Aligning Customer Loyalty With Business Strategy by Peppers & Rogers Print

Read the full reportLoyalty programs are at their core tactical mechanisms for altering the behaviors of specific customers. The behaviors you most want, however, might be quite different, depending on your business model and competitive situation. If you can’t now identify your customers across channels or stores or business units, a loyalty program can help you do that. If you can track your customers individually, but you have little opportunity to interact with them, a loyalty program can provide more opportunities to do that.

On the other hand, if you already have the mechanisms to build and manage individual, highly interactive customer relationships, then you should think very seriously about just what it is you need to get from a loyalty program. An online or direct-to-consumer business with a unique product or a distinctive brand may be better off relying on its real-world business model to coach customers into more profitable and engaging behaviors.

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