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BizReport : Loyalty Marketing : May 05, 2017

Loyalty Marketing: No longer about points, says expert

As expectations for more personalized customer interactions skyrocket, companies will need to carefully consider how they communicate with customers, prioritizing personalized communication in preferred channels over hitting channels with massive audiences, hoping to reach them.

by Kristina Knight

Kristina: You suggest that customer loyalty isn't about a program or points any longer. Why is that?

Pini Yakuel, CEO & Founder, Optimove: There's certainly still a place for loyalty programs and points in a business's CRM strategy, but ultimately, such programs are just one piece of the puzzle when it comes to building loyal, lifelong customers. Brands need to look at the bigger picture and ensure they make meaningful connections with their customers -- every day and every time they communicate -- if they want those customers for life. This is true for both customers who are a part of the brand's loyalty program, and for those who aren't.

Kristina: What has prompted this change?

Pini: Loyalty programs are no longer the end-all, be-all to build customer loyalty, as they are only a part of the overall customer experience. In today's always-on landscape, customers expect a lot more from the businesses they interact with on a daily basis. The rise of an increasingly device-driven world means that consumer expectations for personalization and convenience are higher than ever before -- 73% of consumers say that they prefer to do business with brands that spend time personalizing their experience. And with AI and predictive analytics at their disposal, there is no reason marketers can't deliver.

Kristina: How can brands better use loyalty programs to build on this trend?

Pini: Businesses will definitely want to establish a loyalty program that rewards customers who continue to make purchases. Loyalty programs are very inexpensive to implement, but can dramatically increase lifetime values, and an effective loyalty program will also improve retention by decreasing the value of purchases made through competitors. But in a world where a bad interaction with a brand is worse than none at all, each touchpoint with a customer must be personal and precise. For example, you don't want to send someone a 24-hour loyalty offer when you know that it normally takes them two days to open an email.

More from Optimove and Pini next week, including how brands can use AI to increase loyalty.

Tags: advertising, loyalty marketing, loyalty marketing trends, Optimove, rewards marketing

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