What price loyalty?

How many loyalty cards have you got in your purse? Probably quite a few and, if you use them to their full potential, I expect you have the means to save quite a bit of money one way or another. But do you really appreciate their value? They are costing the provider when you use it, you are effectively spending their money instead of yours after all - even if you are just claiming a free coffee for every 8 you paid for, the coffee shop is standing the cost of your free one. Isn't that nice? And doesn't it make you go back in there to get another stamp, and maybe take a friend there and buy them coffee so you get two stamps? That is basically how it works - you take your repeat business somewhere and they reward you with a free treat or money back or another benefit that you don't enjoy elsewhere.

So, could a loyalty card work for your business? See how many of the following questions you answer YES to:

1. Do you have a product or service that can be purchased on more than one occasion?
2. Do you attract new business by referral? e.g. do your existing customers recommend you to others?
3. Do you sell product online or in a "bricks and mortar" shop?
4. Does your product have a shelf-life, use by date, regular or seasonal use?
5. Do you send out mailings or other offers to your existing customers?
6. Would you like to be able to stay in contact with customers after they leave your premises or your website?
7. Do you keep a record of your customers details and/or the types of items they buy?
8. Would you like to learn more about your customers spending habits and/or ask them for feedback?

If you answered YES to any of the above then chances are that if you provided a loyalty card with a first purchase you could have tapped into a way to get people coming back to you again and again. If you have an online store then there are lots of ways you can offer promo codes, member-only access areas that require a sign in and ways to record the "points" accrued. Clearly you need to discuss that with your web developer (not a printer!).

For a really tiny amount of money you can produce handy sized printed cards that include space for someone to write their name and address (when they hand in the completed one). Space to record a "stamp" or verify a purchase has taken place. Room for your own details and maybe even another product suggestion or image to tempt them back. As the High Street has to work even harder to beat off online competition, a loyalty card is a great way to humanise your contact with customers and spend just a little bit more time in conversation with them. So for answering those 8 questions, here are 8 little ideas for you to consider:

1. Offer a reward that is larger than the qualifying purchase - always try and trade them UP to the next level with the free one rather than just giving them the same for free, or try to add something to it. That way, they feel more rewarded and you might just introduce them to something they hadn't tried before. 
2. Name your loyalty card something that makes the bearer feel special or privileged, not just loyal. (even my dog is loyal). So use words like VIP or Elite or Club or a word that gives a sense of belonging to something. Maybe even have a scale of membership that relates to their level of spend - silver, gold, platinum, etc.
3. Make the reward fit the spend and take care to cost out your offer thoroughly. You could start with a "limited" offer - this is attractive in two ways as it makes people want to be first or in time to get it and it also gives you the chance to retract or change it if it becomes a victim of its own success.
4. Always make sure that when the time to redeem the reward comes you get a follow up opportunity out of it. So, I complete my full card after a requisite number of treatments in a salon and then get a free or half price one, then what? I get to walk away? No, I get another card or a better one next time and I have to hand my completed one in with some detail filled in - maybe my contact info or a vote for a favourite product.
5. Use the data or feedback that you capture from your loyalty cards to keep your news offers relevant and attractive. Tell people when they take a card that you have other offers so they might want to check out your website or sign up for a newsletter or take our brochure or follow us on Facebook, whichever works for you.
6. Always look for an extra opportunity to engage. It takes only a few seconds more at the till for someone to get the card stamped but you can take that time to chat with them, ask them a question or suggest something else they might like to try. It is all part of building a rapport with your customers - when people show an interest in us we usually respond positively.
7. Leave loyalty cards out where people can pick them up easily or read about it, maybe while they wait to be served. If you offer rewards make sure it is advertised up front, it could help someone decide whether to come into your shop instead of the one next door.
8. Loyalty cards are not just for retailers either, companies that offer services can have loyalty schemes too. If you have a disposable product that has to be purchased regularly then you could insert a coupon to collect into the pack or print it on the packaging. You might offer gift vouchers or money off product/services to regular customers and create a loyalty club where they can access certain extra benefits. Or just use your packaging or receipt to include a token to be collected that can be redeemed once a certain number have been saved.

Above all loyalty is a two-way street. You need to be happy to give a little of your profit away in order to ensure that people keep on coming back to you. The client is happy to return because they feel valued and get something out of the experience. As long as you don't leave it open to abuse (so you end up out of pocket) or make the reward too hard to achieve (so the customer gets bored) then everyone is a winner.

You can use all kinds of subtle ways to train your customers behaviour and affect buying patterns in a way that profits you in the long run, just make sure you are encouraging the sort of loyalty that you want, not just giving things away for the sake of it.

Ideally it needs to be something you can maintain long term too so that withdrawing it does not have any negative affects. Let's face it, my dog is loyal but I know it is only because I keep on giving him treats!

There really are too many ideas for one little blog so if you want to talk to me about how rewards and incentives could boost your business just call 0116 255 4336 or email claire@fullsquare.net

Claire McFadden