Marketers worldwide are increasingly looking to relationship marketing, CRM strategies and loyalty programs to improve customer retention and value, teach them about what motivates their prospects, and help them keep communications targeted and focused, according to data from the CMO Council.

However, consumers need personal value to participate and are looking for an incentive to join such programs, and unsurprisingly their biggest draw was financial. More than one-half of Web users also said they would be encouraged to join rewards programs in return for offers and deals that were more relevant to them personally.

On the flip side, Web users’ biggest concern about joining loyalty programs was spam. Marketers also worried club members would find little value added by joining and not enough personalized attention.

More than one-half of marketers told the CMO Council they were using loyalty programs to help acquire and keep higher-value customers. Nearly as many benefited from improved targeting and segmentation, reduced customer churn and the ability to drive repeat, higher-value business. But just 14.8% of marketers reported they were highly effective in leveraging their club members’ loyalty and brand preference.

“Without a deeper customer insight, marketers will be limited in their ability to do meaningful predictive modeling, market segmentation and revenue forecasting,” said Donovan Neale-May, executive director of the CMO Council, in a statement. “Better understanding of customer behaviors, predispositions, intentions and preferences enables more effective and relevant messaging.

“It is also an essential part of customer revenue optimization and lifetime value building,” Mr. Neale-May said.

(from emarketer.com, 1 February 2010)

Original article...