You work so hard to attract each new customer, but are you working hard enough to keep them coming back? Developing customer loyalty should be a centerpiece of your marketing strategy. After all, it’s cheaper to retain your customers than to go after new ones.
What makes people loyal to a business? There are two main parts to customer loyalty, and they are interconnected. One is the emotional connection to the business, the owners/management, and the employees. And the second has to do with what the business gives customers to keep them coming back.
Those two components are connected because incentives make customers feel valued, thus building the emotional relationship. At the same time, customers’ attachment to the brand makes them more likely to take advantage of loyalty incentives.
Customer Loyalty programs should be designed to tap into these thoughts and feelings about a business and brand.
There are a few different kinds of customer loyalty programs that you can implement. Choose one that works for your business model. Or, devise something totally new.
Frequent buyer programs
There are a couple of different ways you could structure a frequent buyer program. One is with points. When a customer makes a purchase, he or she earns points toward a reward of real value. Often, the awarding of points is based on the number of dollars spent. E.g. $10 = 1 point, $20 = 2 points, etc. You can keep track of the points electronically, on a punch card, or some other way.
Two main things to remember about a customer loyalty program based on points: 1) Make sure customers understand what they will get, and that the relationship between the points and reward is straightforward. 2) Make sure the reward is worth it.
Customers won’t care about your loyalty program if it’s just for show. Spend $500, get a free… keychain? If it wouldn’t be worth it to you, it won’t be worth it to your customers. You don’t have to give away the house, so to speak. But do make sure you provide a decent incentive. Percent or dollar off coupons, free gifts (good ones), or extra services are all good options.
The other main kind of frequent buyer program uses a tier-based system.This is a system with different reward levels. Normally, you would reward your customers with a small gift, discount, etc. after a few purchases. Then they would have the opportunity to work their way up to higher-level rewards with additional purchases.
The advantage of this system is that the more a customer spends with you, the bigger the payback. Longer-term customers feel more valued, which builds the emotional relationship with the brand. There’s no hard-and-fast rule, but tier-based customer loyalty programs often work better for high-price-point businesses like airlines and hotels.
Exclusive discounts can be a good way to reward customers who opt into your email newsletters or SMS offers, or who follow you on social media. This gives people an incentive to connect with you. To do this, you have to make a commitment to staying connected with those who opt-in. However, you need to strike a delicate balance. You have to supply your followers/subscribers with relevant content and offers. But you also need to avoid inundating them with emails, texts, or posts. That’s the quickest way to end up unfollowed or in the junk folder.
You can also offer exclusive discounts for referrals. Referrals are one of the most valuable commodities in the business world, so any discount or reward you give for referrals has to be of high value. For reference, if you have a frequent buyer program or a subscription-based discount, your referral-based discount should be higher – possibly substantially higher. Just make sure you have some way of verifying that the referrals are genuine. For instance, the referring customer doesn’t get his reward until the referred one makes a purchase.
Personalized Messages and Offers
Similar to exclusive discounts for followers and subscribers, but with a twist that makes it even more powerful. You are perfectly free to pick and choose the customers who get certain, extra-special offers based on criteria of your own choosing. This can work for businesses of any size but is an ideal tactic for smaller businesses.
For instance, let’s say you run a small photography studio and have one customer who comes in regularly. She raves about how much she loves your studio and your employees. And she mentions that she’s always recommending your business to her friends and family. By emailing her and saying “thanks, we just want to show you how much we appreciate your loyalty,” you can hit her with an unexpected (and good) surprise. It’ll be even better if you present an unexpected gift or free discount.
You can also send personalized messages of thanks to your loyal patrons, even if they’re not accompanied by a discount. That bit of attention is one of the things that helps build an emotional connection between business and customer.
No matter what sort of rewards, offers, and incentives you use to keep your loyal customers coming back, your loyalty program has to be purpose-driven. You must also be consistent and constantly promoting the program. It will not grow organically until a critical mass is hit, and even then, the benefits of continuous promotion will benefit you in the long run. Use incentives to strengthen the bond that already exists. But, don’t stop cultivating that bond on a more personal, emotional level. Customers do care about more than the carrot dangled in front of their nose. Beyond the bottom line, they want to feel connected with the businesses they are loyal to.