You Might Need a Loyalty Program If. . . 3 Signs to Keep in Mind
You don’t necessarily need to channel your inner Jeff Foxworthy, but as marketers, there are some telltale signs to look out for. And if at least one of these signs applies to you, a loyalty program might help. Here are 3 signs, or at least strong indicators:
- You are competing in a “sea of sameness”: OK well maybe not that extreme, but if your product or service is or is at high risk of being perceived as a commodity, or very similar to competitors, in addition to adding features or benefits that differentiate you, adding a loyalty program can give you an edge. Don’t buy it? Look at the airline, hotel, rental car, and specialty retail industries or that little coffee company in Seattle for inspiration. While a loyalty program alone won’t truly differentiate you, for countless industries and consumers, a strong loyalty program is the “tie-breaker” at that moment of truth.
- Your “Leaky Bucket” looks more like a sieve: We’ve all heard the analogy that companies are always losing customers, so to maintain or build share, we have to keep that “bucket full” with new customers at a faster rate than we’re losing them. If you’re losing customers faster than you can plug the holes or replace them, it may be helpful to focus on retaining and delighting more of your existing base. Most would agree, that retaining and increasing your existing customer’s share of wallet is far less costly and more rewarding financially than a hyper-focused acquisition at all costs philosophy. Obviously, acquisition is critical to any organization; however, allocating a portion of your marketing budget toward a loyalty solution can help drive retention and maximize customer lifetime value, while plugging more holes in that bucket. Pretty soon, who knows, maybe you’ll need a bigger bucket.
- You know next to nothing about your customers: Do you know your customers? I mean do you really know your customers? Many companies preach at the altar of personalization, but to deliver that holy grail of customer engagement, you need solid and ongoing insights into individual, 1:1 customer behavior. What are they buying, not buying, how frequently, in what combinations with your other products and/or services? How can I tell when they are beginning to lapse or perhaps have more to give? Do you have a robust customer database that is continuously updated with their latest purchases and behaviors to tailor your messaging, engagement, and offers? A loyalty program establishes that 1:1 connection that enables these personalized engagements and provides the platform from which you can profitably grow your customer relationships.
These are just a few of the major symptoms that indicate some form of loyalty program may be right for you. It’s also important to note that a “loyalty program” doesn’t always mean a points program or other “structured loyalty”. The key is in establishing and nurturing that individual relationship with your customers and building upon it. If you’re interested in seeing if a loyalty program makes sense for your organization, reach out to us here at Brierley and we’d be happy to explore options further with you.
Brierley offers a range of strategy and consumer insight services that can help organizations assess their current loyalty capabilities and customize a loyalty solution that maximizes customer engagement and lifetime value. To learn more, contact us or call 214-743-5454.