Ask Leanne Papaioannou what loyalty marketing is all about and she immediately fires back an answer. For gaining and maintaining customers, a strategy relies on customer insights, commercial viability and board buy-in. The first two principles speak for themselves, but without access to top management, hopes of creating a loyalty programme which can help define the company will amount to zilch.

A Forbes Insights report shows that marketers’ main focus is customers. When asked what the most important priority in business for them was, 52 per cent cited customer retention, 38 per cent voted for customer retention and 29 per cent for customer profitability. The report said these will remain the top priorities a year from now.

Marketing budgets mirror these priorities, with four in ten executives allocating the biggest chunk of their funds to customer retention, with customer acquisition running a close second on 36 per cent. Looking ahead to next year, retention and acquisition will remain strong as over half of the 321 executives plan to up spend across the board.

Strictly speaking, Papaioannou (a Greek name pronounced ‘pappa-yoo-anoo’) regards herself as a commercial operator more than a marketer. Born in Harare, the capital of Zimbabwe, she moved to South Africa and grew up in Johannesburg. She spent three years working in HR in England before returning to South Africa where she go her first experience of loyalty programme working on Holidays Inns and a top pharmacy chain.

Just over ten years ago she came to Ireland and decided to stay. “I didn’t know a sinner,” she says with a broad smile that conjures up thoughts of Sarah Palin. “Everyone here seemed to be so well-connected, but with hard work and passion I’ve managed to build a business.” She chose Chilli Pepper to stand out from the crowd with “hot ideas”.

There are some prime examples of loyalty ideas overseas. She has high regard for what British Airways does for its customers. To improve their blue, silver and gold offering and make it more current, the airline updated their programme to include a new tier. Bronze now follows blue allows passengers priority queuing and extra services.

Lego used their customers to test their product. They sent them out Lego pieces and asked them to build something. They photographed the brick works and invited customers to vote on what entries impressed most. The best creations were marketed as limited editions. Instead of a card, Lego’s Richard Stollery offers his business contacts a tiny blue and yellow Lego man with his name on one side and contact details on the back.

Effervescent and confident, without being overpowering, Papaioannou quotes an agency boss whose clients include major retailers. Nothing convinces a CEO more than clear evidence of returns and positive financial outcomes. Data’s role is no longer just about confirming or refuting marketing decisions, it is increasingly driving those decisions.

Crucial to a company’s success are its loyal customers who evangelise for the brand on social media. But a Twitter account and Facebook page is not enough. Mobiles are blurring the lines between online and offline integration. Retailers must improve technologies to allow customers engage online as part of the in-store experience.

A frequent conference speaker, Papaioannou is shy when it comes to naming clients. As she provides a service which equates to stealth marketing, divulging brand names makes no sense. But she is happy to mention An Post, Arnotts, Bank of Ireland Global Markets, Coty and the Niall Mellon Township Trust as brands which she has worked with closely.

Fair to say, her expertise extends to household names in financial services, telcos, supermarkets, energy providers, HR and real estate. Her commercial nous allows her access to boardrooms. For her business model to be cost effective, she links up with strategic partners that provide research, below the line and online capabilities.

Papaioannou attended the recent Interactive Direct Marketing Association (IDMA) annual conference. She was impressed by the talks on the day, especially with what Gary Brown of the DDFH&B Group and Eason’s David Field had to say. In his intro, conference chairman Brown differentiated between buying and selling loyalty.

While buying loyalty is easy, it is simply a transaction between the business and the customer. Selling loyalty to management and employees is much trickier. To help make his point, Brown referred to the blind loyalty shown to former taoisigh Charles Haughey and Bertie Ahern, even after their actions had led the country to economic ruin. Despite their exploits, many like-minded politicians are still admired by loyal supporters; Brown’s point being that, in the long run, loyalty cannot be bought, it has to be earned.

A good analogy would be if someone meets a person at a party who starts talking about himself or herself. Later you think, I met this really boring person last night. But if you meet someone and they ask things about you, you would probably say that was “a really interesting person I met last night”. The scene translates into the world of marketing.

When it comes to loyalty programmes, they need to be more than just transactional. Bought loyalty is a short-term gain, in contrast with earned loyalty. It is more about attitude, than strategy. Marketers must transform their customer base into a fan base.
“Loyalty is difficult,” the no-nonsense Brown said. “You have to earn it. You can’t buy it. It’s a little like a relationship. You have to work on a relationship… with your friends, with your family. You’re going to have ups and downs. You’re going to disappoint people sometimes, but you have to be able to bounce back and deliver more and more.”

It begs the question, isn’t all marketing blind loyalty? Most marketers want to be good at their job and be successful, even if they do not believe 100 per cent in the brand they handle. “I don’t think all marketers are committed.” Brown added. “There’s a difference between being involved and being committed. We’re all asked to do things we don’t believe in from time to time. An architect might be asked to design a building they don’t really believe in. It works across the board, in every sector.”’

Consumers are more cynical these days and that makes it more difficult to engage them. Once people think they are being marketed to, they switch off. You have to involve them in a novel and entertaining way. The engagement must suit the brand. Brown singled out the banks for mention here – “banks don’t have customers, they have hostages”.

To succeed with loyalty programmes, Brown wants marketers to shift the focus from rewards to brand advocacy. To do this, companies must engage in constant dialogue. Start with a welcome pack, keep in touch with customers, support them when they have problems and keep things relevant. Treat bigger spending customers better, give them more time. Encourage the big spenders to stay and surprise them from time to time.

“Do this and you’ll create long-term, loyal bonds with customers,” Brown said. “There are plenty of examples. Look at Aer Lingus and then look at their competitors, Ryanair. It’s not hard to see the difference.” He finished his speech with a quote about one of his favourite all-time bands: “The Beatles were right. Money can’t buy you love.”

David Field, group head of marketing and retail development at Eason, spoke about brand advocacy in any retention campaign and reawakening customer loyalty. Eason took on the might of online behemoth Amazon and they did this by integrating staff in their plans, something which Papaioannou says companies have a tendency to overlook.

Eason had a huge advantage, namely the goodwill of a sizeable customer base. The brand is seen as being quintessentially Irish and is widely trusted, an attribute they tapped into with their loyalty programme. It meant understanding how the market and the needs of a typical customer had changed by gaining in-depth consumer insights.

The brand had lost relevance with consumers, especially younger customers migrating to online retailers. Field said the solution was three-fold: provide more product variety, enhance the customer experience and build the digital side of the business. There was a need to get away from the old view of Eason’s as a shop you went to buy communion cards and photo frames. There was a need to reconnect with consumers in line with modern day Ireland, rather than sitting on their laurels and looking back at past glories.

Field rolled out an integrated campaign, at the centre of which was its ‘Thank you’ loyalty card. Eason made the most of its brick-and-mortar presence too. In-store areas were made more appealing, welcoming and interactive. Stores in high profile locations were used as an advertising medium with shop windows, displays and wraparounds.

What did Field learn from the campaign? Listen to the consumer, keep it simple and use your data. Papaioannou finishes with a warning to marketers. A high rate of customer satisfaction does not automatically mean a company enjoys high levels of loyal customers that are brand advocates, who would not think about taking their business elsewhere.

Studies have shown that many customers who switch are either “satisfied” or “very satisfied” with the previous brand. So while customer satisfaction is an important metric for businesses, it does not define loyalty. To drive loyalty, marketers should focus on building strong emotional relationships with valuable customers and generate advocacy.

In an interview with Michael Cullen