5 Rules for Loyalty Marketing

Building customer loyalty enhances company brand while increasing revenues in a steady manner. Unlike one time sales events or other short-term promotions, a loyalty program can create constant sales and build a barrier between you and your competitors. Below are a few of the basic components of any well-developed loyalty program.

1. Customers will provide personal information for a reward

A recent study showed that 82 percent of online consumers would provide personal information for a chance of winning a $100. 61 percent gave e-mail addresses, 49 percent full names and approximately 20 percent gave financial information and telephone numbers. The trick is to offer a reward that both benefits the customer and the company. For example, patrons that use restaurant coupons usually spend more than if they did not have a coupon.

2. Personalize communications

When communicating with the customer always personalize the message with at least a name. If possible offering products that are within the profile of that buyer. The most sophisticated loyalty system automatically ties products together targeting the buyers profile. Amazon is a good example. Customers often receive an e-mail about a book about a subject they have an interest in.

3. Build member status and customer value

Create status of the member by developing a program, which ranks the consumers discount level. What value does the customer receive when they purchase your product or service? The value should be clear and well stated to the customer. Give the consumer pride and financial benefit in purchasing from your company. If a tiered program is too complicated for your company at least provide “membership” to your store. Provide special customer status and treatment for those that are members. Acknowledge the loyal customer by discounting shipping, etc. You may think that the company may lose money but the opposite happens. This is because of the 80 / 20 rule. 80 percent of your revenues often come from 20 percent of your customers. Always be aware of how you treat the 20 percent.

4. Community = Ownership = Loyalty

Most people get jobs from people they know not from a newspaper ad. The same is true in building loyalty. Think of your customers as a community not a customer base. In a community all participate and share in the outcome. Ownership is a very powerful tool in building loyalty and brand recognition. For example, this year Mars company had a campaign to promote M&M’s. Customers voted on a new M&M color. You can bet the company will use the e-mail addresses they collected for follow-up e-mails. Other companies have had campaigns to name products and / or design product packaging. Try to involve your customers in your product and service offerings.

5. Program metrics

Every program needs goals to measure success and growth opportunities. Make your goals clear and easily measurable. Have your sales team “sign-off” on the goals to make sure they are reasonable. Track your results and adjust the program and the goals, so they are attainable.

Greg Ahern
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Author: Greg Ahern

Greg Ahern Founder and President of OmetricsĀ® is a fanatic about conversion rate optimization and AI chatbots. Greg has been a successful Internet entrepreneur since 1994. He speaks at conferences and webinars and has built a number of internet businesses. You can follow Greg on Twitter @gregahern and join his CRO Hacks Groups on Facebook and Slack. When he is not in front of a computer he can be found unplugged with his family, drawing or sculpting, endlessly learning guitar or running around in the mountains biking, climbing and skiing.