As we all know, it’s hard to acquire reliable customers that’ll patronize a business for years to come. You can seriously boost your bottom line by making customer retention a top priority. Whether your core business is an offline affair, a strictly digital operation or a little of both, customer loyalty programs can work wonders. Every company from Autozone to Zappos implements some form of customer loyalty program these days. Launching your own successful loyalty program isn’t tough if you follow a few simple steps.
Do Your Market Research
Knowing what your audience would like to see from you in the rewards department before you get started will save you a lot of time and money. You could find out pretty easily by polling current and prospective customers directly. Use good old-fashioned comment cards if you have a physical location or rely on a digital equivalent on your website via the shopping cart checkout. You can glean great insights from online abandoned cart data if you know what to look for.
Come Up with Loyalty Ideas
There are many ways to roll out loyalty programs, most of which are applicable to a range of businesses. For instance, you could give away an item for so many units purchased like a “buy nine, get the tenth for free” promotional campaign. On the other hand, you might reduce prices across the board for all items purchased based on how much business a customer sends your way. A tiered, percentage-based discount schedule is always a sound move.
Settle on a Few Delivery Channels
Once you have a handle on how you plan on rewarding your customers, you’ll need to figure out how to manage the whole shebang. There are plenty of helpful services available to choose from that’ll make management a lot easier. Apps like Belly, Perka, Loyalty Gator, RewardMe, Social Rewards, Swipely and Womply are all viable options. Test-drive a few that seem appealing and pick one that offers the best mix of features for your business.
Launch the Program in Earnest
If the experience of many businesses with Groupon is any guide, there’s definitely such a thing as moving forward too quickly with discount programs. It’s difficult to weed out the drive-by customers if you’re too aggressive with those rewards. Nurturing a relationship with each and every customer is after all the broader goal of a loyalty program. Begin by rolling out incentives to your regular customers to see how they react. You can expand the program later once you see positive results.
Solicit Feedback from Customers
As the program or programs unfold, you should go out of your way to gain unbiased feedback from your clientele. You could try the time-tested comment card approach or use purely digital means to gauge the effectiveness of your loyalty program. Beyond determining whether or not your customers like the program and its rewards, you should focus on figuring out what might work better. Use the comments left by customers to change course if your current rewards aren’t piquing their interest.
Perform a Cost-Benefit Analysis
Sooner or later, you’ll need to figure out if your loyalty program is driving sales in the way that you’d like it to. While the cost of giveaways is easy to calculate, the new business that these write-offs generate is harder to pin down. Performing a cost-benefit analysis with the help of a little software is a necessity. Use cloud-based apps like Google Drive or Microsoft 365 to tally up the data in real time and share it with your business partners.
Fine-Tune Rewards & Delivery Systems
At the end of the day, even the most lackluster loyalty program can be improved to deliver superior ROI. You may find that certain freebies are paradoxically more sought-after than others that are actually worth more. That’s where the aforementioned data collection and cost-benefit analysis come in. Tweak your formulas as needed to boost customer satisfaction and retention. The idea is to not only strengthen your existing relationships but to squeeze as much commerce as possible out of each.
Use Your Loyalty Program to Guide Growth
While a loyalty or rewards program is a great way to hold on to customers, it’s an even better way to bring in new fans of your brand. The next step on your journey is to expand your loyalty program so that it appeals to would-be customers. Perform some market research regarding consumer demographics in your geographical area or your industry to identify new niches that you can move into. Lastly, determine what kinds of loyalty discounts will appeal to your future die-hard customers.