What: Loyalty programs and why they are so often ineffective.
Who: Kevin Hillstrom, president of MineThatData took a look at what are the key elements to making a loyalty program work in this blog post.
Why Don't They Work? Because marketers are not focusing on the customer behavior that is tied to the loyalty program.Instead they think if there is a loyalty program customers will automatically participate.
How Can They Work? Under these conditions, Hillstrom says:
- An annual repurchase rate of 60% or greater.
- Customer places five or more orders per year.
And That Is Because …."If a customer has a 35% annual repurchase rate, and only purchases 1.3 times per year, there's very little incentive for the customer to buy more - the customer simply doesn't have a need to buy more often."
