As small businesses look at how to keep customers coming back, they commonly implement a reward program, frequency marketing progam, or other "special bargain" to encourage customers to buy more, so the company will reach it's purchasing benchmarks.
These kinds of programs can be highly effective short-term tactics, but they don't always have any lasting capability. Customers will swiftly change loyalties if a competitor comes up with a similar or better program. Additionally, customers are no longer so easily impressed with the whole idea of a reward program.
How Can Your Company Make a Reward Program More Effective?
One thing you can do is individualize the reward structure. This means establishing different thresholds and making each customer aware of his or her position with respect to obtaining the reward.
A drycleaning customer will have little incentive to increase loyalty if he or she needs to clean 20 more items before earning free drycleaning for an item of choice. However, the customer may consider bringing in five items at a time for a 15% discount on the fee. Do that four times and...there they have their free drycleaning certificate! A similar thing you could do to keep your customers coming back is give them a Frequent Buyer Card. Or, offer a free gift to a customer if his or her purchases in the next three months exceeds his or her purchases in the last three months.
What Does Your Customer Really Need?
It's just as important to find out what your customer needs as it is to establish a relationship with that customer. For example, a catalogue company might get patrons to join its "members only program" by selecting a free gift. There would be a number of different choices available, designed to appeal to the different tastes and needs of different customers.
The gift that the customer chooses provides valuable information about what else you might sell to them. Your company can then offer products or services that better meet that customer's needs, and dramatically increase the chances that he or she will remain loyal.
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