500FRIENDS BLOG
Loyalty trends & best practices

Single Objective vs. Multi-Objective Loyalty Programs

by Julia Leyrer
November 20, 2015
Single Objective vs. Multi-Objective Loyalty Programs

When it comes to providing initiatives to existing and prospective customers with objectives such as increasing customer retention and acquisition, there are two main approaches that are taken with promotions: single objective and multi-objective approaches. Although each provide a valued initiative to influence a certain customer action, they differ in how customers engage over time and how they’re structured within the business. Below, I address the differences between the two, and when to know which approach to take. Single objective. As it sounds, single objective approaches are loyalty initiatives that are created around a single objective in mind. This may be retention of at-risk customers through rebates, referrals of new customers with gift certificates, or the addition of benefits to increase overall customer satisfaction. This is commonly seen in the television network industry where... Read more

5 Pointers for Retailers during this Black Friday & Cyber Monday

by Arif Damji
November 13, 2015
5 Pointers for Retailers during this Black Friday & Cyber Monday

The largest consumer shopping time of the year is upon us and as many retailers are preparing, we've come up with 5 pointers for how to use your loyalty program to make the most of this Black Friday and Cyber Monday: 1. Layer special offers for your loyalty members. Black Friday and Cyber Monday promotions are normally sitewide or store-wide, aimed at your entire customer base. However, think about this from a member’s perspective--they joined for additional benefits and rewards. Consider providing members with points multipliers, exclusive sale items, or additional discounts (though be careful of margin implications). Also, remember that if you are worried about managing liability with the program, additional offers don’t have to be published or aimed at the entire member base. 2. Target your lapsed members. Members who haven’t made a purchase in a significant amount of time are pe... Read more

Managing a Multi-brand Loyalty Program: How to account for points usage behavior between brands

by Arif Damji
November 06, 2015
Managing a Multi-brand Loyalty Program: How to account for points usage behavior between brands

In the retail vertical, we see an increasing number of brands that are launching multi-brand loyalty currencies. This has been widespread in the travel vertical with the franchise model for hotels, but the growth of such programs in retail begs the question of how to best account for the differential in earn and redeem behaviour. Simply put, you cannot expect that a member’s earn behaviour will proportionally map to their claims with each brand, and instead, there is likely to be an increased claim rate with brands that have a wider set of rewards or more generous rewards. If left unaccounted for, this can lead to an unfair detrimental impact of the program upon the income statement of one or more brands. Optimize for beneficial cross brand redemption. Cross brand redemption is defined as where points that are earned with one brand are used with anothe... Read more

Loyalty for Luxury Brands

by Arif Damji
October 19, 2015
Loyalty for Luxury Brands

Over the last year, there has been a migration of luxury brands towards launching loyalty based programs. This, on our side, has meant a number of conversations with high-end brands interested in starting or restarting a loyalty program, often with the intention of moving customers to their direct channel and retaining more of their best customers. However, many remain concerned that a loyalty will “cheapen” their brand to their most discerning customers. I’m reminded of a conversation with the CEO of an online jeweler retailer who proclaimed, “Why should my customers collect points? They collect fine jewelry.” This fear and concern is of course valid, and in a world of declining loyalty program participation, high spending consumers are the first to lose interest in loyalty programs. So, should a luxury brand even look through the looking glass at a world of loyalty? The answer is a resounding YES, especially as many h... Read more

3 Musts for Retailers This Back to School Season

by Julia Leyrer
July 10, 2015
3 Musts for Retailers This Back to School Season

Back to school season is upon us and retailers are getting ready for what is expected to be a stronger consumer spending year. As you prepare for the season, carefully think about how to best use your loyalty program to keep your customers choosing your brand while shopping. Consider these 3 ways to reach your goals this season: 1. Use customer data for personalization. Give your loyalty members a reason to feel special and offer them unique advantages for being a part of your program, instead of having the same offers across the board for all existing and new customers. They are already seeing offers from various retailers, so your program should make them feel like they are valued members who are receiving additional exclusive offers that are special to them. Leverage your repository of customer data—from what products your customers have looked at and saved/added to a wish list, to products th... Read more

When Should You Start Thinking About Loyalty?

by Lauren Chan
November 11, 2014
When Should You Start Thinking About Loyalty?

How do you know when it’s time to start thinking about loyalty? Investing in loyalty is a big decision but has great rewards if deployed correctly and efficiently. Loyalty is a solution for companies who want to drive incremental lift and better understand their customers. If you are contemplating whether or not loyalty is the right solution for your company, ask yourself these three questions: 1. Is your cost of customer acquisition high (and your customer retention rate low)? Most retailers, if not all, will answer yes to this question. With methods like search engine marketing and paid search advertising, the cost of acquiring a customer is skyrocketing and hurting profitability. Today, brands must focus more on retention rather than acquisition. In the long-run, shifting your efforts towards retention will be more profitable as you will encourage repurchase rather than a one-time purchase... Read more

Case Study: How U.S. Auto Parts Increased Spend Per Member 20% with 500friends

by Lauren Chan
November 06, 2014
Case Study: How U.S. Auto Parts Increased Spend Per Member 20% with 500friends

High cost customer acquisition with no tradeoff of lifetime value defines today’s ecommerce landscape. As most retailers struggle with customer retention, marketing teams deploy loyalty solutions to gain a competitive edge by connecting with shoppers and incentivizing repurchase. With the help of 500friends, a leading provider of end-to-end marketing solutions, U.S. Auto parts increased its spend per member by 20%, its repurchase rate by 14%, and its enrollment rate by 45% after updating the loyalty program of its flagship brand, Auto Parts Warehouse. We at 500friends published a case study (below) highlighting the success of U.S. Auto Parts in increasing customer retention using the 500friends LoyaltyPlus platform. Although most ecommerce marketing teams are resource constrained, IR 100 retailer U.S. Auto Parts realized the competitive advantage of loyalty and decided t... Read more

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