- Business and Employment
Could Introducing A Loyalty Scheme Work For Your Business?
A customer loyalty scheme can help to retain customers
One of the major reasons customers decide to take their business elsewhere, is because of the perceived indifference of the retailer or supplier. Introducing a loyalty scheme can help your business retain more customers and prevent them being poached by your competitors.
Some points to consider when creating a loyalty scheme
Many businesses talk about the importance of attracting new customers . . . widening their customer base . . . increasing their market share, while in some cases not nearly enough consideration is given to keeping the customers they’ve already got happy.
Particularly in the early years of running a business it seems.
This situation is said to be akin to running a bath without putting the plug in! Not a bad analogy.
We’re frequently reminded by marketers that it can take around seven times more effort on our part to win over a new customer, so doesn’t it make perfect sense to take steps to actively retain the customers you already have?
These days, loyalty schemes exist for the smallest of purchases – your morning latte from certain high street retailers for example – to much larger and more expensive purchases like your monthly supermarket bill.
Implementing a ‘loyalty scheme’ for your company or business can be a great way of keeping your customers onside – and coming back for more of what you offer. So how might you go about it?
Some things to consider when creating your loyalty scheme:
1. Tell a sample of your customers about your proposed loyalty scheme and ask them what their preferred rewards might be. Would they prefer a branded gift for instance? Or would they prefer to make savings on future purchases?
2. Get your employees involved with coming up with ideas for your loyalty scheme. Do they think it has potential? How should your scheme be designed to best reflect your brand values?
3. Trial your loyalty scheme for six months say, to see whether it’s making a difference. You can always tweak different elements of your scheme to see what works best over time.
4. Use the data you collect to provide your customers with future marketing offers. Think how big organisations like Amazon use purchasing information to target their customers with relevant products. You buy one book about starting a franchise and next time you visit the Amazon site there will be another six similar products in your ‘recommendations’.
5. Think about how your loyalty scheme members might be able to help you develop your business in other ways. By taking part in a customer survey or a consumer group for example.
6. Consider how teaming up with a joint venture partner (or partners) could scale up the loyalty value for customers. This approach can work particularly well for non-competing businesses within a certain region or locale who share the same (or similar) customer profiles.
Market research repeatedly reminds us that ‘perceived indifference’ is one of the main reasons consumers consciously change shopping habits or suppliers.
So show your customers you care with a loyalty scheme that adds regular value to their doing business with you and you’ll go a long way to keeping that invisible ‘plug’ firmly in place.