Loyalty 360: A Holistic Approach to Customer Engagement
As part of the Enterprise Engagement Alliance’s commitment to an open-source approach to information sharing on the implementation steps for stakeholder management, this begins an ongoing series featuring specific chapters in the EEA’s two books, Enterprise Engagement: The Roadmap 5th edition, by Bruce Bolger, Allan Schweyer, and Richard Kern, and Enterprise Engagement for CEOs, by Bruce Bolger.Click here for links to RRN Preferred Solution Providers.
Enterprise Engagement: The Roadmap is the guidebook for any organization seeking to implement the “Social” of Environmental, Social, Governance (ESG) management, increasingly known as Stakeholder Capitalism. It is designed for any management in charge of making the shift toward a stakeholder approach to management and value creation.
The book is included with the EEA PurposePoint Academy membership library or can be purchased online.
This is an excerpt from Chapter 22, Loyalty. Select chapters will be featured in the coming weeks and throughout the year.
Click here for the complete chapter.
Of all the traditional tactics undergoing major change in the new world of engagement, traditional loyalty programs are among the most notable. Reinvigorated in the 1980s by the travel industry after the near death of trading stamps in the early 1970s – and given a further shot in the arm by the advent of gift cards, the Internet and social media – many loyalty programs remain built on the traditional “do-this, get-that” model that fails to address all of the issues research shows are related to engagement and performance.
In truth, many traditional loyalty programs are based on the premise of providing people rewards for specific behaviors and then making it either difficult for people to redeem those rewards or deliberately playing down the ways to redeem rewards in order to create “breakage” – the cost savings or extra profit margin that comes from people not actually using the rewards. Breakage is the same model that underlies many traditional rebates. The issuers hope that people will be motivated enough by the incentives to buy, but not sufficiently motivated to redeem. This is a model well-suited to process-oriented, rather than people-focused, management.
The breakage model makes sense in the context that loyalty programs primarily have evolved into database-marketing tools in which organizations induce people to opt-in to receive information and/or have their purchases tracked. So organizations win even if the person isn’t particularly loyal by at least getting permission to communicate or the ability to gather valuable purchase data.
Supported by extensive research and increasingly reaffirmed by big data, Enterprise Engagement takes a longer view of customer relationships and therefore builds loyalty based not only on promoting rewards and encouraging people to use them, but also by addressing all of the other aspects that research tells us engages people – emotional connection, trust, a sense of feeling valued, fun, capability (the ability to do what is being asked of us) and the consistent fulfillment (or even exceeding) of expectations.
Over the years, research has remained inconclusive related to the long-range impact of loyalty programs that focus primarily on rewards. According to a 2012 Hanover Research report on consumer loyalty programs, “an analysis of overall research shows that the connection between participation and enduring loyalty is unclear…the data do not indicate that all companies benefit from having a consumer loyalty program.”
In a 2011 Gallup Report, Making Loyalty Programs Work, Jordan Katz, a managing consultant at Gallup, noted that “Across all industries, companies spend two billion...
Click here for the complete chapter.
The book is included with the EEA PurposePoint Academy membership library or can be purchased online.
How RRN and Brand Media Coalition: Your Partner in Success in Incentives, Rewards, and Recognition
Published by the Enterprise Engagement Alliance at TheEEA.org
- The only weekly news, how-to and resource publication of record for the Incentive, Rewards, and Recognition field.
- The only marketing agency focusing specifically on the IRR and broader engagement marketplace.
The Industry’s Only Combined Media Platform and Marketing Agency to Help You Expand Your Business 
- All the industry news, research, announcements, and how-to articles read by over 20,000 end-users in sales, marketing, and human resources; incentive, recognition, loyalty and promotional companies, as well as marketing and human resources agencies, seeking to enhance performance through effectively designed incentive programs.
- Unparalleled business development services for engagement, incentive and incentive travel, recognition firms; brands, gift cards and master fulfillment companies, and technology firms, featuring ROI-based business development strategy design and ongoing digital and social media and e-newsletter communications to help marketers profit in the coming era of cookie-less marketing.
- Unique abilities for solution providers to sponsor authoritative, evergreen content directly related to what they sell through the EEA’s Effective Practices series on articles in our media platforms.
- EEA YouTube Channel with over three dozen how-to and insight videos and growing with nearly 100 expert guests.
- Access to new technologies from EEA preferred solution providers enabling brands to create their own points-based or transactional redemption site.
- Unparalleled expertise in program design, return on investment measurement, reporting, and prescriptive analytics.
