Loyalty Programs Strategies for Developing Customer Retention
Customer Retention “Smart companies have realized that customer loyalty is the most powerful sales and marketing tool that they have.
Customer Loyalty is the customers overall commitment to the brand or service, in part because of an emotional attachment to that relationship, and the consistency of the brand that ensures an elite level of trust between the brand and the consumer.
Customer Retention is the simple goal
Customer loyalty can be described in one four letter word? MORE
82.4% of consumers are more likely to shop at a company that offers a Loyalty Program.
Consumer Brand Loyalties Strategies allow you to • Brand Buzz - ignite your brand and create a cultural experience. • Provide a unique Customer experience - offer customer service beyond the norm. • Provide Consistency - whether it is on the web or face-to face (buying process). • Allow access to Employee Ambassadors – protecting the brand, while serving customers as friends. • Provide an Atmosphere of Trust – Finally, these strategies allow the company to Align with “its” customers, be honest, educate, serve their needs, and deliver quality at a reasonable price.
They provide a unique understanding the company’s audience.
How they buy, what they buy, and where they buy?
US Corporations lose 74% of their customers every five years.
The average company has a customer defection rate of 38% yearly.
75% of customers belong to at least one loyalty program.
48.9% of baby boomers said they would opt out of a loyalty program that was too complicated.
Raising your customer retention by 5% can increase the lifetime value of your average customer by 25% – 100%.
60% of millennial buyers said that they are loyal to brands.
43% of millennials admitted to using the same brands as their parents.
50% of Millennials proclaim that price is the most important attribute in the purchasing decision.
Cart abandonment averages 75.6% for US companies with online e-stores.
75% prefer a company that is socially responsible, and gives back to society.
Female millennials tend to be unimpressed with logos and are increasingly interested in unbranded goods.
Millennials will gladly skip the brand names for the better priced fashion items
Loyalty Programs: Deliverables • Easy to join - utilize an email address as a quick start sign-up in store or online, let the customer add additional information later. • Easy to earn - simple point system, avoid upfront fee’s, (Keep it Simple Stupid- KISS) • Gamifying - fun and interesting • Attainable – The key is to make sure the customer can actually achieve a discount, coupon, freebies, etc. Programs should be short on rules, and long on customer benefits.
65.3% of Gen Xer’s have dropped a brand loyalty program in which the rewards were not that compelling!
25. 38% Gen Xer’s say they will stick with a brand when they find one that they like.
Loyalty Programs: Winning Ingredients • Communication, is a two way street, engage, listen, and respond – develop strong alliances through social media interaction. • Collaboration, make the relationship a partnership, understand the customer’s needs, design products that meet their expectations and desires. • Exceed expectations, be an advocate for customer – provide product quality, outstanding service, mutual respect, and reasonable pricing. • Research, understand the uniqueness of your customers, define the needs of specific channels, anticipate trends and satisfy market demands.
47% of Gen Xer’s said they share brand opinions and brand preference with friends and family.
Generation X is the most influential generation with regard to brand opinions.
Gen X spends 37.4 hours per month online, more than Millennial's or Baby Boomers.
Loyalty Program: Best Practices • App based programs are preferred by Gen X & Y, these are easily downloaded and maintained by customer, allow for easy use and access to discounts, credit cards can be loaded to accounts for quick purchases. Although, Apps can be expensive to develop, but we are looking for lifetime relationships so the initial cost should override that concern. • Loyalty cards are another option (maintain the card info within your CRM in the cloud), but they can be quirky – customers lose cards, they forget them, etc. – these issues can make using the card a hassle (not customer friendly in so many ways). But it’s a start.
Loyalty Programs: Best Practices • Data Collection, ultimately Loyalty Programs help you collect and retain data with regard to your customer base. What you do with this data is essential to your future success, make sure you can access the data, that its easily integrated within your CMS, CRM, and IT services. Data helps you understand the customer likes, dislikes, trends, competitive market, and so much more – not only will you gain an understanding of what your customer wants 6 months from today, but also what they will want in 5 years - and remember - this is about lifetime retention. • Exclusivity, make your loyalty program part of the customer experience - part of a special relationship between brand and buyer – you will need to guide employees and their attitudes toward developing those bonds with the customer. The internal team (employees) should uniquely understand the external messaging that must be delivered effectively to your audience.
Loyalty Programs: Best Practices • Measurement, look at the results of your program – was it an effective revenue producer and brand development tool? and of course the ROI needs to be reviewed. • Evaluate, some include evaluation with measurement but realistically this is a separate deliverable. Review your loyalty program at six months, then at twelve months, and continue to do so yearly. Don’t let it become stale, keep it competitive with the competition, and make sure it evolves with your business and the market in general. Decide what works or what may work moving forward, align it with new products or services, and make the program a constant “work-in- progress.”
Loyalty Programs: Negative Myths “Apple has never offered a loyalty program” Guess what? “You are not Apple”.
Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.”
Loyalty Programs: Potential Results • Increase revenue • Enhance relationships with your current customer base - bond • Develop relationships with new customers - introduce • Ignite an internal – external buzz between the employee ambassador and the consumer • Understand customer’s needs, wants, etc. • Energize the power of the brand, increase brand awareness • If loved, customers will love you and tell their friends about you.