Loyalty breeds success. Almost every business success story features loyal consumers, and while owners and CEOs drive a business forward, enthusiastic consumers are what ensure growth and longevity.
The customers who frequently visit, have above average basket size or spend, and make referrals are the ones who grow your business. Valuable products and reliable customer service encourage customer loyalty, no doubt, but in today’s saturated market a thoughtful loyalty program or branded currency strategy is essential. Great customers must be recognized.
To acknowledge these loyal shoppers, brands develop programs to reward and retain existing customers and recruit new ones. A healthy business plan engages customers giving them an incentive to choose their brand time and time again.
Introducing a loyalty program or branded currency can seem like a simple marketing initiative, but experience has shown Jenny Jeansonne, Director of Partnerships and Growth at Stockpile, that a well thought-out and expertly executed strategy is worth the groundwork.
Engage the experts
“Building a loyalty and gift card program is labor-intensive,” says Jeansonne. “If you don’t know what you’re doing the entire foundation will be wrong, and as your program grows, cracks will show up, and problems will snowball. I highly advise companies to hire industry experts who know exactly what to do because otherwise, it will cost them millions of dollars down the road.”
Before joining Stockpile, an online investment firm that sells gift cards for stock, Jeansonne had a long history in retail, branded currency and loyalty programs. She currently sits on the Board of Directors for theIncentive Gift Card Council (IGCC) and was previously on the Board of the Retail Gift Card Association (RGCA), adding to her wealth of experience. She has seen her share of success stories as well as ideas that flopped.
Know your customers
“The first step [when launching a loyalty program or branded currency] would be analyze all your customer segments to get a benchmark. You have to know where you’re starting from,” she advises. “Second step would be to research those segments of customers to figure out who your most valuable ones are and what incentivizes them. And then it’s test, trial, fail, repeat. I don’t know too many companies who did it right the first time out. What works for one segment of your consumers will not work for another set,” she warns. Her advice also includes examining why the program is being created, defining its purpose and determining a measurement of success.
And then it’s test, trial, fail, repeat.
“I recommend engaging industry experts. A company like Lightrail, whose niche is digital branded currencies, knows the industry and process so well and can streamline it at an efficient cost. Program developments should be enhancements for more engagement and interaction. They should never steer away from a company’s mission or objective.”
Pizza gets results
A strong program will appeal to various segments of patrons including other businesses. In addition to their customers, employers have another group of very loyal brand champions are in front of them every day - their employees. Employee engagement boosts workplace morale and in turn, profits and loyalty.
The Incentive Marketing Association states that the majority of American businesses choose gift cards as a reward tool. 61% of large companies are purchasing branded currency for an average of 2.4 different reward and recognition audiences, such as channel, sales, employees, and customers. Employees benefit from rewards or incentives in the same way customers do.
61% of large companies purchase branded currency for an average of 2.4 audiences
Jeansonne knows gift cards are a great way to strengthen workplace engagement while managing budgets at a corporate level. In a retail context, she explains, “corporate retailers might know that store employee moral needs to be at its highest level during the holidays to sell the most products, so they’ll say, ‘we’re giving everyone pizza on your lunch break.’ Instead of giving store managers cash or check, they get each store manager a gift card for a local pizza retailer. This is an example of controlled spend at a corporate level.
It is not just businesses using branded currency as a controlled budgeting tool. “Parents love to do this with their kids, especially high school and college,” explains Jeansonne. “Instead of giving them a debit or credit card, a parent gives their child $500 to a particular clothing retailer. They know that they can only go there and spend $500 on clothes instead of on pizza and beer.” Branded currency allow parents the ability to grant their children spending freedom but within the constraints of particular stores, products, and brands.
The original branded currency
A membership or branded currency purchase shows commitment, but the next level of customer loyalty is what many brands are striving for. “Stocks were the original branded currency,” says Jeansonne convincingly. “Stock owners are the most powerful segment of consumers a brand can have.”
83% of investors said their purchasing decisions are affected by the stock they own.
A customer who is also a shareholder in a business, sometimes referred to an investomer, is powerful. Their loyalty is stronger than non-equity holding consumers as they benefit from the dividend pay back of their purchases. A report by Bain & Company reveals that 83% of investors said their purchasing decisions are affected by the stock they own. The same study shared that investors spend 1.5 times as much money with a brand than non-investors and logged as many as three times the amount of customer referrals.
The future is branded
The Incentive Gift Card Council says that the recognition of diversity, in individuals and motivation, is key to the success of gift certificates and gift cards. Whether for products or services (or stocks), branded currency empowers the recipient to choose the return they desire most. Jeansonne confirms, “the industry volume and quantity has seen nonstop growth year after year. The gift card is the number one requested gift; you can’t go wrong with branded currency.”
The recognition of diversity, in individuals and motivation, is key to the success of branded currency.
Her outlook predicts a healthy future for branded currencies both as personal gifts, corporate incentives and, of course, for parents looking to influence the spending of their teenage children. “Every company wants to move towards a branded currency or loyalty program,” says Jeansonne. “I’m excited to see where this industry is going.”