April 5, 2011
We have just published my new report on loyalty marketing: "A New Approach To Brand Loyalty."
From the interviews with more than 50 marketing leaders, we have learned that more than 40% of chief marketing officers (CMOs) admit that their brand loyalty programs underperform or produce erratic results, or they simply do not know how the programs are performing. The survey also shows that for most CMOs, loyalty marketing is often seen as a means to an end, not a strategy, and that their approach, while necessary, has unclear objectives and focuses too much on short-term financial goals.
Other key findings from the report:
- Marketers are primarily focused on customer acquisition (65%), increased brand awareness (40%), and marketing return on investment (39%), as opposed to initiatives addressing customer loyalty, such as increasing customer retention (31%) and customer lifetime value.
- The majority of respondents indicate that customer retention (79%) and revenue growth (53%) are the key metrics used by senior management to evaluate loyalty marketing initiatives, as opposed to Net Promoter Score (24%) and customer satisfaction (24%).
- Lack of differentiation (91%) and promotional clutter (73%) are seen as the main reasons why loyalty initiatives are often not delivering the goods. For more than half of the respondents, loyalty marketing initiatives are not aligned with the brand they are promoting.
The call we make in the report is that the time is right for marketers to make loyalty marketing a key component of their brand strategy and a key enabler of compelling and consistent brand experience. To reap all of the benefits from their brand loyalty strategy, senior marketers must make sure that they define compelling customer value at each stage of the customer life cycle and get top management buy-in to activate all departments around the brand loyalty strategy goals.
What do you think?