Thursday, July 07, 2016

Is Loyalty Reward Program Still A Must Go In 2016?

I don't discuss as much as I should do about customer relationship management strategies lately. But the topic has evolved a lot those past few years. I remember, and you can read it if you go back in the archives of this blog, a solid customer relationship management program, around a strong loyalty cards, was one of the key strategy in the 2000s. It could help the customer boost its revenues per customers, defend its market shares and create real long term differentiation from the competition. 

But it has evolved a lot. Competition in the retail business is tougher than ever. 
  • Growth is limited, due to the aftermaths of the different financial crisis customers had to face.
  • Ecommerce is maturing, and took strong market shares.
  • New technologies have been able to trigger new shopping behavior, and changes the way standard loyalty reward programs could work.

Lately, some sources have talked about Mc Donald's potentially launching a loyalty reward program. Mc Donald's strategy is still unclear. It has struggled lately to find long term sources of growth, and loyalty reward program is an easy tool to retain customers.

But does it really make sense? I am not so sure any longer. Of course, companies that already have strong loyalty reward programs should capitalize on it. It has several key advantages:
  • Customers remain loyal, and you avoid them to go to the competition
  • You have clear data on purchases, that could help you make the right decisions in terms of category management (launching the proper promotion, or setting up your product range)

But in 2016, with big data, mobile technologies, and a competition that is getting more complexed than before, I believe we will see less and less standard loyalty card strategy coming up.