Is your loyalty program really working, or is it just checking a box?
That’s the question Mark Friedman put to Wise Marketer Managing Editor Bill Hanifin, CLMP™, who is also CEO of Wise Marketer Group, on Episode 155 of The Marketing Playbook podcast.
Bill has spent more than two decades designing loyalty programs and working with brands including American Express, Visa, Shell, and PepsiCo, and his starting point may challenge some long-held assumptions.
Customers aren’t loyal out of habit. They are constantly weighing a brand against its competitors on price, product, and values, which means a program built to inspire blind devotion is aiming at the wrong target.
As a colleague recently shared with Bill “behavior is the unit of design.” Not surprisingly, Bill explains in the podcast that a loyalty program’s real job is to change behavior and grow revenue. That requires a financial model, not a gut feeling. His benchmark: a strong program drives 1.4 to 1.6 times the value of a regular customer. If you can’t measure the lift, you can’t say whether the program is working.
The conversation also covers why the objective must be defined before anyone touches tactics. That means bringing IT, HR, and finance into the room early, and understanding the business model and competitive landscape before debating points and tiers. It sounds obvious, but it’s a step skipped surprisingly often, and it’s where many programs go wrong from day one.
Along the way, Bill shares what first drew him to customer loyalty and takes a look back at the Y2K era.
Mark closes with a question worth putting to any loyalty team: what’s one program, from any brand or industry, which has earned your repeat business, and what’s the one thing it got right?
Our thanks to Mark Friedman for inviting Bill to join The Marketing Playbook, and for a thoughtful conversation that gets to the heart of what makes a loyalty program worth the investment.
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