Every business has a loyalty program. If you have customers and you try and keep those customers, then you have a loyalty program. Not all are thought through and not all businesses use marketing as a primary retention tool, but businesses with a substantial number of customers who have some untapped potential usually employ marketing in some form to increase retention.
For those companies that do plan their loyalty marketing, many (most?) start with objectives, then move to strategies and on to tactics. At least the smart ones do. Although it’s amazing how many skip right to the latest, sexiest tactics.
However, there’s a step that comes between the objectives and the strategy that many marketers do not explicitly consider…positioning.
Just like a brand, positioning is critical to the success of a program. It sets the stage for not only the strategy, but also the entire communication and messaging platform.
Your program’s position is the value that you are offering your customer. To be successful, your program needs to be differentiated and provide your customer an emotional benefit. Remember…people buy emotions. Period.
So, what are you offering your customer? Following are four popular and effective positions. But please note that they are not mutually exclusive. Many great programs contain elements of more than one. But there should be one overriding positioning that becomes the foundation for your loyalty program.
The most popular positioning is savings. This is all about money. Your loyalty program is going to save your customers money in some form. For savings, you can position this as savings vs. competitors or savings vs. other customers. It’s a subtle but important distinction. Do you want customers to feel they are getting a better value than if they go to a competitor or a better value than other customers. Typically, rewards or other “enrollment” programs are positioned as savings vs. other customers. You have probably been hit up by companies to “join our program and get 5% off your purchases if you do this, that, and the other thing”.
This is internal positioning, meaning that the program offers customers something that other customers cannot get. Unlike savings, it’s not about discounting (but could include some discounts). It’s about services, products, or special treatment that is available only to people who are part of the program. For example, upper-tier members of a rewards program are entitled to special access or quicker service. Email program members can take advantage of sales or new product offerings a few days before other customers.
This is external positioning and exposes the uniqueness and value of the program over competitors. Here, the messaging is focused on keeping customers from defecting to competitors. This positioning is typically used when the program is truly unique from what competitors are offering. For example, if you have a rewards program and your competition does not. Any time you hear about a rewards program as part of their advertising campaign (GolfNow®, Best Buy®, Hotels.com®), this is the positioning they are using.
This positioning is a bit different. Appreciation focuses on ensuring the customer recognizes your gratitude for choosing to do business with you. Appreciation can include discounts, rewards, or added value, but really focuses on the reason rather than the product. Surprise and delight is a common appreciation positioning. As an example, Citi® actually named their rewards program “Thank You” and even uses the URL thankyou.com.
Positioning will help determine the basic direction and strategy of your program. But most importantly, it will help attract your customers and contribute to the success of your retention marketing efforts. So, choose wisely!
Jay Weinberg is President of The JAY Group, a loyalty marketing company in Chicago that helps clients increase customer retention and lifetime value. firstname.lastname@example.org thejaygroup.com loyalty-leaders.com