Don't think about loyalty as plastic cards but rather as a strategy

Businesses understand that getting new customers is more costly than maintaining loyal customers. However, when it comes to implementing sales and marketing strategy, many businesses focus on offering great incentives to new customers rather than rewarding their regular customers for their loyalty.

During the most recent Cartes & ID 2010 Conference, Anamaria Chiuzan, Senior Marketing Manager at The Logic Group, spoke about this loyalty paradox saying that "businesses should not think about loyalty as plastic cards but rather as a strategy".

Based on her research, she said that customers think that companies are benefiting from loyalty programs more than they do and for that they are getting loyalty memberships in many loyalty programs to get the benefits of all these loyalty programs (In another word, their loyalty is related to the benefits that they are getting not the brand). Also, she noticed that businesses are shifting their focus from providing exceptional customer service to their loyal customers to just offering them discounts and cash back.

Chiuzan stressed on the importance of understanding the business strategy objectives of the loyalty program to ensure that the loyalty program will:

1. Retain top customers (Loyal customers don't need to be more loyal to get a reward, they should be rewarded for being loyal customers)
2. Interact with customers using the right channels (TV, Internet, Billboard).
3. Clearly show customers the behavior they should follow to get a reward.
4. Give customers easy options for reward redemption (Customers spend approximately 3 times their normal spending when they do redemption)
5. Help businesses in understanding the shopping behavior of the customers to better target them (by sending them relevant massages based on their shopping profiles).

To get more details about these issues, please download the Loyalty Report 2010. (http://www.the-logic-group.com/Product/LoyaltyReport2010)