If you’re looking at ways to encourage customer loyalty to your business, a loyalty scheme could be a solution for ensuring your customers return to you regularly. Who hasn’t picked up a loyalty card from a coffee shop and looked forward to the free coffee on the 10th visit?! It’s a great way to encourage loyalty to you over your competitors, but you need to get it right.
Here’s how to implement a successful loyalty strategy in six steps:
Step 1: Decide if a loyalty strategy is right for you
You understand the benefits of a loyalty program, but is this the right move for your business? Before going any further with your loyalty strategy you need to ensure the answer is a resounding YES!
There’s a few key points to consider:
- Do you offer a product that is purchased regularly?
- Do you have customers that float between buying from you and another company?
- Can you afford to offer a reasonable loyalty bonus to make it worth the customers while without damaging your margins?
- Can you deliver on your loyalty promise?
If you answer no to any of these questions, this might not be the right direction for you.
If your customers are already loyal as your product is unique, you may not need this. And, if it is not cost-effective and you can’t deliver what you’ve promised, don’t do it. It would be damaging to both you and your customers.
Step 2: Define your target audience
There is no point spending money on your loyalty strategy until you know who you’re targeting with your loyalty scheme. You’ll waste time and money if you don’t really define who your audience is.
Think about:
- How old are they?
- What gender are they?
- What are their hobbies?
- Where do they live?
- What is their income?
Once you’ve created your audience avatar (you might have more than one and that’s OK), you can tailor your letters and loyalty material to them. This will help you to connect to your audience and increase the take up of your loyalty scheme.
Step 3: What is your customer offer?
Now, there are several options on what you can offer your customers for their loyalty.
Here’s a few suggestions:
- A free service or product after they have bought so many times before
- A free gift with their purchases
- Free delivery on their orders
- A loyalty discount on each purchase
- A VIP waiting area with free drinks
The choice is yours! What you do need to consider is what can you afford to offer without your profits taking a hit, and how much do you need to offer to keep those customers loyal?
There is no need to offer the earth if your customers would be happy with a free doughnut when they visited you. The loyalty scheme is there to improve your profit margins, and often, a little will go a long way. Just a nod to your customers that you recognise and are grateful for their continued custom. Remember your target audience? What speaks to them and is affordable for you? What will they tell their friends about you and your business?
Step 4: Create Your Loyalty System
Once you know your target audience and have worked out the best reward for your loyal customers, it’s time to put your new loyalty system into action.
Firstly, make sure it’s clear how they earn their loyalty reward. This could be by:
- Clocking up a number of visits/purchases – e.g. one free after your 10th purchase
- Build credits or points with each purchase – e.g. 1 point for every £10 spent
- Given with their purchase – e.g. free drink when they visit, or free delivery
- Send them gifts as a thank you – e.g. once a month all loyalty members receive a gift card
Secondly, make sure you’ve got all the bases covered to ensure your customers know about your loyalty programme:
- Brief your team! You need to make sure everyone of your staff knows about the scheme and how they are to promote it. This could be asking every customer if they have a loyalty card, and offering to sign them up if they haven’t. Make sure they know the benefits to the customer, you may even want to incentivise them – a reward for signing up 10 new loyal customers!
- Make sure your offer is generous enough to convert customers into loyal customers. If your offer isn’t strong enough then it may not be worth all the work to implement it.
- Follow up with your loyal customers. Once they’ve signed up don’t just assume that’s it. Keep asking if they are members, encourage them to keep buying by reminding them how close they are to receiving that loyalty reward, it will keep them coming back!
Step 5: Introducing Your Loyalty Strategy
Now you and your team are ready to put your loyalty strategy into action, decide exactly when you are going to offer it to your customers.
It might be that on their first visit you tell them about the loyalty program. This can work with something like a frequent buyer reward. Be careful not to pitch this to them as a way of thanking them for their loyal custom…if they’ve not been to your before this won’t make sense! Pitch it as a reward for continuing to come again in the future.
If you decide to wait until you’ve seen them a couple of times, this is when you can make them feel more of a VIP. Pitch it as their reward for coming back to you, a thank you for continuing to return as a customer.
Step 6: Run Through Your Loyalty Strategy Checklist
You’ve ticked all of the above steps and are ready to launch your loyalty strategy! Here’s the final checklist to ensure your loyalty scheme gets off to a great start:
- Team training – make sure all your team are ready. They know what the offer is, who to approach with the offer, and what to tell the customer.
- Check stock and make sure you are ready to deliver on your promise! It would be embarrassing to offer a reward only to find you didn’t order enough of the reward and can’t see it through. Be ready for this to work!
- Make sure your product, service, and customer experience is the best it can be. At the end of the day, no amount of loyalty will help you if you fall down in these areas.
