If all your marketing, promotion and advertising work perfectly, bring in new
day who love your service, quality and pricing so much that they became “regulars” who never
leave, you could skip the rest of this article.
Well, fantasyland is closed so you’ll have to continue reading about how loyalty programs can
keep existing customers coming back.
According to the Harvard Business Review, depending upon the industry, “acquiring a new
customer is anywhere from five to 25
times more expensive than retaining an
Not only that, how much more do you
think it costs trying to get back an
existing customer who leaves? Since
customers are the lifeblood of your
business, keeping them happy — a.k.a.
“loyal” — is a great investment of your
time and resources.
In some sense, everything you do in your business — CSR training, quality control, plant
maintenance, etc. — contributes to customer retention, but building loyalty involves a value
component, a reward for continuing patronage.
Yes, this is a “spend money to make more money” situation because special events don’t plan
themselves and direct mail pieces don’t have wings. Just keep in mind the following:
• Your generosity will be highly rewarded, usually in multiples of what you’re spending.
• Not everyone you send a reward to actually takes advantage of it (there are
members of my
family who have never used a coupon).
• And most important, the “perceived”
value of a reward may be more than the
“actual” value. For example, sending a
customer who spent $250 throughout the
year a $10 “Season’s Greetings” loyalty
postcard is a “real gift” to them but just
about a 5 percent reward, once you add in
design, printing and postage costs per piece.
A great way to start getting into “loyalty mode,” if you aren’t doing something already, is to
create a special event. The easiest theme that can be uniquely yours is a
“Anniversary/Customer Appreciation” celebration.
Whether it’s a day, week or month-long event, build it around a specific date that is
convenient for you and your staff to handle (if a customer tells you they
business opened in August but you’re celebrating in November, explain the logistical aspect,
take their photo and post on Instagram as your “Most Loyal Customer”).
Also, for milestone anniversaries with “0” or “5”at the end of the number of years, you may
want to make a bigger deal out of the event, perhaps getting your local chamber
and government representatives involved.
Do everything you can to make this event fun and rewarding for all your
since this should be an annual occurrence, keep track of what you do so you are
the years. Use in-store signage, social media, e-mail blasts and direct mail to
announce your big
event and what will be going on: refreshments; give-aways of branded merchandise
prizes, such as gift baskets of products from neighboring businesses;
owners; tours of the plant; and, of course, drawings.
For drawings, you can e-mail an entry form in addition to having forms at the
best to include “no purchase necessary” somewhere on it).
If you’re planning a longer event, pull winners daily for smaller amounts and “grand prizes” on
the culminating day.
If you want to be really generous, send a post-event “Everyone is a winner!” e-mail to all your
customers that they can bring in or show on their mobile device for $5 or $10 off or a 10
Tap the power of social media for your loyalty event, too. Take lots of photos
having a good time and winning gift certificates and prizes, then post on your
and on Instagram.
When you’re not around, train your staff to take photos of customers. Encourage your
customers to take photos with their CSR and post on Instagram and Facebook.
Another thing: identify your cleaners in the photos —make sure you and your staff are
wearing shirts with your logo on them and try to get signage with your business
name in the
The simplest loyalty perk is giving customers gift certificates for their
birthdays. (If you didn’t
ask people their birthday month the first time they came in, create a simple
form to capture the
pertinent information at the counter.)
I recommend mailing an actual birthday card during the month of their birthday — who
doesn’t open a birthday card! — or some other direct mail piece… and, if you don’t want to do it
in-house, there are plenty of outside resources available.
I like direct mail over e-mail as it is tangible and has longevity: a gift
certificate sitting on a
counter or attached to the fridge is a constant reminder of how great you are.
Sure, e-mailing is
cheaper, but e-mails are easily forgotten as they roll down a timeline, thus
purpose of the promotion!
To offer your customers a loyalty reward based on sales, your POS system is your
After you decide how frequently you want to reward your loyal customers, you’ll be able to filter
and generate mailing lists based on specific sales volume levels attained within
You should have a minimum sales amount so you don’t reward infrequent customers, then
establish different rewards per sales volume.
Of course, to simply see if this type of loyalty program works for you, just set
and send out one reward to qualifying customers; and, if you’re only going to do one reward per
year, good timing choices are your anniversary, as mentioned previously,
Thanksgiving, or the
Speaking of rewards, I’m a fan of “dollars off” without a minimum since these are your best
customers — that’s why they qualified for the reward and minimums won’t be an issue for them!
If you want to do a percentage, go with 50 percent off since you’re trying to create a “WOW”
You should probably write “Please bring in entire certificate” on the piece to keep people from
getting cute by photographing the certificate and trying to use from their
mobile device multiple
times (it happens!).
It’s good to track redemption to see the effectiveness of your loyalty rewards, so
barcode/QR code on the pieces to track on your POS, or go old-school by
collecting at the
counter when redeemed, then counting them. Keep track over time, too, to see if
the number of
qualifying loyalty customers goes up along with rates of redemption.
Once you start loyalty programs, customers will notice if you stop them. Since
you’re in this
business for the long haul, hopefully you’ll be replacing one program for another; explaining that
you’re “planning a new surprise” will usually satisfy an inquiring customer.
Loyalty programs keep customers happy and happy customers keep coming back!
customers are also the ones who become your “Referral Ambassadors” who tell everyone they
meet, “You won’t believe what I got in the mail today from my cleaner!”