Customer Engagement
Creating a Customer-Centric Company Culture

Designing High-Impact Customer Loyalty Programs with Papa John’s, Omni Hotels, J. Crew, Unique Photo and Centene

May 04, 2015

image

Let’s say your company wants to embark on a customer loyalty program, but doesn’t know where to start. What should it look like? How do you make it appealing to not only your base, but to your target, so that both keep coming back for more? Because we’re talking about a unique relationship between customer and company, one built on more than just a fleeting interaction with good prices and friendly customer service but something longer-term and more meaningful for both of you, we’re putting our Ask Amy hats on and doling out some helpful, practical (and only slightly clichéd) “relationship advice.” Here are 5 valuable give-and-take adages to help get your high-impact customer loyalty program up and running, as described to me by these top CMOs, who certainly know a thing or two about lasting customer relationships.

Demonstrate Your Worth—Bob Kraut, Papa John’s:

“We introduced our Papa Rewards Loyalty Program in 2010. The pizza market is so price sensitive and this creates a relationship and another point of connectivity to our most loyal consumers and gives us opportunities for segmentation and more precise marketing. Our customers love the program—Papa Rewards was recently named as the #1 loyalty in the restaurant category by Bond Loyalty. With that said, loyalty programs alone won’t work if the pizza isn’t good. We know our customers come back for our better ingredients and attention to quality—and it is important to us to reward them for their loyalty.”

Be Flexible —Tom Santora, Omni Hotels:

“Our Select Guest program has been an important loyalty driver for us for years, and we have the benefit of guest and event planner insights gathered through the program for more than two decades. In fact, it was the data we collected as part of our loyalty program that inspired us to move to a combined reward-based (e.g., earn free room nights based on your number of stays) and perk-based system (e.g., complimentary Wi-Fi, free water, shoe shines, etc.). Having this combined platform (versus offering simply a points-based program) allowed us to develop robust, meaningful and long-term relationships with our guests, who are making higher-cost, more ‘considered’ purchases. Offering a wide array of benefits is beneficial as it helps constantly remind members of how much we value our members.”

Treat It as an Investment—Shannon Smith, formerly of J. Crew:

“Loyalty programs require significant effort and funding to keep them fresh, top-of-mind, engaging and meaningful. At Sephora, I led the launch of the VIP premium tier and new types of program benefits, including new point-level rewards. The Beauty Insider program has been invaluable in that it enabled the company to build a customer database and personalize marketing communications to their enormous base of retail customers. However, I was constantly working with our analytics team to measure the ROI of the program holistically. It’s not an easy thing to do. I believe loyalty programs can have real value for companies, particularly when many retailers selling are the same products and competing for customers, like department stores. That said, I always caution a company considering a loyalty program to be very thoughtful and clear on the strategy for their program, how it aligns with their brand and how they will drive value from it, because it’s going to be a big investment.”

Make Yourself Available—Matt Sweetwood, Unique Photo:

“I opened our store in 2008. It was on the to-do list from day one. Customers were asking about it, and in fact we had so many ‘loyal’ customers that we knew we had to do it. We actually modified our gift card system to speed up the process. Customers earn points on purchases, and after a certain time period, those points convert to money on their loyalty/gift cards. Phase one was store-only, and shortly thereafter we implemented online, too. In-store shoppers get a physical card, and online customers automatically get into our loyalty program by simply clicking a box on account setup. We can combine online to a physical store card if they come in the store.”

Focus on Their Happiness—C. David Minifie, Centene:

“At Centene, we focus less on brand loyalty or retention than we do on positive health outcomes. To drive positive health outcomes, we educate our members on pro-active health management techniques, and conduct outreach to members who may need additional assistance. This includes programs for expecting moms, as well as programs for members trying to quit smoking or dealing with other addictions. We believe this approach not only improves outcomes, but also lowers our medical costs and increases member retention.”

Refer a Friend