In this week’s article I wanted to discuss ways in which we reward loyalty within our businesses and what works and what doesn’t.
It Starts With Data.
Many businesses I work with find that when they commit to customer loyalty research that they do not in fact have data to hand over before the research calls can take place. In some instances, they may take a few months to prepare data for handover. You need to know who your customers are and their contact details, a simple process at the beginning of any relationship. Harder for businesses that have thousands of customers with low average value, that’s where having a membership program works well
Maintaining up to date data is critical to our businesses. It’s just such a valuable resource to know who your customers are and what products or services they use.
How else can we reward loyalty in a genuine way. How are you collecting and maintaining up to date data in your business?
How can you use that data to reward and acknowledge customers?
Reward Loyalty In The Right Way!
If we choose to reward our loyal customers it’s important to reward them in the right way. We can’t be strategic about it. The acknowledgement needs to be genuine. I recently heard of one hospitality company who gives a birthday voucher to their members. Sounds nice, right. The problem is that they have been so strategic in how and by when the voucher can be used that a very small percentage of their members use them. It’s just too hard.
There are too many rules associated with the use, intention in the background is clearly to get something more from their members rather than a genuine acknowledgement.
I am sure their members would much prefer to receive a birthday voucher that allows them to spend $30 as they wish.
The impact of the strategy behind their voucher has a huge negative impact. Members questioning the rules and employees having to handle these questions and complaints. Why make it all so difficult?
Like with gift cards, they now come with an unlimited expiry date. Because there was so much negative feedback about it that the government changed the law and said you can no longer add an expiry date because they knew quite a large percentage of customers never used their gift cards.
Loyalty Cards
Many companies offer loyalty cards, and the number one reason is about the accumulation of customer data. For example, all contact details like first and last name, email address, address, date of birth, spending behaviours, repeat business, and demographic.
Loyalty cards provide up to date and well-maintained data.
Again, there are some Loyalty cards that are worth having and others…. well, I find they just do not add value to my life now.
Like Flybys. I am not involved with Flybys because I’m never going to raise enough points to get the benefit. Whereas I do have the Everyday Rewards because I spend X amount and receive the benefit repeatedly as my points accumulate. And as my regular readers will know, I like the significant benefits that come with both hotel and airline memberships.
It’s also the simple things, like my local coffee shop that gives you a coffee card. By 10, get one free.
Rewards don’t always have to be financial.
Every one of our clients would argue that it’s about the feeling that you get when you buy their product or service.
It’s not always about giving people things.
The restaurants that I work with generally sit in the 300 – 500 covers per night range. We used to ask customers when they came in and if you didn’t recognize them, have you been here before?
We found by doing research and speaking to many of our clients’ customers we would get some negative feedback from customers who are regulars, because they didn’t feel recognised, and they felt disappointed. They would say things like, I come here every week. But of course, a new staff member doesn’t know that.
We realized we were asking the wrong question. So, we’ve changed the script to ask, ‘when was the last time you were here?’ and we haven’t had any complaints. If they came yesterday, they say ‘obviously you are a “frequent flyer” and acknowledge them.
If it is their first time, then we as we take them to the table, we explain how the whole restaurant operates, the table service or how to get a drink at the bar, how to order meals etc.
If they had been there before, when we walk them to the table, we talk to them, and we’re just generally chatting.
The bottom line for me personally is that it is nice to honour membership discounts, senior discounts, trade discounts etc., my general rule is,
“Don’t discount, add Value!”
If you add value, you get full margin on the higher margin product and when you add a drink or dessert it occurs as added value and is appreciated, yet it doesn’t hit so hard on your bottom line.
You see these quite a bit with 50% of second item or you get a shirt at a discount with your suit.
What makes you feel valued?
Need more information? Have a look through my previous Blogs, located on The Loyalty Zone website or contact me, I look forward to hearing from you.
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If someone has forwarded you this email, you are welcome to join The Loyalty Conversation, I appreciate your commitment to the conversation.
Warm Regards,
Craig Cherry