Customer loyalty programs have been around for a long time. It is often necessary for businesses in competitive industries to reward their most loyal customers as a means of retaining them. Examples of time-tested customer loyalty programs range from the frequent flyer miles offered by airlines to coupons from grocery stores. Over time, customers have come to expect these little tokens of appreciation from businesses and many use them to help make buying decisions. A customer loyalty program can therefore be an important tool for brand-building and for developing your company. Below are five suggestions that can help you to reward your customers and keep them coming back.
- Offer Premium Services
By some estimates, regular customers are several times more valuable to a business when compared to their other customers. If your business gets most of its revenue from a few regulars, it is a good idea to reward them with special privileges and exclusive perks. These allow them to feel special and like they have a stake in your business. This feeling of ownership can keep them coming back. The ability to move up in service level via loyalty is another powerful incentive award for sticking with your brand.
- Remember Your Customers
One common element of effective rewards programs involves keeping track of what customers like. This allows a business to provide personalized service to their most loyal customers. Customers are likely to remember a business that caters to their specific needs and where they are recognized and appreciated. They will have positive feelings towards your brand, which can help to spur return business and keep them from going to your competitors.
- Offer Rewards for Referrals
Customers who help your business by bringing in more business are especially valuable. Word of mouth is arguably the best advertising tool in existence. Most individuals trust the people they know far more than they will any advertisement. A reward in the form of a prepaid debit card or other prize may motivate your customers to talk to about your business to their friends and acquaintances.
- Offer Discounts
Most customers like to save money, which makes discounts a very versatile tool for rewarding both your newcomers and your regulars. When discounts are offered specifically to reward loyalty, they can help to keep longtime customers from drifting to competitors. In some businesses, it is possible to offer a loyalty-based discount at the outset; for example, a business may offer a discount to customers who sign up for a service that will last for a certain amount of time. They may also offer a discount in the form of a rebate that is delivered via a prepaid debit card.
- Give Gifts and Prizes
Discounts are a popular customer reward and they do help to create positive feelings toward your business, but those feelings may be fleeting. Once the customer uses their discount, it is easily forgotten. On the other hand, a prepaid debit card or other tangible prize may keep your brand in memory for longer.
Some experts argue that rewards should only be used to bring in new customers, not as rewards for loyal customers. The argument is that loyal customers do not need incentives since have already shown that they like the brand. However, customer retention is as important as bringing in new business; it is important to adopt a balanced approach and to provide rewards for loyalty as well as for signing up. The method of rewarding customers that you use should be chosen based on your type of business and your circumstances; not all methods are suitable for all businesses.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.