How Loyal Are Your Customers?
Customer Loyalty Programs… Do they work? Are they worth the money? To both questions I answer yes, if executed properly. Customer loyalty programs, as with many sales promotions, are not “build it and they will come” and should never be expected to be an instant gratification sales promotion. When you think of loyalty, the words trust, confidence, and relationships should also come to mind. Trust is not something that comes easily these days, especially in sales and marketing. Consumers are now, more than ever, aware of their surroundings and the so-called tricks (and sometimes scams) that unethical marketers use to lure them into buying their products. Unfortunately, this is to the dismay of many ethical marketers who have good intentions of helping customers improve their life with their product or service.
The intent of customer loyalty programs is to build positive relationships with your customers. In turn, this relationship will help you, and the company you represent, become the preferred company that they choose to do business with. During a recession and weak economy, buying the lowest priced product seems like the easy answer. As marketers and sales professionals, it is our job to educate consumers about the long-term effects of buying on price rather than quality and superior service. Does the product with the lowest price offer an extended warranty or are they taking a risk of spending more money on the product or service if something should go wrong? Would your customer rather buy a product from a guy who lives in the van down by the river or would they be more confident in a product that their best friend, relative, or trusted business partner recommended? Business is not always about the bottom line dollar. It’s about building trust and relationships with your customers so they feel confident in buying from you and thus recommending your product or service to others. Trust and confidence are basic human emotions that we all feel and desire. Feelings are contagious and as human beings we are compelled to share good experiences and bad experiences with others.
Once a customer walks through your door or that initial sale is made, a certain expectation has been set. It is from that initial expectation that you must build upon. Building relationships and trust with your customer is the key to customer loyalty. To achieve that loyalty, customer loyalty programs or promotions must be implemented. Customer loyalty programs give customers that extra incentive to buy from you rather than your competition. And if your competition is offering a similar program you better make sure you have that “something special” that will make your customers want to do business with you and not the competition. That “something special” can be in just the smallest gestures that make your customer feel good, confident, and thus increasing that bond of trust. It can even be as simple as greeting a customer by name with a firm handshake when they enter your door. We are all human beings and want to be treated as such.
To build a successful customer loyalty program ask yourself the following questions:
1. What do your customers want? What do they seek and expect from you as a business and as an individual?
2. ROI (Return On Investment) – What can you give to your customers? What percentage of sales can you afford to give back in order to receive the same or more in return?
3. Keep Market Share – What is your competition doing or not doing? Can you afford to give that little something extra to keep your customers business? Can you afford NOT to give that something extra to keep their business? What else can you offer that the completion can’t or won’t?
4. Exceed Expectations– As I mentioned earlier, you’ve already set the expectations. So now what added service or gesture can you offer that will exceed their expectations? Giving your customers what they ask for is the first step, but what can you give them that they never thought to ask for?
5. Top of Mind Awareness – Will you and your brand be remembered as a result of this program and will customers refer others to you as a result of this program?
Of course, all customer loyalty programs take a good deal of time in planning and execution. But the relationships you build as a result will be well worth the effort.
One popular quote that I’ve always disagreed with is “It’s not personal, it’s business.”
I believe that business is personal. It’s personal to the customer looking for your product or service, and it’s personal to the business owner who has the responsibility of keeping employees paid. It’s personal to employees who work hard to make a living and provide for their families. It’s personal to the customer who puts their trust in a business to “do the right thing” should a product or service not meet their expectations. With the overwhelming competition and multitude of channels of distribution available, trust and customer loyalty is now more important than ever. Maybe the phrase should be “If it’s not personal, there is no business”.
Heather Hosterman is the marketing coordinator for Mid-City Supply Co., Inc., headquartered in Elkhart, Indiana and can be reached at hhosterman@mid-city.com or you can follow her on Twitter at @HHosterman.
Any opinions expressed in this article are not necessarily of Mid-City Supply Co., Inc. or its officers.
