20. Traditional Loyalty This model spells financial disaster. The more points users accrue, the more redemptions you will be faced with and the more costs you will have to outlay eroding your revenue from sale. + = Earn Points Spend Points Buy Product Save Points Spend on Catalog of Awards
21. Where the REAL problem Traditional Loyalty is! The real problem is not in the “purchase and receive points” aspect of loyalty. The true problem is how we allow consumers to spend their points. Traditional Loyalty fails to burn off points on non-costly benefits to the consumer. The problem is that they ONLY offer 1 spend mechanic + = Buy Product Save Points Spend on Catalog of Awards
22. Marketing ANNOUNCING Marketing such as emails, websites, banner ads, magazines, radio, print, direct mail ALL fail to help a loyalty program achieve its objectives of “Loyalty”. They merely ANNOUNCE the program but do not ACTIVATE it! If your marketing is only telling consumers to purchase product for a chance to earn points and what wonderful things they could earn. Then it is FAILING at being the most effective tool in driving ACTIVATION This is not a good enough return on investment. Marketing Material sent Received by Consumer .05% to 2.5% response Rate
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24. Heavy weighting is put on product purchase for points accumulation, which will increase purchase cycles along with adding more value and usage of items like Wish List and email reminders. Each marketing material will work harder and have an increase in success in driving receiver to the Loyalty Program. Marketing ACTIVATION Marketing Material sent Received by Consumer 5% to 15% response Rate
More people participating as more people are interested in taking a chance of winning what they can no longer afford and to pull them out of malaise of the poor economic news More people seeking to game a contest/sweeps, etc.
Examples of Things that have gone horribly wrong with various promotions run by other companies Headlines Screen Shots or Examples of Promotions that are improperly run – launched too early, etc.