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Follow Coke's loyalty-building lead

Seth Sarelson
Follow Coke's loyalty-building lead Seth Sarelson

Different marketers have different needs: Some want to drive spend with third-party partners; some want consumers to spread the word about a product; and some just want to collect data. 


Loyalty programs can help all of these marketers meet their needs.


Most marketers believe that loyalty programs are just for driving spend. In reality, loyalty programs are about providing an incentive for a consumer to take an action: whatever you want that action to be. For many consumer brands, these loyalty programs are critical to getting the consumer to raise her hand and give some honest feedback.


Case in point: Every day, consumers use Coca-Cola's "My Coke Rewards" program to report on their purchasing and consumption behavior of Coke's products.


You might be asking: "What is Coke giving in return?"


Consumers simply get points that can be redeemed for different types of merchandise.


And how does Coke benefit?


Consumers register each individual product purchase and Coke builds a detailed profile on how much of each product a consumer purchases. Because the consumer is registering the individual product, Coke also knows where the consumer shops. 


This program is so much bigger than the grocery store loyalty card because it ties all of the consumer's purchases together and builds a complete picture of behavior by going to the source: the consumer. 


Coke now has the ability to individually profile each consumer and engage in one-to-one marketing by leveraging this data. 


Chances are, you don't have the same budget as Coca-Cola. This could be a blessing because it forces you to be a bit more resourceful. The truth is that small, web-savvy companies are embracing the loyalty program as a necessity to reinforce every action.


If you're thinking about starting a loyalty program for your brand, here are a few points to think about:


1.) Narrow your ask and pick one thing that you need
Are you looking to drive more spend? Do you want to collect more information for targeting marketing efforts? Maybe you want to reinforce viral marketing? Regardless of what you need, pick one big one and stick with it. 


2.) Figure out what the consumer wants from you
Is the consumer looking for a discount? A free sample? Perhaps the consumer just wants some recognition? 


3.) Find the right balance for your ROI
If you don't provide the proper incentive, you won't get what you need from the consumer. On the other hand, you don't want to go over budget. This is more of an art than a science, but leaning too far to one side or the other can spell disaster.


4.) Keep it simple
If you get too complicated with things like point conversions, you'll drive the consumer away. Nothing kills a loyalty program faster than confusion.


5.) Use your data to engage the consumer
If the consumer tells you intimate details about his purchasing decisions, don't just collect the data and say "thank you." If you actually do something beneficial that uses this data, make the consumer aware of it; he will be much more likely to engage in this type of conversation with you again. 


Remember, there really is an incredible online opportunity for every brand and every size budget. Follow Coke's lead and engage your customers. You won't be sorry.


Seth Sarelson is chief operating officer & co-founder of OnCard Marketing, a loyalty marketing solutions provider. .

Comments

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Commenter: Wendy Delgado

2007, August 15

Very good article! It has the exact points to introduce somebody new in the subject