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Brand Marketers Are Planning to Increase Spend and Tech Investment in Loyalty Programs, Diversify Strategy

Brand engagement, Brand Innovators, Brand loyalty, brand marketers, CrowdTwist, digital consumers, loyalty program budgets, loyalty programs, Marketing, marketing channels, marketing data, marketing tactics, multichannel programs, Pr, Public relationsMarketers are faced with a complex system of channels, data and tactics when faced with keeping today’s digital consumers loyal. A new study from loyalty and engagement solutions firm CrowdTwist and brand marketer organization Brand Innovators reveals that technical and financial issues are the main barriers to generating optimum results from loyalty programs.

The report provides a deep look into the loyalty landscape. Overall, it indicates that focus and spend on loyalty will surge, with 57 percent of brands indicating that they will increase loyalty program budgets in 2017. However, marketers still feel they lack the resources needed to develop and deploy sophisticated, multichannel programs.

Additional findings from the research:

Brand marketers see layers of value in loyalty programs. Interestingly, 38 percent of brands do not deem their current loyalty efforts as either a success or failure, indicating that they are still searching for the most effective loyalty marketing strategy. Even the 26 percent of respondents that do not have formal loyalty programs indicated they are using informal methods to encourage loyalty. The majority of respondents value both the engagement and transactional ROI of loyalty campaigns. In fact, 31 percent of all respondents ranked “driving engagement” as the main focus of their loyalty program.

Marketers recognize that loyalty programs have to be multichannel to be effective. Multichannel is an increasing area of focus, with 88 percent of respondents saying executing coordinated campaigns across channels is an important activity relevant to loyalty efforts. Of all strategies, multichannel integration of consumer data is increasingly a “must,” not a “nice to have,” as consumer journeys have become more and more fragmented across devices and channels. Limiting channels prohibits the amount of data collected and utilized, as well as the impact of the program’s effectiveness in engaging and riving spend.

The most successful loyalty programs have multiple layers of distribution and reward. A whopping 88 percent of respondents with Multichannel loyalty programs rate themselves as success, yet  only 17 percent had such programs in place. Of that percentage, nearly all deem their tactics successful. In addition to reaching multiple channels, these programs also offer rewards beyond discounts, including brand experiences, free product, and special access. This allows brands to form stronger relationships with consumers, increase engagement and spend, and ultimately strike a balance between enticing new customers while keeping existing ones happy.

Brand marketers struggle to find a technology solution and manage data. Topping the hurdles was technological deployment/resources, followed by data management. Sixty-three percent of those surveyed cited the inability to perform data integration from disparate sources as the primary inhibitor of loyalty program adoption. In a related question, 53 percent ranked technical hurdles as bigger barriers to the success of current loyalty efforts than dollars allocated.

More than money, it is technical aspects that a majority of marketers feel hold them back from effective loyalty programs. However, financial muscle behind programs can allow brands to adopt effective platforms and software management systems.

Prediction: Marketers that increase spend on multichannel loyalty programs and work with third-party vendors will see increases in both consumer engagement and spend.

A best practice for brands is to not do all this heavy lifting on their own, but to seek help from relevant third parties, especially in the key areas of data integration and customer identity management, to help launch their efforts. Using an integrated system of software solutions, engaging content, calls-to-action, and a variety of rewards, coupled with an adequate budget will generate the largest ROI for consumer-facing companies in the long term.

Download the complete report here.

The firms surveyed 234 digital marketers at Fortune 500 brands over a one-month period from March to April 2016, to discover how their consumer interactions intersect with loyalty programs. Respondents ranged from vice presidents and senior executives to tactical directors and managers across a variety of industries. A majority of the respondents’ products are sold or presented to consumers via multiple channels.

Source: CrowdTwist; edited by Richard Carufel

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