Companies nowadays are coming up with various customer loyalty programs to ensure bigger profits for their companies. This may seem to be quite a worn idea already for a customer loyalty program, but people, no matter how wealthy they are, actually enjoy getting freebies now and then.
1. The Concept
Let’s further discuss the concept behind this customer loyalty program. With a rewards-based customer loyalty program, the customer will have fun spending more on your company due to your company’s promise that the bigger points the loyal customer receives from their purchases, the greater the rewards that they will soon get from the company. From having free expensive designer items to even an all-expenses-paid grand vacation trip, courtesy of the company. It doesn’t matter – the point is, it is a small amount to pay considering the years of loyal purchases that these customers have brought into your company. Of course, this all sounds good on paper. However, a truly excellent loyalty program doesn’t just pamper customers but also entices them to continue patronizing your business, tell their friends about it, offering your business some invaluable word-of-mouth advertising.
2. Rebate Programs
A less fancy customer loyalty program is the rebate program. A program wherein the customer will get a percentage back from the purchases as coupons that they can use to pay for more stuff from your company. It is a simpler customer loyalty program as compared to the rewards system. Not only will it be easier on your company’s pocketbooks but it will also give your business some added profits because, through the rebate customer loyalty program, your customers will, in the end, end up spending more on your company because the coupons cannot be exchanged for real currency or used anywhere else. In actuality, there is no real incentive for customers to use the program.
3. Loyal = Profitable?
Some people still view that providing your loyal customers with great service does not automatically ensure a company that their customers will stay. This is why there is a great need for an effective (but still profit-oriented) customer loyalty program. While great customer service can result in a repeat purchase, a well-designed customer loyalty program will ensure they wouldn’t even ever dream of going to your competitors, and in fact, would even recommend friends to use your services.
4. The What Ifs
The biggest concern that most CEOs have is a strong customer loyalty program can keep customers that are already loyal. But what about the next generation of shoppers? And even worse, an ill-planned loyalty program, built with little or no data about your existing loyal customers, will be doomed to fail. Find ways to collect these important data months in advance of launching your program. Invest heavily in a statistics specialist, and ensure he has the latest statistics software such as SPSS. Remember, even if you have an abundance of data, it will be completely useless if you can’t make sense of it. Worse is having data that were not collected scientifically to be an accurate representation of the population being sampled.
