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How is CRM a concept beyond Frequency and Loyalty Programs?

CRM a concept beyond Frequency and Loyalty Programs

Both CRM and Frequency & Loyalty Programs are created with a view to gain customer’s trust and confidence on your brand. Most often, activities to increase Customer Relationship become nothing more than a loyalty or frequency program. Product based companies, Hotels, Multi brand outlets, Airlines, credit cards, and supermarkets all have extensive loyalty marketing programs. Most often, organizations design their loyalty programs based on bonus, clubs, next purchase discounts, vouchers or points.

There is nothing wrong with these programs! However, the problem is that most consumers belong to a number of such frequent shopper, frequent buyer and other frequent flier programs and don’t see any differentiation among them. So invariably, frequency and loyalty programs are not CRM.

We must understand that frequency programs reward customers for their purchases. Hence, the more a customer purchases, the more number of points he earns and the greater is the reward.

Loyalty programs capture a lot of customer data. This captured data is used for additional programs and processes, which leads to greater customer loyalty. Most often, organizations make a mistake and confine loyalty programs to a series of tactics such as e-mails, direct mail, etc. It is proven that, consumers simply don’t see the value, even as their wallets are filled with loyalty cards.

Read: How to deliver good customer service? What customer service factors should a business improve

CRM as a concept is to create a deeper and stronger bond with the customer and the goals are different.

The Customer Relationship Management initiative is designed to effectively and efficiently use information to segment customers based on profit, value, events, etc. A loyalty program must be integrated with the organization’s CRM initiatives. However, CRM is much more.

Most loyalty programs send out monthly communications and every member receives the same newsletter. The best practice is to use the CRM system’s analytical capabilities that uses past-purchase behaviour to trigger targeted e-mails to customers.

Customer’s preferences, purchase history, geo locations, purchase behaviour, references, seasons and needs will be analysed and targeted campaigns will then be triggered. This increases the conversion ratios and the brands understand the abilities of the business. Most often customers buy from large organizations because of their ability to handle multiple activities and established systems. Smaller organizations can achieve this with effective CRM processes.

Naga Darshan J
Darshan is a CRM Strategist, Entrepreneur, Author and Business Coach. He heads the sales and marketing for Rapid GPRS and has been instrumental in transformation of several businesses.

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