Christian Hausammann of Snipp Interactive looks at how brands invest time and money in customer acquisition but neglect to invest in customer retention.

A significant amount of time and money is invested in customer acquisition, but brands often neglect to invest in customer retention.

All too often, there is a distinct lack of importance placed on specifically targeting and rewarding existing consumers, when in fact an increase of even 5% in customer retention can show a profit increase as high as 95%.

Marketers usually get the (incorrect) idea that customer retention is not worth the time or money because of one, or both, of two reasons: either no clear process was determined by the brand for retaining customers when a loyalty program was set up, or because past retention efforts were usually too small to be effective on a larger scale.

This leaves a ‘bad taste’ in the mouth of brands who come to believe that there is negligible ROI on customer retention – an incredibly false perception.

The truth is, brands can implement a successful retention strategy, if they put their minds to it.

There are four main steps which can help brands who seek to retain their consumers and see a positive effect on their profit margin:

• Have a clear concept of how you are going to retail to retain customers, based on profound data analytics.
• Create a persistent and performing retention program with the right creative concept.
• Have the right offers and incentives to retain people.
• Build in proper measurement systems and metrics that allow you to track the success of the retention initiative.

The best way to demonstrate how effective customer retention can be is with a real example.

A large department store brand with an impressive loyalty program of over 800,000 members created an offer that they would send twice a year to their members. Sent via standard mail, this offer included a voucher worth £10 with a purchase of £100. This was an expensive initiative for the retailer, and they did not see the response rate that they expected to get.

The brand’s marketing department developed a new retention concept, based around analysing existing data to determine the moments when consumer’s lost interest in the loyalty programme and stopped engaging with it.

This analysis found three clear patterns of when consumers fell out of love with the loyalty programme: at four months, six months, and eighteen months after the last transaction.

Based on these findings, the department store’s agency developed a communication plan that combined the right offers and incentives for each consumer segment which were sent out each month to those people identified as being on the verge of inactivity.

The result of this retention campaign was phenomenal. Over 50% of contacted members responded to the communication. The interesting finding was that only half the members actually redeemed the offers that were given to them, while the other half did not but still came back to shop. What’s more, the average purchase as a result of this retention was nearly triple the normal purchase amount.

This retention campaign has been running for years now and clearly demonstrates how investing inn a well run, well planned and well executed continuous program, focused on retention, pays off.

Data analytics will be able to precisely identify the timelines of activity and inactivity and usually several clusters of activity will be found. The frequency and interval of, or between, purchases can vary dramatically amongst customers and loyalty program members.

The 15/50 Rule

It is important not to forget the 15/50 rule of Customers to Business, in which the top spending 15% of consumers make up 50% of the business, while the bottom 50% of consumers make up 15% of the business (as explained in an excellent report, The Loyal Treatment: Maximizing Customer Value Through Engagement by Dennis Armbruster, July 2013).

Visualizing this purchase behaviour for these main segments makes identifying purchase patterns easier, especially when the data analytics may give results that contradict commonly held conceptions about a business’s consumers.

A strong creative concept and valuable offers and incentives are also necessary. Surprising consumers by recognizing them through creative promotions with great rewards has an extremely high value and ROI to brands. This may include digital rewards such as music downloads or Uber credits, that they can instantly access on their mobile devices, or offers tied to their loyalty program card for easy redemption in-store.

These types of personalized incentives add value to the lives of your consumers, creating an emotional connection to the brand and lasting loyalty.

Another consideration is to distinguish the most valuable consumers who deserve a more substantial reward from those who could be warmed up with an offer that is less personal but will jumpstart their path to loyalty.

Connecting with your consumers can take time, and it is important to develop a two-way line of communication to gather more data and continue adapting the creative messaging of the campaign and the incentives offered.

Finally, your analytics, KPIs and other issues related to reporting back on the results of your activities must be defined at the start of the project.

This should encompass both direct and indirect measurements: direct results stem from the redemption rates of offers and incentives initiated by the campaign, while indirect results are those consumers who returned to shop as a result of the retention program but who did not redeem an offer/incentive.

Utilizing data analytics, creative campaigns that incorporate relevant rewards and proper reporting, marketers will soon find that customer retention programs are worth the investment and deliver a loyal consumer base.

Christian Hausammann, Global Loyalty Director at Snipp Interactive, has over 15 years of experience in Dialogue Marketing, Loyalty Management, Store Cards and Giftcard Management. Before joining Snipp, he was Head of Customer & Loyalty Management at Swiss Post, managing large loyalty clients Leder & Schuh and Top Pharm.

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Mark Spicer of Snipp Interactive looks at how some key technologies and trends are impacting the loyalty industry

Most loyalty programs were conceived decades ago and still largely follow traditional “earn and burn,” transactional, points-based program structures.

However, new technologies (e.g. mobile, the Internet of Things, social etc.) have given us the ability to conceive of entirely new paradigms in loyalty, moving well beyond what we see in the marketplace today. Marketers are beginning to catch up to the possibilities opened up by these technologies, incorporating them into programs. However, this brings additional challenges, as well as opportunities – for one thing, it means consumer expectations are higher!

Technology is not just changing what is feasible in the context of loyalty program design for brands, it is also driving changes in consumer expectations for such programs, in particular around personalisation and immediacy.

More fundamentally, technology is changing the very nature of the relationship between consumers and brands, moving away from the one-way, transactional structures of yore to a more holistic, always-on dialog between equals.

These technologies, and the changing behaviours they inspire, are dramatically impacting the very notion of “loyalty” itself. Below are some of the key technologies that are shaping the next generation of loyalty.

Smartphones are the new loyalty platform

Like many other industries and sectors, smartphones and high-speed data networks are dramatically impacting loyalty program design, behaviour and usage. Virtually every program has an app today, enabling members to view, manage and personalise their accounts easily.

The wide assortment of functionality on today’s smartphones is opening up endless possibilities for loyalty programs: location-based services to reward browsing and create highly targeted offers; mobile wallet integrations for seamless payment and points accumulation; camera integrations for coupon scanning and receipt-based purchase validation; gamification and social activity to increase the effectiveness and reach of programs.

Smartphones are the platform on which new loyalty programs are being built.

Big Data personalises loyalty for me

Today’s computing power, storage and analytics have allowed even the smallest of companies to crunch through large amounts of data, and have therefore transformed customer expectations around program personalisation.

The use of machine learning, neural networks and other increasingly sophisticated analytics is further enabling real-time personalisation of such programs. We are already seeing examples of programs that dynamically generate offers and adjust points based on individual patterns of behaviour; expect to see a lot more in the future, but more relevant and targeted.

The Internet of Things = loyalty for everything
The Internet of Things dramatically expands the reach and changes the nature of loyalty programs, transforming them from transactional, purchase-driven programs to more holistic, interaction-based relationships.

As a greater amount of “things” become connected, programs get access to more – and more varied – data; data that can be used to reward not just transactions but behaviours. Examples include insurance companies being able to reward people who log 10,000 steps daily on their Fitbits or utility companies who can reward those who set their Nest thermostats to be one degree lower than their daily average.

New programs for the New Economy

The sharing and social economy is further engendering new types of loyalty programs. In the sharing economy, it is not just consumers who can get rewarded for their loyalty, but also a company’s supplier partners – a new twist to traditional channel loyalty programs.

Further, technology is also making it easier to string together sets of brands to create coalition programs around common themes – e.g. a “green” loyalty coalition, or a “Tea Party” coalition.

Gamification makes driving consumer behaviour fun

The rise of gamification has also had a profound impact on the design and implementation of loyalty programs. Accepted wisdoms around the ways in which consumer behaviour can be shaped or what motivates employees and other stakeholders or the kinds of rewards required to incentivise consumers to participate have been upended by the rise of gamification.

Coupled with big data and the rise of mobile, gamification can be a powerful tool when used effectively in loyalty programs.

Universal POS systems

The fundamental focus of all programs, though, will remain purchase transactions. All the loyalty in the world isn’t helpful if it isn’t eventually translating into future purchases.

One of the fundamental issues with the implementation of loyalty programs has been the need to integrate with existing POS and other systems. Loyalty has been, for much of its existence, a large IT implementation primarily because of integration issues.

Thankfully, there are a host of technologies and companies that are providing solutions to solve this thorny problem – either by integrating directly into POS solutions ahead of time, or circumventing the integration work altogether. Such technologies can work via the bar code scanner, can leverage receipt-based scanning or can interface with the credit card vendor.

These solutions make it considerably easier to implement and experiment with loyalty solutions – as well as create flexible partnerships and loyalty coalitions as needed.

Mark Spicer is Loyalty Solutions Director for Snipp Interactive UK, a subsidiary of US company Snipp Interactive Inc. Snipp brings together a full suite of technology solutions and best-in-class CRM and loyalty marketing expertise to help drive sales, increase engagement and inspire loyalty, collecting meaningful data on consumers, their behavior and ultimately increasing bottom line profits. For more information, see www.snipp.com.

Snipp Interactive is headline partner of the IPM Awards 2016.

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Weight Watchers (UK) Limited, the world’s leading provider of weight management services, has launched an industry-first cross-category promotion in the UK, created by integrated marketing agency Toucan.

The activity is designed to encourage consumers to make healthy choices at their local supermarkets by rewarding purchase of all of the 175 Weight Watchers food products across more than 20 different categories, including yogurts, ready meals, breads, and many other foods. It is the first promotion the company has ever run across all its products.

Claims are submitted by uploading receipts showing qualifying purchases via Web, email or text. Consumers will be entered for the chance to win exciting fitness prizes. The total prize pool is worth £1 million, including active holiday breaks, Fitbit activity trackers, hula hoops and a host of other fun fitness equipment.

Matthew Davis, Head of Commercial, Weight Watchers, says: “It is great that we are able to encourage people to be healthier and more active through this campaign. Delivering such a strong cross-category promotion, backed up with extensive media and membership messaging, enables us to differentiate ourselves from competitors while collecting insights that will inform future marketing activities and encourage consumer loyalty.”

Toucan’s cross-category campaign for Weight Watchers has been delivered in partnership with Snipp Interactive Inc. (“Snipp”), an international provider of marketing promotions, rebates and loyalty solutions. Snipp’s incentive-marketing technology, which enables brands and retailers to increase customer engagement, drive purchase, and encourage loyalty is being utilised to manage the online and mobile channels, purchase validation process and redemption mechanism.

“With so many products across so many categories, Toucan identified that Weight Watchers faced a real challenge in how to run a cross-category proof of purchase promotion,” said Adam Doran, Managing Director, Snipp Interactive UK. “Having discounted traditional methods such as printing codes on pack due to high costs and complexity, they approached us to see if we could provide a solution.  Using our mobile receipt validation technology, with one photo of one receipt, we are able to validate purchase of all Weight Watchers products in all retailers.”

Nina McCoy, Senior Account Director at Toucan, adds: “Shoppers are constantly searching for the best offers with desirable incentives for purchasing. Promotional campaigns are effective conversion tools when they tap into consumer lifestyles. With this UK-industry first, Weight Watchers is showcasing its holistic health approach, expanding its target audience, and effectively raising brand awareness.”

The promotion runs from March 1^st to April 29^th 2016 in the United Kingdom. More information can be found at www.myWWrewards.co.uk.

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Technological advances mean shopper marketing has broken out of the confines of the retail environment and can be found all around us, driving massively increased investment in the sectors, which is becoming one of the key areas for promotional marketing spend.

This is the conclusion of a webinar, Shopper Marketing Amplified, hosted by Carey Trevill, Managing Director of the UK’s Institute of Promotional Marketing and featuring contributions from marketing technology specialists Snipp! Interactive and retail and shopper marketing experts TPN.

The webinar, which took place at the end of November 2015, can be viewed on YouTube.

Camille Kennedy, Senior Director of Marketing at Snipp Interactive, pointed out that “spend on Shopper Marketing in the US has doubled over the past two years. A large proportion of that growth has been due to digital and mobile.” Kennedy added that research shows that “more than half of purchasing decisions are happening outside the store – but 30% are still happening in-store.”

Justin Stephenson, Managing Director, TPN Retail Marketing, focused on the changing role of Shopper Marketing in the UK, where it is becoming a key weapon in the marketer’s armoury as the retail landscape goes through massive changes.

Stephenson discussed the impact of the economy, changing consumer shopping behaviour and the introduction of a range of new retail formats. Shoppers now shop more often but are more purposeful in their ‘missions’.

He pointed out that supermarkets’ ‘clean floor’ policies have significantly reduced brands’ opportunities to create brand engagement with consumers. As a result, digital marketing, particularly involving content, has become more important. “Content becomes increasingly more important. Content that is accessible will change the way shoppers engage with brands through different digital media, such as social media.”

Snipp’s Camille Kennedy endorsed this point, saying that in the US, 92% of shoppers “say they are making decisions because of social media.” Retailer apps are becoming incredibly important in the in-store environment, she added.

The hour-long webinar covers a range of topics including the role of Shopper Marketing; differences between the US and UK retail landscape; the impact of social media; the rise of mobile; e-commerce and m-commerce; loyalty; and data collection and measuring ROI.

Click here to view the webinar on YouTube.

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Global loyalty solutions group Snipp Interactive has appointed Mark Spicer as Director, Loyalty Solutions. Based in London, Spicer will report to Adam Doran, Managing Director for Snipp Interactive UK.
As a key member of the global loyalty solutions group, Spicer will connect, consult and collaborate with prospects and clients to understand their business goals and objectives to create loyalty solutions to drive performance, engagement and ultimately revenues. His primary focus will be on the UK and Ireland markets.
With 20 years’ global experience in the loyalty sector, he was most recently based in Saudi Arabia working for National Air Services (NAS) and flynas with a remit to create their new frequent flyer program. Starting from scratch, the program was designed, created and launched within six months. Before NAS, he was based in Mumbai, India, where he was responsible for the ICLP Indian operations and managing three frequent flyer programs and a number of other clients. He also spent time working for Aimia in the Middle East where he managed the leading telecom loyalty programme for Mobily in Saudi Arabia.
Spicer has experience in the loyalty, performance improvement and incentive industry across all sectors gained from working at Maritz, Grass Roots and Skybridge Group. With particular experience in the telecoms, financial services and airline sectors, Mark has been successful in delivering a number of varied programmes for clients including product development pre-paid plastic card products.
Adam Doran, Snipp UK Managing Director, says: “His expertise and knowledge will ensure our clients have the resources and support to further enhance their loyalty and retention strategies.”
Snipp’s incentive marketing technology platform enables brands and retailers to drive customer engagement and purchase. Its solutions include loyalty, rebates, promotions, rewards and data analytics. SnippCheck, Snipp’s unique receipt processing engine, is now the market leader for receipt-based purchase validation, having powered several hundred programs for leading Fortune 500 brands and world-class agencies and partners. 99% of all households in the United States have been exposed to Snipp’s programs.

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