Next in loyalty: Eight levers to turn customers into fans - Deepstash

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Next in loyalty: Eight levers to turn customers into fans

mckinsey.com

Since the pandemic, over 75% of consumers have changed their buying habits, 39% changed brands or retailers, and 79% of those will continue to explore their options.

Loyalty programs can boost revenue from customers who redeem points by 15 to 25 % annually....

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Offering an incentive to redeem loyalty points can boost sales and incrementally spike revenue by reactivating dormant customer loyalty.

Moreover, companies that promote deeply can earn deeper engagement. What may be lost on a single transaction can be made up for in repeat...

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All loyalty programs have members who don't redeem points. This "breakage" reveals issues with redeeming points, members forgetting they've enrolled, unappealing or less relevant rewards, and unachievable reward thresholds.

The best loyalty programs achieve their full potential by r...

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Alliances can give access to new customers or markets, expand benefits, increase brand awareness and provide greater earning options. But partnerships can also backfire when clear governance is absent around key decisions, creating these pitfalls:

  • Rede...

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Many customers are enticed by exciting rewards in loyalty programs but lack sufficient program currency, or points, to access them. This can discourage them from continuing to accrue points.

With the points plus cash option, members can pay with a combination of their point...

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Program memberships or spend by members are a good reflection of the broad potential universe of members. However, members can be split into segments: enrolled, active, and redeemers. The most valuable metric is redeemers.

  • A ty...

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Loyalty programs provide valuable data about customers. Leveraging the data into meaningful, actionable segments can drive customer experience.

Segmenting by behaviour instead of needs, value, or demographics ensures that the specific intervention will driv...

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Loyalty data can create granular segments of customers.

Building a rapid A/B testing capability is vital to leverage these groups fully. It allows experimenting with new ideas, discarding what doesn't work, and scaling those that add value.

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A difficult challenge is accurately measuring the incremental impact of loyalty programs. Unclear key performance indicators (KPIs), complicated ROI calculations, and the need to account for the balance sheet impact of liabilities make moving toward a sustainable program difficul...

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