This recession has launched price wars in some industries (like the airlines, for example). Many other businesses are suffering from dramatic cuts in consumer spending. Many more struggle with declining brand loyalty to others.
But there are some smart marketers out there who are still finding ways to compete.
Loyalty programs have been one of the most successful tactics. For example, although Talbots Inc. has faced trouble with some brands in this economy, its Talbots Classic Awards program could be a bright spot.
The program helped significantly increase spending on the store’s branded credit card. In 2000, it was responsible for 28% of total sales—a number that grew as the program took off, reaching 46% by 2008. Now, the company is launching a new tiered program to increase customer engagement and gather more data on its members.
U.S. households have an average of 14.1 loyalty memberships but are only active in about half of those. This proves that you have to do more than get a sign-up—you have to offer rewards that are actually valuable and somewhat attainable to your customer.
If you don’t have a clue about how to start a loyalty program, the first step is to decide how many dollars must be spent to receive a percentage-off coupon or a flat discount. You can simplify the bookkeeping by awarding 1 point per dollar spent.
Learn more about loyalty programs (and what you can learn from your program’s members) in my next issue of Direct Response newsletter. Not a subscriber?
