Commentary

What Makes A Loyal Consumer: Experiences, Not Points

The best loyalty marketing programs aren’t simple points-based systems for consumers to earn cash-based merchandise or values, but the ones that create engaging and sustaining consumer experiences.

That’s what Dino Michetti, Epsilon VP/GM, told Email Marketing Insider Summit attendees during the opening “beyond the coupon” panel.

“What the customer is really looking for is unique experience and some kind of unique interaction with the brand,” Michetti asserted. He noted that the “travel and hospitality” categories understand how to leverage their brand experience on behalf of their most loyal consumers. But he implied it is an opportunity for marketers in any category, so long as they can address and answer the fundamental loyalty question: “Are we creating better engagement with the customer.”

To do that, he said, brand marketers need to measure loyalty programs “beyond dollar value.”

If you do that, he said: “You’ll end up fighting the CFO,” because it will come down to bottom line metrics and results.

“At the end of the day, are you creating a more loyal customer that is going to go out of their way to engage with the brand,” he said, adding that has to be “more than the immediate dollar value that you generated from just loyalty.”

Michetti agreed with fellow panelist Daniel de Grandpre, CEO, DealNews, that the No. 1 thing is to understand “what dose your customer want.” Amazon Prime has figured that out better than any other loyalty marketer. Funny enough, de Grandpre said Amazon Prime isn’t actually a loyalty-marketing program. He said it’s really a “membership program,” but that it was created based on understanding what Amazon’s most loyal customers really want.

“It’s not that you have to have a points based system or give a reward,” he explained, adding, “It’s that you have to figure out what you customers want and give them that.”

Epsilon’s Michetti cited another brilliant example. Dunkin Donuts’ “Dunkin Perks” program enables members to earn free perks, such as cups of coffee during non-peak times for Dunkin Donuts stores.

Aside from creating an engaging and sustaining experience for its loyal customers, Michetti said the program is remarkable, because it pays for itself. He said members actually “pre-pay” their Dunkin Perks member cards, effectively enabling Dunkin Donuts to wave credit-card company charges and actually “earn interest” on their members’ cash.

That model, he noted, enables marketers to “get away from, ‘we can’t afford the program’ ” logic.
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