The data doesn’t lie. Keeping a customer is less expensive than acquiring one. One of the many ways that companies work to retain their buyers is to implement a loyalty program. These programs really can work, too. When your customers feel appreciated and engaged, they’re more likely to come back for future purchases.
We Have a Problem
So what’s the problem? If everyone’s promising customer retention through the use of loyalty programs, what could possibly go wrong? Well, a lot, actually.
A loyalty program should always put the customer first. Your goal is to prove to that customer that your company is loyal to them, not work to inspire loyalty in the buyer. Hmmm. Probably never thought of it that way before, have you?
When you cut corners to provide a loyalty program without putting a lot of work into the process, your buyers will notice. Even worse, you may be providing some great brand recognition…for someone else.
Popular Loyalty Programs
Two particular loyalty programs come to mind when considering implementation. The first is Plenti, part of American Express. I know; something as large as AmEx doesn’t seem like the right fit for your tiny little business, right? That’s where the partners come in. Businesses large and small partner with Plenti to offer points to consumers, regardless of which partner makes the sale.
Another similar program is Spring, which works with restaurants and pubs to provide rewards for frequent customers. Buyers may spend most of their time in one particular pub, but they can use their points in another if they choose.
The benefit here is, of course, safety in numbers. No matter how small your business may be, someone will always be part of your loyalty program because of their loyalty to other brands. You get a little exposure and maybe make a few sales. The problem, however, is that you’re not retaining customers for your own brand.
If you’ve ever been in line behind someone using a Plenti card or next to someone at a restaurant using their Spring rewards, then you’re already aware of the conversation that occurs.
“Do you have a Plenti card?”
“Yep, right here. Got almost enough points from shopping at Macy’s last night. This should put me over the edge.”
Who gets the credit here with the buyer? Who does the store refer to when invoking the loyalty program? Plenti. Or Spring… You know.
Who was never once mentioned? That’s right. The actual brand hoping to retain the customer through the use of the Plenti program. The customer doesn’t really care which store they’re in or who they’re giving money to, as long as they get the rewards points.
Now you’re starting to understand why these mass rewards programs could actually hurt your business. So, what can you do about it?
Finding a Solution
Now, the real problem you face as a small business is that creating, implementing, and maintaining a loyalty program on the same rewards level as Spring or Plenti is outrageously expensive. The good news is: You don’t have to. Research shows that buyers just want to feel appreciated. In fact, most consider a heartfelt “thank you” to be more valuable than a few cents thrown back their way for each purchase.
Of course, words are just words, and you really want to show them you care, right? Why not take it back to the basics with a punchcard app for mobile devices or points for purchases on your website? The bonus for you is that customers have to sign up to use these programs, and only you get the benefit of that contact information.
Seriously, keep it simple. If you can afford to go bigger, take that chance. Just make sure your customers feel valued. More importantly, make sure you’re always getting the credit for your rewards program.
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