CRM - June 2008 - (Page 22)

CUSTOMERS are spoiled—and they have every right to be. Most of them have very little allegiance to just one store or brand, especially when prices are so comparable. As a result, companies are turning to loyalty programs to keep customers coming back. Unfortunately, those programs have become almost as ubiquitous as the stores themselves. It’s not enough just to give your customer a plastic card that hangs off his key chain. Companies need to build loyalty based on intrinsic qualities before they can expect a reward to do any good. According to research firm Colloquy, U.S. membership in loyalty-rewards programs had reached a whopping 1.3 billion by the fourth quarter of 2006. Or, looking at it another way, the average American household belongs to 12 different loyalty programs. However, Colloquy’s study also found that, of the 12, only approximately 4.7 qualified as what the firm deemed “active participation.” “Loyalty cards are losing their power,” says Chris Cottle, vice president of enterprise feedback management provider Allegiance. In fact, he adds, there’s a certain extent of bribing that’s become a normal part of consumer expectations. All things being equal, a company with a loyalty program will most likely gain a slight advantage. But loyalty-reward programs aren’t a secret, nor are they difficult to execute. If you have one, more likely than not your competitors do, too. That hasn’t stopped some consumers from clamoring for more: On the recently launched MyStarbucksIdea.com (powered by Salesforce.com’s Salesforce Ideas platform), Starbucks customers have repeatedly listed (and voted for) loyalty cards as an offering they’d like to see. “Most of the local and chain vendors in our 22 CUSTOMER RELATIONSHIP MANAGEMENT | JUNE 2008 www.destinationCRM.com http://MyStarbucksIdea.com

Table of Contents Feed for the Digital Edition of CRM - June 2008

CRM - June 2008 Contents Front Office Reality Check Customer Centricity The Tipping Point Making Mashup Masterpieces Trouble in the Air CRM on Twitter Is SaaS Ready for Its Contact Center Close-up? CRM: In the Public Interest Required Reading Lollipop Loyalty Best Practices Series: CRM & eCommerce eGain NetSuite Infor Longwood Software Vovici The Second Coming of 2.0 Believe the Hype About Hosted Contact Centers All Talk So Hot It’s Cool Linksys Gets Shaken, a Community Is Stirred The Risky Risk Business Awana Hears a SaaS Sermon Secret of My Success Re:Tooling Scouting Report Pint of View

CRM - June 2008

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