Customer Loyalty Programs – They Really Work!

May 23, 2014 - PRLog -- How many times have you returned to a business because you had a “frequent customer” card and were on your way to earning rewards?

I’m not a betting person but, if I were, I would bet that each of you has at least one customer loyalty card either on your keychain or in your wallet. That business is letting you know you are a valued customer and thanking you for your time, effort and spending habits. From a consumer perspective, you believe you get some benefits – whether it’s a discount, special offer or some other type of reward – by using the card.

In other words – customer loyalty programs work! And not just for department and drug stores, gas and food store chains and cruise lines. Loyalty programs can be just as effective for mom-and-pops and local businesses.

Developing a loyalty program is not rocket science but it is a necessary investment in your business. After all, “loyal” customers visit the brand/site/store more, spend more often and can generate new customers through face-to-face or Internet “word of mouth.”

The program doesn’t have to be complex or costly (there are numerous free or low-cost tools now available) and you don’t need a computer whiz to manage the program. Logistically, there are several ways to approach a customer loyalty program. I would recommend starting with a registration/sign-up form. That way you can keep track of your customers’ activities while developing a data base that can be used for future promotions (we will deal with the digital side of loyalty programs in greater depth in a future blog).

When launching a program, keep in mind the following factors:

Keep it simple: The simpler the loyalty program is, the easier it will be for your customers to latch onto and the easier it will be for you to administer. Give your customers something to shoot for, perhaps by earning “points” to advance through levels/tiers/steps to qualify for special discounts, services or bonuses. The points can be based on number of visits, dollars spent or by specific products purchased.
Give your customers something to shoot for, perhaps by earning “points” to advance through levels/tiers/steps to qualify for special discounts, services or bonuses.
Appropriateness: The rewards have to be appropriate for your business and for your customers – it has to be something they would like to have.
Give them a reason to come back: You don’t have to give away the ranch but it should be significant enough that it makes it worth their while to come back. Percentages or dollars off, gifts with purchase (how about that “free” turkey at Thanksgiving?) and BOGO (buy one, get one free or half off) are good examples.
Once a customer loyalty program is in place, don’t forget about it; it needs ongoing care. Now that you’ve made some initial connections with your customers, your focus should be on finding ways to continue and even expand that level of connection through various forms of ongoing customer communication.

Taking the time to develop an appropriate loyalty plan is well worth the time, money and effort. It lets the customer know they are valued and is the cornerstone of a solid and effective company-wide customer service approach.