Thursday 30 October 2008

Why do (some) loyalty marketers throw out the rule book?

Traditional promotional marketing tends to use a combination of activities which includes "push" based techniques - whereby trade based promotions are utilised to encourage wholesalers and retailers to stock a product - as well as “pull” based techniques which use more above the line methods and consumer promotions to create demand.

When done right the combination of "pull" and "push" techniques can work very well to ensure the product is in the retailer for the consumer and that consumers are buying the product from the retailer.

Given that most marketers understand this it raises the question as to why so many loyalty programmes seem to throw the rules out of the window. Whether it's channel loyalty programmes that are used to reward intermediaries, employee incentive programmes rewarding sales, or consumer loyalty programmes rewarding purchasers - very rarely are these combined to maximise the effect.

I was quite pleased then when attending Loyalty World this year to actually see someone who is actively doing this. The new programme for GHD (blessed) is a very clever loyalty programme which essentially engages their sales channel (salons) in the programme (the “push”) along with engaging consumers through their online activities (the “pull”). Although the roll out is only small at the moment, the programme has a number of design features which make it very interesting.

GHD want customers to purchase their products which are stocked by salons and the salons would like repeat custom. By creating a programme which works for and incentivises both, it helps to ensure the programme is well promoted by the salon and the consumer is keen to take part. Key design characteristics such as surprise and delight mailings - which the consumer is notified about but has to pickup in-store - help to ensure that this symbiotic relationship continues to thrive.

However the real success is that - because it's one programme - the push and the pull work together, so the salon feels like consumers are genuinely interested and the consumer feels like the retailer is genuinely engaged – moving the conversation from selling to that holy grail of marketing... personal recommendation