Customer loyalty schemes have always made their marks on the retail and services industry. One can name quite a few loyalty schemes that are going around. These can range from retailer loyalty, to online rewards, frequent flier rewards, and other travel programs to name a few. In an industry where every inch of the market is being disputed, and every customer counts, businesses have to formulate new approaches in establishing customer retention programs.
When loyalty programs came about, they were a big hit on the market and the marketers since they’re something new. With customer loyalty in everyone’s mind nowadays, there will be a saturation of programs within a few years’ time. We foresee that these programs have very little differences with each other, and as a result, customers will be more difficult to please and participation in such programs will waver. Even though this might be the case, it can still be assured that loyalty programs will continue to rake in targeted participation; provided that the offers are attractive enough.
Management then needs to learn a very important lesson based on the environment: loyalty schemes have their own life cycles. At first, they might be very effective, but given a few months, or even weeks, they lose their initial momentum quite quickly as the customers become accustomed to the loyalty programs. The best way to adapt then is to innovate and venture into the untried and the unknown. There are three resources that you can tap to push for innovative customer loyalty ideas. These are your networks, data, and convergence.
Getting to know Your Customers to Maximize your Networks
If your loyalty programs are heavily reliant on customers with very specific needs; a very important point is to get to know who your customers are. These can be done thru analysis of your customers’ behavior. Take a look at your customer demographic. These can tell you quite a lot about how effective your programs are; and who’s engaging in them.
The next approach is getting feedback from your customers. Getting to know the reasons why customers are changing to another provider or service gives you a better and more unbiased perspective of how your products and services are viewed by your customers. Furthermore, you can also ask your customers what attracted them to your product and service. You can then craft your new loyalty programs with this analysis of customer behavior as the focal point.
Engage in Online Networks
With the dawn of the internet, and its apparent ability to reach out to millions with very minimal cost can also be the focal point of your retention programs. Membership webpages, blogs, Twitter, and Facebook accounts can provide you loyal customers, given that they contain specific and relevant content for your customer base.
Do not Lose the Human Touch
Though most of the marketing and loyalty programs today are done virtually, always remember to never lose the ‘human touch’ when it comes to establishing loyalty among your member base. You can gather loyalty to your product or service by getting friends, family, colleagues into your network. You can also hold members-only exclusive events or sponsor an event to draw potential customers in person.
Gather Data from your Customers
As mentioned above, get to know your customers and their behaviors. You can come up with loyalty programs that allow your customers to identify themselves and make the data gathering work easier for you. Consider loyalty programs for customers who want to make themselves known and testify for your products and service. This not only gives you more leverage when it comes to word-of-mouth, but it also provides you data on what’s working for you; so that you can capitalize on it.
Understand your most Valuable Clients
Get to know who your most valuable customers are. It is imperative for a business to know what percent of your customer demographic accounts for the highest percentage of your sales. By tapping into these resources and coming up with loyalty programs specifically targeting this demographic, you can further increase your foothold on your customer base.
Use different approaches to come up with Targeted Offers
As a business owner, you can also analyze your customers based on transactional and demographic data. Once given a blended approach to finding out what makes your customers tick; you can then come up with targeted offers that will maximize these customer groups. Furthermore, given this analysis of data, personalization of these loyalty programs will drive more relevance to your targeted demographic.
Forming Coalitions with the Big Players
If you are a smaller player in a very big field, where the biggest names play, you can also look at forming strategic partnerships with the most established players in the field. If you are given a chance to form coalitions you might consider these things first:
Coalitions: “What’s in it for you and your customers?”
Yes, it’s true that provided a chance to form coalitions, your customers would get better rewards and quicker turnarounds. There is also what we call the ‘acquisition effect.’ Forming coalitions would greatly benefit you and your partners and might leave most of your competition green with envy. Coalitions also works by getting more customers from sponsorships from the other partners. As a coalition, your goal is to make each other’s customers your own; therefore increasing the customer base, not only for you, but for your partners as well.
Another important benefit of forming strategic partnerships with the big brands is brand alignment. You get to align your products and services with different brands, preferably the most known ones. Always make sure to consider the other partners’ reputations. Given a reputable set of partners, aligning yourself with them will not only push your reputation due to association, but will also increase your customer base.
In the market today where the struggle to retain customers get fiercer and fiercer every day, customer loyalty can be maximized by utilizing your business’ three major resources: networks, customer data, and coalitions. Most importantly, in pushing for these customer retention programs one concept should always be put as the focal point of every loyalty program: innovation.