Overcoming barriers to loyalty programs

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Spencer Hapoienu, co-founder and president of New York database marketing agency, Insight Out of Chaos, maintains that for loyalty marketing to succeed, three things must happen:

CRM at center: Customer relationship management must become a platform of the entire business. "You use the data to drive everything-your marketing, merchandising and packaging decisions," he says.

No fear of change: "Managers are afraid of making massive changes in the ways their companies do things and of the costs involved. A loyalty orientation requires some new systems and a whole new structure. To flip from an 80/20 ratio of spending on conventional marketing to a 20/80 spending ratio favoring loyalty marketing requires a great deal of organizational change."

Continuity: "The lack of stability in marketing makes it difficult for CMOs to feel comfortable committing to long-term change." Leave the loyalty programs alone.
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