Are you contemplating adding a Loyalty Program to your toolbox of marketing strategies? Increase your customer retention – keep them happy, loved and wanted – by incentivizing your customers and giving them a reason to keep coming back to visit your store or website often. Who doesn’t love an incentive to return? Whether you are a retailer, a manufacturer or a ski resort there is no reason to not reward your best customers for their loyalty.
Building a long term relationship with your customers is key. Did you know that it’s 3 to 5 times more expensive to acquire a new customer than it is to upsell or keep an existing customer? A customer Loyalty Program is a great way to build on that customer relationship, to expand or lengthen the relationship and as a result increase your profits. Using the CRM data you have on your existing customers will help you to identify, recognize and reward your customers for their behaviors.
A few questions to consider about how to structure your Loyalty Program:
- What is the entry point?
- Determine whether every customer is automatically enrolled with a purchase or if they must sign up/join to be a member of the program.
- Are points rewarded? And if so how many?
- (i.e. For every $1 spent, members earn 1 point)
- When can you redeem?
- Decide how many points/dollars are needed before the customer can redeem them. (i.e. 200 points earned equals a $5 off coupon)
- What method will be used to redeem points?
- Some ideas would be to award a coupon, gift card/gift certificates, discount, rebate, or cash back.
- Are you going to include incentives or freebies for loyalty members?
- Will they be eligible for free shipping, birthday surprises, bonus offers, member-only sales or additional benefits for belonging to the loyalty program?
- How will customers sign up for the loyalty program and how will they track their status?
- How will you advertise and communicate your Loyalty program?
- (i.e. A monthly email that includes the customers points to date and a redeemable coupon, an email after a purchase asking them to join)
- What metrics will you look at to gauge the success of your program?
- Points earned, points redeemed?
There are many factors to think about when setting up a Loyalty Program. A great reference for loyalty best practices is the website CRMTrends which includes a comprehensive loyalty checklist by Michael Szego (Ogilvy & Mather strategist) – definitely worth checking out!
Review Case Studies library for more resources!