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Do You Have More Chickens Or Pigs?

 




By: Ray Chelstowski / Hilton Barbour

You’ve likely heard the metaphor about the chicken and the pig discussing breakfast. The chicken says “I really like a classic bacon and eggs breakfast.” The pigs turns to the chicken and says “No doubt. You’re involved but I’m committed.”

Simply put, successfully managing (and growing) any membership program boils down to two key considerations: member acquisition and member churn. Even more simply put: Increase the former. Reduce the latter.

Put another way, do you have more (partially) involved chickens or more (fully) committed pigs?

As we discussed last week the most urgent challenge that most loyalty programs face today is churn. So, before customers cycle out of these programs engaging them is critical. Here’s why:

Engaged members stay 4 more years compared with non-engaged members.

Engaged members spend 22% more than non-engaged members.

Member engagement not only increases member loyalty, but also creates referrals.

Programs with a loyalty engagement plan increase membership renewals by 51%.


The more engaged members are the more loyal they become, and the more loyal members are, the longer they'll stay. That’s a virtuous, and endless, circle. The best way to achieve their commitment is by creating the kind of value customers can only discover through you. One way to do that is through collaborative commerce. With collaborative commerce, brands enter into a strategic collaboration with other non-competitive businesses. Businesses that share a common business outcome – say retention – share common audiences but seek to bring new, different rewards to the table. At Kognitiv, we have seen these collaborations – these partnerships - become even more compelling when they put the consumer’s interests ahead of traditional alignments that a brand might consider relevant. These partnerships are developed through a review of shared data as opposed to intuition or industry alliances and connect more closely to the individual consumer’s wants or needs. Personally, I am a member of both the Nordstrom rewards program and Ace Hardware’s loyalty plan - two organizations that couldn’t be further apart in the minds of most consumers. However, the cumulative information they would have on me would allow them to create rewards and offers that no other stand-alone loyalty program could ever match. Now think about adding a third brand, or a fourth, or a fifth. Now consider the unique, unmatched rewards and programs you could unlock. And, because these occur on the Kognitiv PaaS platform, you can unlock and scale these partnerships faster than the months you’d historically need poring over legal contract fine-print.

If you want committed, versus casual involved, customers then you need to exceed the very high bar of relevance and uniqueness. The ability – and the agility – of collaborative commerce is a sure-fire way to unlock that capability.

ray.chelstowski@kognitiv.com

hilton.barbour@kognitiv.com

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