Recent reports state that in order to drive customer loyalty, brands must have a loyalty program in place. I disagree! Don’t get me wrong, I think some loyalty programs are fantastic. As long as they have a clear purpose, a strong strategy behind them and deliver value to the customer and the brand.
There are many brands who don’t have a loyalty program, yet still create strong customer loyalty. These brands are still having a direct conversation with their customers. They’re still putting a program of communications in place to influence and change customer behaviour.
Many loyalty programs are ineffective. They’re geared to not reward the customers who are most loyal but used as a hook to sign up, unfortunately, most of those don’t stay engaged with the brand. In quite a few cases customers actually get fewer benefits the longer they are loyal to the brand and end up looking elsewhere – defeating the purpose.
Driving growth without a loyalty program
Recognise the customer
Customers want to feel appreciated. Think of ways in which you can add value – across the entire journey. This may be as simple as sending a ‘thank you’ or knowledgeable employees explaining/demonstrating products and offering advice to help the customer. Understand where they are in the customer lifecycle and reward the behaviour you want to influence.
Use data to personalise
The more times a customer engages with you, the more data you are able to collect, helping you to get to know the customer better. This enables you to anticipate their future needs and continue the conversation – putting them on a ‘path to re-purchase’.
Focus on the customer experience
Customers are time-poor, they expect seamless experiences, and they expect them in real-time, on the go. Customers today have endless choices, if they have a poor experience it’s easy for them to switch brands – and for them to tell others.
Have a communications strategy in place
Just because you have a customer’s email address or mobile number does not mean you can flood it with promotions hoping you’ll jag those extra sales to meet the targets, relevancy is key to keeping and growing customers. Remember, one button (the dreaded unsubscribe) can lose you that customer forever. By only contacting those customers who you have something relevant to say, will dramatically increase the success of your engagement.
Give them a reason to come back to you
Think about what the customer segments value and tune the right incentives to encourage the behaviours you want them to do. Not all customers need discounts, and often these discounts are just cannibalising future sales and setting the wrong expectations. We recently shared a story about Walgreen’s ‘get a shot, give a shot’ program. This incredible initiative brought customers back into stores (increasing sales by 500%), while offering their customers the opportunity to support a great cause.
Consider the customer lifetime value
You need to look beyond today’s sales, and think about the long-term value of the customer. It costs upto 10x more to acquire a new customer, than it does to retain an existing customer. We suggest dedicating at least 10% of your marketing budget to activities which keep and grow your existing customers.
Essentially, customer loyalty comes down to having strong relationships with your customers, knowing and understanding who they are. A loyalty program could enhance the relationship, however it’s not a mandatory requirement to create loyalty.
Customology are specialists in customer lifecycle management. Contact a Customologist today on 07 3902 7700 or firstname.lastname@example.org for more information on how we can help you build a communications strategy or customer program designed around the customer lifecycle.