Incentive - November 2008 - (Page 30)

PRIMER C o n s u m e r L o y a l t y Pro g r a m s Do ’s a n d Do n ’ t s By Jeff Lipp ith the dismal economy on the minds of consumers and businesspeople alike, it seems that everyone is talking about how to save money, where to find deals and what you can do to help increase the bottom line. Consumers are looking to pinch pennies wherever possible, as merchants, both large and small, look to retain customers and remain profitable. While these can seem like competing goals, there is a solution that allows businesses to drive sales while still saving their hard-won customers a little cash: loyalty programs. Strategic loyalty marketing programs allow a business to understand and analyze customer behavior, identify the most profitable segments and influence purchasing patterns by offering personalized, meaningful rewards. When executed successfully, a rewards program increases brand loyalty and profitability, creates goodwill, helps drive repeat visits from current customers and attracts new patrons—all while saving consumers measurable amounts of money. Loyalty programs are common across industries from retail and foodservice to travel and hospitality. However, not all rewards programs are created equal; some programs can discourage new customers by making them feel excluded, while others are viewed as a scam. The best provide ease-of-use, transparency and noticeable savings to the public, while offering businesses vital information about their customers. The following tips will help you find a customer retention program that encompasses all these goals. W is the CEO of Chockstone Inc., a loyalty marketing and technology provider that enables merchants to change customer behavior to increase profitability. Jeff can be reached at jlipp@chockstone.com. Jeff Lipp incentives should be redeemable at the point of sale or be simple for consumers to cash in later. DO: Remember that the biggest key to loyal customers is an excellent product or service. Make sure that you are offering the best experience possible in terms of price, customer service and quality, as these will go far in creating brand loyalty. DON’T: Enter blindly into a loyalty program. Take into consideration whether the rewards program you are considering will enhance your brand and your company’s value proposition. Partnering with a reputable loyalty marketing firm can help you avoid unwanted surprises, because they work with your business to estimate consumer participation, results and ROI ahead of time. DO: Make discounts and rewards easy to redeem, and offer your customers a central location for learning more. Certain industries, like airlines with their blackout dates, are known for causing headaches for the very customers they are trying to reward. In addition, they make finding the information on the program difficult. Transparency is paramount to success; promotions and DON’T: Get stuck in a rut. Evolving your promotions encourages customers to try new offerings. Identify what’s working, and expand your program from there. Providing choices and options keeps your patrons engaged and increases the likelihood that they’ll become repeat visitors. DO: Stay in touch with your customers, but don’t spam them. Asking for important information, such as e-mail addresses and birthdays, when registering users ensures that you can remain in regular contact and send offers that are personalized and targeted. Communicate only when the customized offer or information is timely. Remember that loyalty to a brand is built over time. A good rewards program should be seen as a long-term initiative to build brand awareness, create a dedicated customer base and ensure future profitability. Armed with the proper knowledge and tools, a company can implement a loyalty program fairly simply. At a time when consumers are watching their wallets, yet are barraged with seemingly endless purchasing choices, loyalty marketing programs may be more important than ever for your business. I 30 | Incentive | November 2008 | incentivemag.com Illustration: Katharine Sandalls http://www.incentivemag.com

Table of Contents Feed for the Digital Edition of Incentive - November 2008

Incentive - November 2008 Editor’s Note Headlines Cover Story: Pop, Fizz! Incentive Interview Cracking the Recognition Code Primer Travel News Canada, City Style Potentials Here and Now Cameras: Picture of Innovation The Spirit of Giving Advertiser Index Last Word

Incentive - November 2008

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