Customer loyalty has really become a focus for businesses over the last two decades and trying to crack this concept in an ever changing market can often be difficult.
Customer loyalty has really become a focus for businesses over the last two decades and trying to crack this concept in an ever changing market can often be difficult. To be able to gain a better understanding of how a customer loyalty program can be implemented to achieve results, it is important to fully grasp what customer loyalty is actually addressing. Although there may be a myriad of ways to describe customer loyalty, it can be simply articulated to describe the likelihood that previous customers will continue to buy from a specific organisation.
Today’s consumers, whether they are B2C or B2B, are all spoilt for choice. At no other point in time have they had so many organisations pursuing their business. Boutique stores are now seeing mass market retailers stocking comparable products, the explosion of the online retail sector is providing convenience to purchasing and the removal of geographic barriers providing products at comparable, if not cheaper prices delivered from all around the world. These challenges have been compounded by an additional factor when you consider this availability of information which members of your program have access to 24 hours a day – whether it be the ability to check competitor prices on a smart phone while looking at an item in person, or the range of cost comparison websites which have been set up to direct consumers to the cheapest product available, this has led to strengthening the power of consumers.
Although this somewhat paints a scary picture, it is not all doom and gloom. Whilst businesses can quite easily put a rudimentary program in place for a loyalty program, by considering 7 key factors you can build out a program which not only achieves your objective of increasing customer loyalty, but also create an advantage which will be the envy of your competitors.
7 Key Factors to Increase Customer Loyalty
1. Understand your brand
A loyalty program that works for one company will not generate the same success if just replicated in another business. Each brand has specific values and a unique personality and this should be amplified through a unique customer loyalty program.
2. Talk to your market
In a similar manner to understanding your own brand, it is imperative to know what resonates with your market and talk directly to them. Understanding what makes you different from your competitors will provide you with the foundations, and then your customer loyalty program must convey this message.
3. Ensure rewards are achievable
Creating a program where the commitment from the customer must be so great before receiving a reward, you will never engage them in the first place. A broad range of rewards that are scaled based on the value the customer provides to your business will not only interest your customer base, but will also strengthen the engagement once lower value rewards are redeemed.
4. Communicate effectively
There is no point having a customer loyalty program in place if no one knows about it. A concerted marketing push must be made to create awareness and ensure that your customers understand what is involved in the program and most importantly, what is in it for them.
5. Ensure rewards are refreshed
Having a dynamic program will keep members engaged and keep them wanting the latest rewards. With the range of choice available to members of your program, as soon as a program appears stale or is no longer offering the value it once was, members of your program will not hesitate to look elsewhere.
6. Simplify redemption
The operations behind the delivery of a reward to a client can be just as important as the reward itself. Receiving the reward quickly and easily will be expected, though if it is a long and arduous process, then there is a good chance that your client will not be engaged enough to go through the process again.
7. Create advocates for the program
Fostering an environment where members are encouraged to become advocates for your program can be extremely powerful. Customers have such a strong voice, not only through word of mouth promotion, but also through various other social platforms, so make it easy for them by keeping up your communication and be sure to make your program truly rewarding. What often goes under recognised is the ability to leverage “trophy value”, which can be used to strengthen the integrity of your program. Trophy value is a powerful advocate for any loyalty program, if a client redeems a BBQ through a program and invites friends or colleagues (aka other potential clients) around for a BBQ, they are likely to talk about where the new BBQ came from simultaneously reinforcing your brand recognition and demonstrating the value in being your loyal customer.
So don’t just set up a loyalty program for the sake of it or you will likely fail to achieve the business outcomes you set out to. To make a positive impact on your bottom line, ensure you make your program stand out from the rest and offer real value to your customers.