Mercator Perspectives

Design Your Loyalty and Instant Offers to Avoid Offer Fatigue

Today shoppers, credit card users, and virtually everyone else making a payment is bombarded by offers to tempt them into another purchase. Electronic forms of communication including the Internet, smartphones, and kiosks can leave anyone asking themselves “Can I just finish this please?”

While it is great to be able to target offers to likely customers that are so specific they can be reached based on where they are walking, marketing and program managers run the risk of becoming the pushy salesman that causes a customer to go somewhere else. While they sometimes work in the short run, no one likes to be the subject of high pressure sales tactics. If my smartphone buzzes every single time I walk past your store, I’m going to cross the street in the future.

So how do marketers and program managers avoid this trap? Three factors need to be combined in program design: the strategic goal, the customer experience, and the feedback from the program.

The strategic goal in most programs is to drive increased sales. It seems obvious enough, but not all sales are equal. Also, the time and place of those sales matters. The goal then should be specific enough that the program can be designed to meet that. For instance, if you want to increase sales in a particular coffee shop in the mid-afternoon on Tuesdays, then you want to send out offers for that location at that time, not just a generic coupon that pops up every time someone goes to an ATM of a partner bank.

Second, think about the design of an offer from the customer’s perspective. People often want to get offers and discounts, but we all have times when we have more mental bandwidth to consider these offers. In looking at the traffic at a financial institution’s ATMs, for example, speeding customers through at busy times may take precedence over presenting them with an offer for a free doughnut. By the same token, if our coffee shop above is mobbed, then it may want to avoid sending out more offers when its staff and inventory are on the verge of being overwhelmed. Overall customer satisfaction should be taken into account in program design. So timing the offer from an internal perspective can be just as important as timing it to reach a customer as they walk past the door.

Third, programs should be tested, tweaked and monitored based on the feedback that comes in from both customers and sales numbers. Customers may say they really like a particular offer, but if the sales figures show few or no redemptions, then it is time to try something else. Alternately, customers may say they hate their phones going off every time they walk past the door, but if they always walk in and buy something, then maybe the idea is more irksome than the reality. If offers sent at 9:30 a.m. Monday lead to more sales on Tuesday at 2 p.m. than offers sent at 1:30 p.m. on Tuesday, then a program manager can stop randomly tossing ads onto the networks and inside time them.

The technology that enables targeted and real time offers should be pushed to its very limits to make sure that what looks ‘targeted’ is not merely a random flyer in a new channel.

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