Today’s economy shows that money defines customer loyalty. In the 2010 Retail Loyalty Index, low prices and discounts for groceries, personal care, department stores, and specialty stores ranked highest when polled for consumer loyalty, however the quality of customer service still ranked as important. Discount store Wal-Mart consistently scored high marks and took high honors in most parts of the US for groceries, personal care, and department store loyalties.
Customer service, store environment, and having a wide selection of merchandise have significant impact, but low prices still attract the most customers. So how do companies maintain customer loyalty? It all starts at the beginning with better service and a wider product selection. Customer loyalty programs offering coupons and sales make consumers feel special, and loyalty programs using customer data to personalize savings keeps consumers coming back. For instance, CVS uses loyalty cards that track specific purchases and offers cash off or reduced prices on future customer purchases. The more a customer spends, the more cash back incentives and rewards are printed on their sales receipts.
The incentive programs to lure in more customers and retain loyalty does have some obvious pitfalls that can make them backfire. Customers complain about loyalty programs too, so one might want to consider some of the biggest complaints. About 30% of customers see no value in becoming loyalty members because they say the program lacks substance, and they get no promised personal attention. There are complaints about too much spam and junk e-mails jamming up mailboxes. Some rewards offered through loyalty programs lack any real value, while others the real value of the reward is jacked up and not worth the wait or the money. Still more consumers complain about how hard it is to redeem points and rewards.
Most stores offer nothing to engage loyal customers, and in today’s market if there isn’t some kind of loyalty or reward program that offers discounts, free products, and relevant values, the customer is going to be lured away with a company that has taken the time to be innovative. In order to be successful retaining customer loyalty through some of the reward programs must effectively measure market value and collect customer data to target their market. Giving the customer better and customized service to accompany the rewards programs and making it all so much user-friendly can keep those customers content and feeling appreciated.
photo credit: USACE Europe District
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