Personalized Rewards, Maximum Return
When you look at your customer base, you're sure to find an increasingly diverse mix of age, ethnic, racial, or social groups--each with its own preferences, values, and interests. If the offerings in your rewards program do not reflect this diversity, it's time to roll up your sleeves and get busy.
Think about it:
A recent study by the Administration on Aging reports the number of Americans aged 65 and older is expected to increase 17 percent from 1995 to 2010, and 75 percent by 2030, to over 69 million people. In fact, the fastest growing segment of the population is those age 85 and over.
According to the 2000 U.S. Census, the combined buying power of ethnic consumers in the U.S. tops $1 trillion. By 2030, one third of the U.S. population will be Hispanic (19 percent), African-American (13 percent), or Asian American/Indian (7 percent); and by 2050, minorities will represent close to half of our population, up from 29 percent in 2000.
The average age of a millionaire is 44; in 2000, more than 200,000 women in the U.S. had a net worth exceeding $1 million.
A one-size-fits-all approach to customer loyalty cannot be effective. Loyalty programs and their growing set of award offerings have been around for years. While at one point gift certificates, airline tickets, and electronic gadgets had been shown to have broad appeal, customers have grown bored with the sameness of loyalty programs. What ignites their emotions (and loyalty) are awards that appeal to their dreams and desires--personalized experiences that relate to their age, lifestyle, and culture and provide them with lasting memories. Customers choose the rewards that are most meaningful to them, thereby promoting redemption and strengthening the bond between your customers and your company.
Concierge brings personalization
Concierge providers allow leading brands to offer their customers an amazingly broad array of experiences. Because of the very personal nature of these interactions (e.g., planning the perfect spa vacation, making arrangements for a night on the town) virtually every one of them is an opportunity for that company to deliver a brand-enhancing experience.
For example, because there's nothing more important to a Hispanic grandmother than her family, she can use her accrued points to purchase personalized jewelry featuring children's names or birthstones, or sketches made from family photographs and beautifully framed. Seniors who are traveling the globe during their retirement years, but who are unable or unwilling to carry 50-plus pounds of baggage, have been know to call upon their rewards program's concierge to make arrangements to have their luggage delivered to their destinations. And, one credit card company recently announced a new reward program that is targeted specifically to adventure-seeking NASCAR fans in which points can be redeemed for once-in-a-lifetime NASCAR experiences.
But do these services truly create business value? The answer is a resounding yes! Some companies have seen over 30 percent increases in customer spend levels and up to 50 percent reduction in attrition levels for concierge users. In fact, in controlled tests some companies have even found that simply offering concierge services as part of the loyalty package drove increased spend levels of 10 to 20 percent, even for those customers who never took advantage of the service.
Concierge services also offer another very powerful benefit--incredibly powerful insight and information that can be used to drive a company's one-to-one marketing efforts. Many concierge interactions are so personal that they offer a great opportunity to capture customer information that can't be captured in any other way. Individual life stage information, hobbies and personal passions, important dates and personal influences, and business needs are all revealed during these interactions.
By offering customers the ability to choose their own rewards--to create experiences that embrace their age, culture and lifestyle--you are giving them the opportunity to create personal and lasting memories. Each time the customer looks back on the experience, he will relive the emotion of the award and appreciate the company that gave it to him, strengthening his bond with the company.
About the Author
Janet Kraus is CEO and cofounder, in 1997, of Circles, and drives the company's vision and strategy. Her strong understanding of the value of loyalty and relationship marketing has made Circles a leading provider of concierge and personal assistance services, and has guided Circles through a 100 percent increase in revenue over the past two years. Circles received the Greater Boston Chamber of Commerce Small Business of the Year award for 2003. While receiving an MBA at Stanford's Graduate School of Business, Janet spearheaded the financing and building of the first multimedia center with access to the Internet. Janet received her BA from Yale University. She can be reached at www.circles.com