Is Your Customer Loyalty Program Following the Trend?

Amer­i­can Express per­formed a sur­vey, where results dis­cov­ered “seven in ten Amer­i­cans (70%) are will­ing to spend an aver­age of 13% more with com­pa­nies they believe pro­vide excel­lent cus­tomer ser­vice.” Many com­pa­nies use Cus­tomer Loy­alty Pro­grams as a way to cater to their best cus­tomers, and to offer new cus­tomers a rea­son to come back.

Cus­tomer Loy­alty Pro­grams have become a pop­u­lar way to fre­quently, instantly and con­ve­niently reward your cus­tomers. Pro­grams in all types of for­mats exist—we are all a mem­ber of one or another—from cof­fee house punch cards to fre­quent flyer miles. Increas­ing your cus­tomers’ loy­alty will yield your com­pany profit over time, will cre­ate a fol­low­ing of fans who turn into brand advo­cates, and will be less expen­sive than start­ing a new cus­tomer acqui­si­tion program.

…what can you do to boost per­for­mance? Here are a few pro­gres­sive ideas:

• Have you heard of “arti­fi­cial advance­ment?” Two con­sumer researchers con­ducted a cus­tomer loy­alty exper­i­ment at a local car wash, giv­ing half of the 300 loy­alty card-holders an 8-punch card, and the other half a 10-punch card with 2 head-start punches (same con­cept with an arti­fi­cial advance­ment: 8 washes = free wash). The head-start card-holders had a 34% suc­cess rate! Long story short? Offer your cus­tomers endowed progress when they join, or dur­ing spe­cial times of the week or month.
• What other options can you pro­vide a cus­tomer, other than dis­counts, points, or free prod­ucts after pur­chases? Patag­o­nia, an environmentally-friendly out­door cloth­ing com­pany, started the Com­mon Threads Ini­tia­tive, where their cur­rent cus­tomers can resell their gen­tly used Patag­o­nia gear online through the com­pany web­site (pow­ered by an eBay engine). Not only do cus­tomers have an easy way to resell their unused apparel, but they are assist­ing in the company’s ini­tia­tive to decrease their car­bon foot­print. This type of loy­alty pro­gram is deeply engaged into the cus­tomer expe­ri­ence ver­sus just giv­ing your cus­tomer rewards for stay­ing loyal.
• Punchh, a Cal­i­for­nia based soft­ware com­pany, invented a vir­tual punch card that brings that ‘old school’ notion into the tech­nol­ogy age, where cus­tomers who down­load a Punchh app from par­tic­i­pat­ing ven­dors receive vir­tual card punches for bring­ing refer­rals in to the ven­dor, and for post­ing reviews on social media net­works. And of course cus­tomers receive “punch­hes” for repeat business.

In short, that there are many ways to dream up inno­v­a­tive Cus­tomer Loy­alty Pro­grams. In sim­ple terms, focus on the fol­low­ing while cre­at­ing and imple­ment­ing your Cus­tomer Loy­alty Program:

• Con­sider the customer’s expe­ri­ence, not just their purchase
• Offer dif­fer­ent ways for your cus­tomers to be loyal – punch cards may be still be in use, but so are mobile apps, for example
• Remem­ber the KISS method: Keep it Short & Sim­ple (sure, there may be another acronym for this but for today’s blog we’ll use this one)… Loy­alty pro­grams that are easy to fol­low and use are bet­ter for consumers.