We all know about them. Buy five, get one free punch cards. Reward cards that give you two percent of your total monthly purchases. Special email coupons on select items. Such loyalty programs are created both to thank customers and to entice them to buy more. Loyalty programs, especially in this tough economy, have gained popularity to the point where almost every business offers the consumer a reward or perk for repeat purchases (or even just offers permission to market).
But what about your channel partners? Do you have a good loyalty program that rewards them, better yet, thanks them, for doing business with you? Taking it to the extreme, do you use a loyalty program for your customers, who could in turn duplicate your efforts and use the same program for their customers? Why not consider a multi-tiered approach to your loyalty program?
However, the problem with some of these types of programs is that they only do half of what they are supposed to do. Loyalty programs are supposed to not only reward the customer, but also encourage them to do repeat business with you, which also helps build your success and bottom line. However, in a recent study by the Aberdeen Group, the results showed that around 65% of today’s retailers do not have an automated point of sale loyalty system. That means the little punch card isn’t doing much more than giving out a free cup of coffee. There is no way to collect important data like email addresses or contact information. As a result, communication with customers to thank them for their “loyalty” will be sparse and sporadic. The program works for the customer but not for the retailer.
Does the same thing happen to you? Are you building programs but have no way to collect important information about leads and customers? Do you have a massive program that is used with all of your customers because you don’t have the ability to segment your loyal customers from your B and C customers? Remember, it costs five to seven times more to find a new customer than it does to keep an existing one. By creating and nurturing relationships with existing customers, based on their needs, you ultimately increase your profitability, simply because they come back to you with your business time and time again.
Communicate with your customers. You must have a strategy for gathering information and using it to communicate effectively and efficiently with your buyers. More than 60% of clients switch to another VAR simply because there is no communication: they don’t feel their business is appreciated, so they are looking for someone who will make them feel appreciated. To develop and create a strong loyalty program, connect with your customers and find out what their needs are. Having contact information or an email is not enough. It is your job to identify your obstacles. What gives you problems in your business on a daily basis? What kind of solutions can you offer? Then base the basis of your program on what they tell you. Imagine if you provided a rewards program for a specialized service that your top customers might come to you for, even though your competitors offer the same service. With the rewards incentive, you would create a strong supply of users for that service. In return, your customers will see that you appreciate and reward their loyalty.
A two-tier approach. Consider creating a loyalty program for your customers, a turnkey plan that they could duplicate for their own customers. Be creative. What types of services and products do you offer that your customer enjoys? How can you develop a rewards program for those products that your customer can use? Remember, you want your customer to feel appreciated and to thank you for doing business with you. What better way to do that than to offer him a reward and then make him look like the good guy by offering the same program to his customers? Studies show that customers who belong to a loyalty program visit a business twice as much and buy even more than that.
Loyalty programs don’t just motivate customers; they also build and strengthen relationships. As you build your programs, think of ways to say “thank you” that will also drive incremental income to your bottom line. As you proactively move through this downturn, you’ll quickly understand why your existing customers are the most important factor in your future success. Isn’t it about time you rewarded them for that?
No Comment