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Customer loyalty programmes are a tried and tested way to build a following, but if you’re just starting out should you do it in house, or join an established provider?
December 29, 2010 4:40 by Sidra Tariq
Businesses go to great lengths to understand customers and increase sales. They conduct market research, develop promotions and strive toward improved customer service.
And aside from incurring costs associated with these, a few look at loyalty programmes as an option to build relationships with customers and encourage repeat purchase. Loyalty programmes can also be a basis for building a customer database and getting insight into their shopping patterns.
In order to take advantage of this pool of information, businesses have to make an investment decision, which leads them to the age-old debate: develop the program in-house, or opt for a third party operator.?
While we have third party operators in the region like Air Miles Middle East, the regional arm of one of the largest coalition loyalty programs in the world, we also have the likes of Emirates Airlines that have developed an in house loyalty/frequent flyer program, Skywards.
“Developing (programs) in-house is the way Emirates usually operates,” says Brian LaBelle, senior vice president at Skywards. ”The benefit (of developing an in-house loyalty program) is that you understand the business a lot better, you grow your knowledge over time, and you can control and develop the product a lot better as well.”
“You control the way the product is communicated and marketed, as well as communication with members, which is very important to get right,” he adds. “If you do that yourself, with your own people in your own service centers, then you can be sure of getting the right results.”
Ralph Browning from Carlson Marketing, a marketing services company that designs relationship building programs, agrees that “the company knows their business better than the loyalty supplier does,” but points out that “the loyalty supplier can bring in specialist skills and experience that the company doesn’t have.”
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