Loyalty Management: Educate executives on value of program

Craig Underwood is president of Loyalty Management Group Canada, the company that manages the Air Miles Reward Program in Canada.This monthly column explores issues and provides practical information on obtaining the maximum benefit from customer loyalty programs and database marketing.The decision...

Craig Underwood is president of Loyalty Management Group Canada, the company that manages the Air Miles Reward Program in Canada.

This monthly column explores issues and provides practical information on obtaining the maximum benefit from customer loyalty programs and database marketing.

The decision to develop and launch a loyalty program requires a major commitment from the most senior management of your company for two simple reasons: 1) the program will interact with your best customers; 2) it will cost money.

How does a marketing executive secure the financial and executive commitment necessary to mount a loyalty program that will profitably change consumer behavior?

The most compelling way is to educate senior management on the economic value of a loyal customer.

Convincing argument

The marketing executive must make a convincing, economically quantifiable argument to demonstrate that all customers are not equal – that loyal customers are significantly more profitable than the average shopper.

The simplest way to make this case is to compare the annual contribution of an average customer against that of a loyal customer (i