Beyond Points and Thresholds: A Modern Approach to Customer Loyalty

As competition in the C-store market increases and new and more sophisticated ways to create market distinction become common practice, the challenge of fashioning a brand that engages the customer becomes more acute. The pace is so brisk, companies often find themselves at a loss when it comes to implementing this critical marketing strategy.

mark_johnsonLoyalty360™—the loyalty marketer’s association—describes itself as an “unbiased, market driven, voice of the customer focused clearinghouse and think-tank”. It is positioning itself as a resource to assist those in the C-store and other industries by making a wide variety of objective, quantifiable information available and by putting people in contact with brand experts and like-minded businesses that can provide advice and perspective on what it takes to create a brand that resonates with the consumer. The are somewhat distinct in that they do not directly consult with businesses.

We caught up with Mark Johnson, CEO and CMO of Loyalty360, and asked him to expand upon the new brand loyalty paradigms and how companies are adjusting to them.

SSCS: We’ve visited your website and have gotten a sense of what your organization is attempting to do, but I thought it might be helpful for our readers if you explain it in your own words.

Mark Johnson: We’re trying to consolidate a community committed to a specific model of customer loyalty, a concept which grows broader and more sweeping with each passing day. In the past, the conversation around customer loyalty was fairly narrow, centering on a rewards process that was contingent on point systems and thresholds.

We believe this conversation needs to be significantly broader and incorporate a more robust analysis of customer behavior. When you think about it, the typical points-based loyalty program is almost a one-size fits all approach. It fails to account for differences in demographics or habits or the simple unpredictability that makes us all human. To take all that into account you need more sophisticated tools and metrics that can change customer behaviors and influence the consumer to become an advocate of your brand.

SSCS: How can a customer-focused clearing house effect that kind of change?

MJ: It starts with getting a business to understand that the market is rapidly changing in profound new ways that diminish the effectiveness of old brand loyalty solutions. One way to get companies up to speed is to provide exposure to those who do branding and loyalty well. How do successful brands define customer loyalty? How do they define customer-centricity? How has that changed over time?

logo_loyalty360Another way to assist companies is to encourage exposure to the kinds of technologies and processes that have proven effective but may be new to a business. This would include such things as e-mail campaigns, social media strategies and the use of advanced metrics and examples of how and why they work in the market.

We want to facilitate that kind of information flow and networking. Loyalty markets need an independent, reputable resource that can provide hard, verified information on what works and what doesn’t, because the challenges can be overwhelming to those left to fend on their own.

SSCS: Can you elaborate on what you mean when you allude to “point based” loyalty programs?

MJ: In the case of an airline, it would be giving the customer a free ticket when they accumulate x amount of miles. Miles in that case are the points and the threshold is however many miles are needed for the rewards to kick in. The metrics in this kind of rewards model are almost always frequency of use or money spent. It’s a model that makes assumptions about standard human behavior and loyalty tendencies that aren’t very elastic.

To read part 2 of the interview, click here.