In the words of the wise, the problem has been, and will always be, choice, specifically too much choice. Intense competition has bestowed customers (across product and service types) with great many choices. As many business owners know and acknowledge, it is far more economical to hold on to the customers they have than to acquire new ones. Internet fueled information overload has created an even bigger challenge for businesses to select new tools and methods that would make them stand out in the crowd. Customers now have the ability to not just ignore the product they deem unfit to their needs but also easily transmit their thoughts to many others. All it takes is a few lines of text to make or break a company now. This unfortunately works on existing customers too!
It is left to companies to come up with quicker and more magnetic ideas to delight their customers and prevent them from looking elsewhere. Studies have indicated the effectiveness of customer loyalty programs in promoting more consistent brand usage, 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. Done well, 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 to launch a customer loyalty program in the near future, here are some pointers on how to kick-start a potentially successful one.
1) Understand 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. In ERPLY, you can identify your top customers, see what they buy, and encourage them to buy more, or complementary items with your program.
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. In ERPLY you can see your sales numbers by product, by group, or by almost any other metric you’d care to examine and measure. This can show you where you need improvement, and you can design a program to facilitate that.
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. Use your comparison reporting tools to see your period over period growth and determine what normal growth has been, and see when you’re getting better than expected results.
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.