This post is by Ivan Schwartz, Director of BRewarded, a specialist loyalty solution provider based in Sydney, Australia.
Things may just have gone full circle as customers become increasingly difficult to connect with. Rather than throwing up your hands, it’s worth examining what you are doing to recognise your valued customers – and then what you can do to nurture these relationships for mutual gain!
Loyalty programs need to reward customers according to the value they bring to their business. So if you’re not segmenting, then you’re at risk of rewarding customers who are bargain hunters anyway and who aren’t going to be loyal. Why not consider analysing your best customers according to their frequency and offer them the best rewards, rather than giving everyone the same rewards.
The most successful businesses today understand the importance of forgoing quick sales by investing in the longer-term benefits of customer loyalty. This willingness to accept customer experience as the primary driver for loyalty and the ability to effectively incorporate this into your business is the secret to competitive edge. Let’s explore a little further…
The problem with an emphasis on short-term gain is that it ignores the fundamental tenets of lasting relationships and the conditions that breed customer loyalty. It also forgets that in a world of multiple channels and near-infinite product choice, customers remain fixated on valuable experiences with businesses they can trust.
Until a business understands who their most valued customers are and what their drivers are for doing business with you, they really are at sea.
As all the marketing theorists and practitioners will tell you, it costs in the order of ten times as much to acquire a new customer as it does to retain an existing one. For that reason alone, it’s commercially useful for a business to have an integrated loyalty program that will identify who your most valuable customers are, what their drivers are and what your best customers look like. That should then shape your marketing program. Sounds simple – well it actually is!
Segmentation then, becomes the first step towards determining who your best customers are, analysing their needs and tailoring communication in line with what you’ve learnt. This then serves as a guide for acquiring potential customers who share the same profile as those you wish to retain.
Before we go into some universal ‘must do’s’, lets briefly examine some of the reasons for having loyalty programs in the first place. This is clearly where it starts – and finishes if you don’t have the ‘ammunition’ required to convince the ‘bean counters’ that this can – and should be – the most profitable ‘thing’ you do to grow your business!
“If customers believe they share values with a company, they will stay loyal to the brand.” – Howard Schultz
The following are some of the key reasons we advocate that businesses consider implementing a loyalty program at the core of their marketing activities:Lets you differentiate yourself
Having your own company branded loyalty program is a distinct way to differentiate your business from your competitors and stay ahead. We all know that chasing your competitor’s lower prices can be a recipe to financial destruction – so while being competitive is clearly important, it should NOT be the sole reason your customers continue to buy from you. If it is, you had better watch out as the ‘under-cutters’ are out there – and will get you if you let them! Here’s your chance to step out from the crowd and truly engage at a personal level!Opens up the conversation with your customers
Having your own branded loyalty and rewards program enables you to keep your customers consistently engaged with your company, brand and message. They can now receive promotions, checkpoints, balances and make redemptions on products or services.Show that you care
Offering an exclusive loyalty and rewards program to your customers correlates to how you value them, which then builds customer loyalty and true lasting business relationships.Shows that you’re progressive
Demonstrate to your customers and prospects that your organisation is advanced in marketing and online initiatives and demonstrate your innovation towards your customer needs and wants.Enables your customers to become your advocates
Customers will become advocates of your company as a result of the rewards you give them, which increases new prospect leads for your business.
“Every company’s greatest assets are its customers because without customers there is no company.” – Michael LeBoeuf
And now to some of the ’Must do’s’…Segment your customers
In order to determine who your most valuable customers are you typically need to go through the process of ‘slicing and dicing’ them into clear groups that represent different values to your business. This then enables you to determine how best to engage with each group.Get the matrix right!
Developing an effective loyalty program takes time and careful consideration. Many call it a science! The ‘give and the get’ can be measured to the dollar and, as part of our getting the matrix right, we encourage you to explore where you could potentially take your valued customer relationships – and then map out over time how to get there – profitably.Develop your Communications Program
Loyalty communication is not a promotion – it is a program! We usually allow 6 to 12 months to ‘witness’ the results that we seek. Patience is a virtue in this regard!Reward each and every Customer
Key to the success of growing the business you do with your customers is to ensure that they are and remain on your radar screen – best achieved by simply rewarding them! While the level of reward may differ, offering a base level of reward to all customers is key to driving the results we seek.Get your systems in place
Busy customers have a basic expectation that they will not need to change the way they interact with you – so having systems in place to seamlessly collect transactions – whether at point of sale or via your backend systems is key.Measure your results
Like all good marketing, your loyalty program needs to be measured for its effectiveness. For only through effective measurement can you effectively determine what needs to be tweaked to deliver the best outcome. With your program in place you are at least in the game – and best able to keep your marketing program in line with the needs of your valued customers.Exceed their Expectations
The easiest, and possibly the most affordable way to build customer loyalty is to satisfy the customer. At least it used to be! Today, customers not only want their expectations met or satisfied, but they also want them exceeded. Commonly known as the Golden Rule, this practice is fading quickly.
“Listening offers data. Hearing offers empathy and intelligence. Activity, action, and engagement steer perspective and encourage a sense of community and advocacy.” – Brian SolisBack to the Future
So there you have it…identifying who your valued customers are – and developing plans to grow your business by simply engaging with what is important to them is not new. And with the tools we now have at our fingertips, there really is no excuse for not ‘getting real’ with your most valuable asset, your customers.
TrinityP3 has developed a suite of solutions and services proven to increase your marketing performance, in both efficiency and effectiveness, to achieve improved business outcomes. Find out more here.
The post Building Profitable Customer Relationships – it’s a case of ‘Back to the Future’! appeared first on .