Many would argue that the primary goal of a customer loyalty program is retention. However, there are many other aspects that bring tremendous value to the business to consider. Along with retention there will likely be an increase in sales. More customers staying means more customers buying.
Dependent upon the program structure, companies offering a loyalty program also have an opportunity to gather more robust customer data. Some examples of the advantages to collecting this data are shown below:
Perhaps the most satisfying benefit is more meaningful customer engagement. Loyalty can open the door to more personalized dialogue, thus a more personalized relationship.
The desire to segment customers and provide custom programs or specialized treatment for those that are considered to be target or key accounts is natural. However, it is imperative that the program baseline not only be easy to explain and understand from a customer perspective, it should also be easy to administer from the vendor perspective. Therefore, the baseline to participate should be the same, regardless of the customer level. The customer benefits or reward value delivered can then be tailored to the level of customer. This will entice the low and mid-tier customers to ante up to get to the next level in the program.
Be certain to leverage the distribution partners if operating in a B2B channel. Many times, distributors voice the “What’s in it for me?” attitude. Loyalty programs can aid in squashing that mentality. Distributor sales reps are, and should be operating as, an extension of the manufacturer’s sales team. Hold them accountable for selling not only the product or service, but also the loyalty program. Consider developing a matching program where they earn only when their customers buy and earn.
Next, be certain to evaluate the requested customer inputs against the desired reward outputs. Try to develop a win-win for both the company and the customer. As an example, if the company desires better customer data, make data reporting a requirement to participate in the program. From a redemption aspect, do customers want or need more training, or diagnostic assistance, business planning and budgeting tools, or monetary rewards like financial assistance with industry events or dues? If so, make those items available for them to redeem.
Finally, define the program. Will it be points based? If so, based on what kind of transaction? Is the program geared toward individuals, households, teams, companies? Over what time period – annually with points expiring every year, or accrued over many years without expiration? Accrued in year one and available for redemption in year two against the next year’s purchases? Will the rewards be cash or rebate based or hard/soft goods?
For more information about this blog or how C5 Insight can take you one step closer to loyalty implementation, contact us here!
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