State of the Industry: Taylor Duersch
By: Taylor Duersch, VP Decision Sciences, Carlson Marketing
July 31
Driving Efficiencies Out Of Loyalty Programs
This economy has caused many companies to look at their budgets and find areas to cut. While there may be some fat in loyalty programs, this is a time to look for opportunities for growth. Loyalty programs are often the richest source of data. As such, companies should be looking at opportunities to leverage loyalty program data to drive profits. There are a number of objectives managers of loyalty programs must keep front and center:
- Understand how your program drives a relationship – There are many elements to any loyalty program. Marketers consistently utilize marketing mix models to understand how the various components of the marketing mix drive sales. However, few understand how the various components of loyalty programs drive increases in relationship strength and ultimately business outcomes. Understanding how loyalty programs drive relationships enables loyalty marketers to understand where to invest in their loyalty programs.
- Build out a profile for each customer – How does a company become more relevant in how they interact with their customers? They understand what attributes make customers different and know those attributes for each customer. Then utilize those attributes to be smarter in how you interact with your customers.
- Get smarter in investment decisions at a customer level – Companies should be using their data to understand the current profitability of a customer, estimate share of wallet and determine potential of a customer. Not all customers are equal. Many in the industry believe this but few actually act on this. If you as a marketer understand the value of a customer and the effectiveness of your marketing, you can quickly show management the impact of cutting costs.
By getting smarter and using insights, loyalty marketers can drive sales and be more efficient with their budgets. If this economy has taught us anything, we need to make sure what we do drives sales otherwise we should not be doing it.
Read the full State of the Industry here: State of the Industry: Taylor Duersch
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