02 Oct
Almost any business in any sector can run a loyalty program and elaborate on repeat business. The benefits and rewards from focusing on your existing customers as opposed to only focusing on gaining new business are many – and it’s an area you should not ignore. Did you know, on average, customers who have bought from you before, are more than twice as likely to buy a second time than someone who has never bought from you? This means – your existing customers are low hanging fruit and relatively easy to sell to. So what type of loyalty program can your business run?
There are as many types as there are customers. Choose how you want to reward customers first. An instore-voucher is always a good idea. This can be a percentage discount or a cash discount. These are great because they make it highly likely the person returns to you. If you make them transferable they can also be a great way of getting new business – the recipient can give it to a friend recommending you. What’s more, an in-store voucher is very rarely used at its value. A person with a £10 voucher is unlikely to limit his or her purchase to the value of the voucher, rather they are likely to use the voucher as part of a purchase bigger than they would normally make. Or, forget to use it completely.
Another popular approach is to give away a freebie. We all know the free coffee/hot drink tactic. For low-cost, high frequency items this can work a treat. And as with the in-store voucher, is the user likely to include the value of the voucher in a bigger purchase. Psychologically, we are prone to treating ourselves to something extra when we are getting something for free. That muffin seems very cheap when your coffee is free, doesn’t it?
A cumulative approach is another option. Let your customers earn points based on their spend, and set up rewards at varying levels. The psychological effect her is tremendous – the rewards do not have to be high value; what’s more is people are usually tempted to up their overall spend if there’s a freebie included.
If you already run a loyalty program, but it feels stale and old – sit down and have a think. How can you make it more exciting for customers? What rewards can you offer that will make customers eager to earn their points? Each approach has its strong points – choose the one that suits your business and your customers.
