CMOs admit brand loyalty schemes underperform

More than a third (40%) of chief marketing officers are unhappy with the “erratic” performance of their brand loyalty programs, according to a report by Forrester.

Loyalty Cards
Loyalty cards from Tesco, Sainsbury’s and Boots

The research, which surveyed over 50 global marketing leaders, also found that a further 9% were unsure of their loyalty program’s contribution to the business.

Marketers told Forrester that loyalty marketing often has unclear objectives and focuses too much on short-term financial goals.

Lack of differentiation, over-optimistic goals and targeting the same customer base with too many offers were cited as the main reasons why loyalty initiatives fail to live up to expectations.

Over half of respondents say loyalty marketing initiatives are not in sync with the brand.

The report, A New Approach To Brand Loyalty, also found that 79% of CMOs think customer retention is the key metric used by senior management to evaluate loyalty marketing initiatives, followed by revenue growth and customer engagement.

Luca Paderni, report author and Forrester CMO analyst, says the marketers must adopt a different approach when it comes to loyalty programs.

“To reap all of the benefits from their brand loyalty strategy, senior marketers must make sure that they define compelling customer value at each stage of the customer life cycle and get top management buy-in to activate all departments around the brand loyalty strategy goals,” he says.

Other key findings in the report show that 65% of CMOs believe the top priority in their role is to acquire new customers. This was followed by increasing brand awareness and improving marketing return on investment.

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