There are two general reasons for creating a customer reward or loyalty program:
- Devise incentiveÂ for existing customers to buy additional products/services
- Strengthen customer relationships with the goal of diminishing the likelihood of customers switching to your competitors.
Here are suggestions for a successful reward program.
- Prepare to implement the program by clearly explaining it to customers and fully training employees.
- Utilize your customer database by deciding how you will make the offer at the time of their next purchase.
- Develop progressive reward system by making rewards easy to obtain and offer the best incentives forÂ larger ($) purchases, such as your high-end products/services.
- Offer meaningful rewards that also benefit your business by striving to increase the sales of your most profitable products and services.
- Use your database to customize future offers based on customersâ€™ purchase behavior and gain insight for finding new customers who match the profile of your best customers (target marketing).
Here are three tips to remember when marketing in a struggling economy.
First, focus on strengthening relationships with your best customers.Â Who are the twenty percent generating eighty percent of your revenue?Â Use your tracking system to identify them if you donâ€™t already know.Â If you donâ€™t have an effective tracking system and customer database, nowâ€™s a great time to start developing them!
When was the last time you had a personal conversation with these key customers?Â What are their concerns?Â Do you need to modify payment terms?Â Do you need to reward them with special services that may only cost a small amount but generate additional loyalty?Â Do they provide referrals?
Second, examine your current marketing activities.Â Focus on those producing the greatest return on your investment of time and money.Â If you canâ€™t quantify your return, nowâ€™s the time to develop a practical method.
Third, now is not the time to cut corners on customer service.Â If you lose profitable customers due to a decline in service, you may not regain them after the economy improves.