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Building a Customer Loyalty Program
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Andre Plessis, CEO Savings4Merchants Other Valuable Articles How to deal with someone difficult How To Succeed With Direct Mail Advertising 21 Ways to Promote Your Business Successfully Understanding The Sales Process To Close More Sales Why Should You Write a Newsletter What is a Unique Selling Proposition How to avoid being ripped off by online companies Why Should You Educate Your Customers Learn From Your Mistakes & Grow Rich Don't Put All Your Eggs in The Same Basket Tips to Protect You Against Scams How to Follow up With Prospects |
Building a Customer Loyalty
Program Frequent buyer programs, also referred to as loyalty programs and reward programs, have become a critical retention tool for businesses searching for unique ways to build customer loyalty. For example, estimates show that more than 50 million Americans belong to frequent flier programs. You also can earn points when you shop for groceries, go to the dry cleaner etc. With the increasing cost of customer acquisition, it makes a lot of sense to focus marketing efforts on retaining and up-selling current customers. In fact, it can cost as much as seven times more to win a new customer than to keep an existing one. So you need to explore all possible methods if you want to maximize your customer base. How do you keep customers coming back? How do you create loyal customers who will ignore your competitors? Loyal customers represent your business' goodwill and add great value. Domino's Pizza estimates that a loyal customer is worth about $5000 over the 10-year life of a franchise; Ford Motor has calculated that a loyal customer is worth $142,000 over their lifetime. Customers who are loyal are gold because they won't shop around. Chasing new customers is a necessary activity but it is usually three to seven times more expensive to get a new customer to purchase as it is to get a repeat purchase from an existing one. Critical questions small business owners should ask themselves are:
Customer Loyalty Facts
Companies with successful customer reward programs enjoy increased revenues, lower marketing costs and collect invaluable information. The bulk of the information is gathered when customers sign up. Later, data is collected through surveys and during transactions. By tracking current customer data, you can discover opportunities, and identify their needs. And once you uncover the likings of your best customers, you can develop marketing campaigns targeting those specific prospects who share preferences. The primary objectives of any loyalty marketing program are these:
A good customer loyalty program include value-added benefits that enhance a customer's buying experience. Tips for Getting Started 1. Choose the Right Reward Program Suppose you owned an Pizza shop and wanted to reward customers who had purchased at least nine pizzas. Providing the tenth pizza free would be a better choice than offering an unrelated gift, such as a discount on a movie ticket or even cash, because it would cost less to provide and be more memorable for customers who could easily relate it to your business. 2. Entice Your Customers To be effective, it’s essential to tell customers what they can expect. This builds excitement and entices them to make purchases toward their goals. You can also use your reward program to encourage customers to try additional products and services. 3. Reward Your Best Customers Offering graduated awards with increasing cash value is a great way to motivate your best customers. The main benefit is turning low-value customers into high-value ones. There Are 3 Different Types of Reward Programs 1. This program is based on the number of purchases made by any customer. You could give away a free product or service to any customer that makes ten or more purchases. 2. Dollar Amount You can require a certain dollar amount be spent before the customer receives a reward. Tell customers if they spend over $100 in one month at store they get a 25% discount on their next purchase. 3. Points System Reward customers a point for every one-dollar they spend. Lets say customers can get a free computer for 300 points. Andre Plessis
Author & Marketing Consultant
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