Meet Your Customers Via Loyalty


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Every day, operators are contemplating the pros and cons of introducing a customer loyalty program. Customer loyalty programs have been the buzz of the industry for the past several years, and those of you without a program probably continue to ask the same questions as your peers and your competitors: Are we too small? Are we too big? Is there a program out there for me? The high-level answer is this: Loyalty programs can work no matter your size, but there are several questions you should ask yourself before you decide on going all in.

Do you really know your customers? Before you go through the meticulous exercise of performing due due diligence, examine your objective for wanting a customer loyalty program. Typically, the reason companies initiate a customer loyalty program is to have the tools and means to identify, motivate and reward their customers. You may think you know your customers, but I would challenge that you don’t. If you’re lucky, you many know the names of some of your customers, but you don’t know their address, cell phone number, e-mail address or their Twitter name. You definitely don’t know how often they shop your store, what they buy and their average transaction size. You also don’t know what’s in their shopping cart and if they only buy fuel.

How can you really know your customers and properly market to them if you don’t understand what they’re buying? How well do you really know your customers if you can’t contact of communicate with them? Loyalty programs provide you with the knowledge and intelligence needed to truly understand your customers’ spending habits. In time, you can segment your customers, market to them and aim to change their purchasing behavior while loyalty transactions become more profitable transactions for your business.

Start With the Basics
If you think you’ll like the benefits of what a loyalty program can deliver, see how you’ll fare after evaluation these seven loyalty qualifiers:

L: Look at your physical location(s) to ensure you are positioned for success.
O: Open your Rolodex of vendors/suppliers. Contact them to see if they’ll support your initiative.
Y: Yes, total company buy-in is a must. Obtain buy-in from the CEO down.
A: Align yourself with a loyalty provider that will support your goals and initiatives.
L: Leverage the relationship with your point-of-sale manufacturer, and ask what loyalty solutions are available through your existing hardware.
T: Take the necessary time to plan for employee training. Proper training will lead to success.
Y: Yesterday’s marketing methods are obsolete for loyalty programs. A new marketing mindset is vital to the success of your loyalty program.

The beauty of initiating a loyalty program is that you can design it based on your budget and business objectives. Basic loyalty programs include an electronic version of the “punch card,” and elaborate programs permit customers to accumulate points for every purchase made. Once the customer reaches a threshold of points, various redemption options become available. Many companies often start out with the basic functionality and increase program benefits over time.

So why provide incentives or rewards to begin with? The reason is simple: to gain additional market share through repeat business. If the consumer knows that each purchase made gets him closer to a reward, he will think twice about patronizing your competitor.

The devil is in the details on how integrated, innovative or inventive you want to be with your program. It’s all about how bad you want to gain market share, and how hard you want to work at retaining your customer base. If you have one location or 10,000 locations, administering a customer loyalty program comes down to outsmarting and outthinking your competitors. Your ROI comes back in the form of repeat business from repeat customers.


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