In the words of the wise, the problem has and will always be choice. This is true not only in the individual and personal sense but also for businesses, especially in today’s environment where market conditions are more volatile than the most unstable chemical elements.
As many business owners would know and acknowledge, it is a lot more economical to hold on to the customers they have, than to acquire new ones. With intense completion, customers (across product and service types) have been bestowed with great many choices. With the internet fuelling information overload, it has become an even bigger challenge for businesses to invest in new tools and methods that would make them stand out in the crowd.
Customers now have the ability to not only ignore the product they deem unfit to their needs but also transmit their thoughts to others and word spreads a lot like wild fire. All it takes is a few lines of text to make or break a company now. This unfortunately works on existing customers too!
With patience disappearing into oblivion, it is left to the companies to come up with quicker and more magnetic ideas to safeguard the pool of customers they have and prevent them from scurrying over to the enemy camp. Quite a number of studies have indicated the effectiveness of customer loyalty programs in preventing them from switching brands, regardless of the size of the organization.
This finding though, is true only for those programs that have been drafted with great thought and after a good deal of research. If done right, these programs will not only aid in customer retention but also in new customer acquisition, understanding of preferences, new product ideation and quicker goal accomplishments. If you are looking at launching customer loyalty programs in the near future, here are some pointers on how to kick-start a potentially successful one.
1) Understanding your target audience
Before beginning this endeavor and spewing out reward programs, it is first vital to get a good hold of your target audience. The key to the success of any loyalty program lies in the detailed knowledge of customers including their demographics, current preference trends, their competitor knowledge and their motivational factors. It is also vital to know what they ‘need’ as opposed to what they ‘want’. From direct surveys to casual customer interactions through social media engagement, there are numerous ways in which this information can be obtained.
2) Know what YOU want
Every loyalty program should be a driving factor behind the accomplishment of a business goal. It is essential to preset the goals and business targets, be it in sales, customer retention, new customer acquisition or others, that need to be achieved as a result of this program and work towards drafting a goal monitoring strategy.
3) Be realistic
There is nothing wrong in reaching for the stars but it is also important to spend your time and resources on programs that actually fetch you results. This can only be made possible by setting short-term realistic goals for the programs. Setting such feasible targets will also help in effective monitoring of the process.
4) Formulate diverse avenues
Once you have clarity about what motivates your customers into investing their savings in any product or service, it is time to formulate different reward programs. It is also important to arrive at diverse loyalty programs with rewards that are both perceptible (free house-hold or personal products and cash rewards) and intangible like points, free classes, workshops etc, or even bumper rewards like trips.
Issuing individual identification reward cards will work wonders to improve participation. The idea is not just to attract the attention of your customers but also to build a strong and unique bond with them that will stand the test of time.
5) Novelty works
It would be quite tempting to go for time tested methods that have proven successful for your competitors or for your own company in the past but the question is, will that work always? Maybe not! – The main reason for this being, changing times and preferences of customers. The only way to get around this and ensure that your customers continue to invest their hard earned money in your company products is to make these loyalty programs as unique and novel as possible. Follow the trends and come up with distinct ideas that would be mutually beneficial to both sides.
6) Create appealing referral programs
Referrals are a great way to expand the customer pool. Since the trust and reliability factor is already established, it is much easier to strengthen the bond with the new customer thereby improving sales and retention. Not all customers will be motivated to spread the good word. It is therefore important to devise programs that will either monetize or provide intangible benefits to the referrer.
7) Market and publicize
What good is a program that is not known to exist? Ensure that your customers are well aware of the various loyalty programs that you offer and more importantly ensure that they are in the know about the numerous benefits they stand to accrue from those programs. Human memory cannot be trusted and it is necessary to reinforce this information at right times and in right frequencies (not too little for them to forget or not too much to scare them away) to ensure their participation.
8) Responsive sites
Let’s face it, this is the ‘fast and furious’ era. Everyone looks to complete a zillion tasks in a day and the last thing they want is a website that takes eternity to load or one that is unavailable or not navigable on the multitude of devices they use. It is vital to invest in creating sites that are reasonably rich content wise, pleasant to view, easy to navigate and exceptionally responsive on all devices.
9) Keep in touch
The key to any successful relationship is communication. Without regular and well strategized communication via e-mail campaigns, apps, social media etc, the reward programs will not only be forgotten but it might end up making the customers feel less valued. Never underestimate the power of social media. It is an excellent way to stay in touch with customers and also to monitor competitor behavior. Regular communication will also help fine tune loyalty programs.
10) Monitor and adapt
Any business that does not follow Darwin’s theory is certain to be wiped off the map in due course. The key to survival is change and evolution. It is necessary to continuously monitor the success of your loyalty programs and enhance the same as and when needed, in line with changing trends and preferences of customers. An unmonitored campaign is as good as a non-existent one.
Customer loyalty programs, especially chain store loyalty, will work as long as four things are in order – detailed target audience knowledge, unique programs, constant communication and effective monitoring. Are you ready to give that much needed boost to your business?