroup.com

www.remembergroup.com

 

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