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Customer Loyalty Program: 20 Tips to Build Customer Loyalty & Retention

Businesses appreciate every sale but a sale made to a repeat customer is a virtual seal of approval. Customer loyalty keeps businesses running and is very sought after. What is it, however, that gains and maintains customer loyalty? Basically it is making and keeping the customer happy, (customer satisfaction). There are many ways you can achieve this and the more ways you incorporate into your business practices, the more likely you are to get and keep customer loyalty. Here are 20 tips to improve customer loyalty:

We're building the list of 100 tips, this includes the first 10 tips published on July 10, 2009 and an additional 10 tips.

#1 How is your earning rates for loyalty program rewards? Analyze earning rates by segments to understand engagement of target segments.

#2 Have you analyzed your reward program redemption rates. Who redeems? What do they buy? What’s the average sale at redemption?

#3 For your loyalty rewards program, which customer earn the rewards and are not redeeming. Do you have a plan to engage them?

#4 Hard benefits, like rewards, are just one part of the value proposition. What are your soft benefits that build the emotional connection?

#5 Enhance your loyalty program value proposition by tailoring soft benefits to resonate with key growth and retention customer segments.

#6 Tiering your loyalty program gives your customers a reason to give you a greater share of wallet and creates upward migration in spend.

#7 Loyalty benefits should be a mix of hard and soft benefits. Hard benefits reinforce value and soft benefits build emotional connection.

#8 Create an Internal Communications plan for your loyalty program to educate everyone on the value to the organization and to the customer.

#9 Internal communication plan should educate, motivate and engage employees in supporting the loyalty program and company goals.

#10 Internal communication plan for your loyalty program need to include a dashboard of results at the program, customer and employee level.

#11 When creating the internal dashboard, interview key stakeholders to identify customer metrics stakeholders can use to optimize results.

#12 Loyalty program metrics need to include a dashboard of customer, campaign, program across channels, and employee performance.

#13 For a new loyalty program, do qualitative and quantitative research to validate that the value proposition resonates with customers.

#14 Conjoint customer research can be used to create the optimal mix of hard and soft benefits for your loyalty program.

#15 Customers will carry your loyalty card if your customers see value in the program and if they are engaged in your brand.

#16 Include social networks in your customer communications plan. Loyal customers are your best advocates.

#17 Give your loyal customers a better value than you do a prospect. There is nothing worse than being an avid customer and not appreciated.

#18 In B2B employee turnover can significantly impact your customer relationship. Do you have a strategy in place to address this issue?

#19 Always give the customer more than they were expecting. Customers like to be pleasantly surprised and when they are, they shop again.

#20 Follow up on a sale. Acknowledge the customer and they will likely shop with you again. Customers want to be appreciated.

10 Tips to Increase Customer Loyalty

Sustaining a loyal client base is one of the biggest challenges that businesses face each day. You may have hundreds of competitors, so how can you market your product to obtain consumer loyalty? Consumer loyalty comes from attaching a certain perceived value to your product in the mind of your consumer. In order to create this perceived value you have to establish relationships and trust with your customers. Here are some useful tips to help companies maintain and generate loyal customers:

#1 How is your earning rates for loyalty program rewards? Analyze earning rates by segments to understand engagement of target segments.

#2 Have you analyzed your reward program redemption rates. Who redeems? What do they buy? What’s the average sale at redemption?

#3 For your loyalty rewards program, which customer earn the rewards and are not redeeming. Do you have a plan to engage them?

#4 Hard benefits, like rewards, are just one part of the value proposition. What are your soft benefits that build the emotional connection?

#5 Enhance your loyalty program value proposition by tailoring soft benefits to resonate with key growth and retention customer segments.

#6 Tiering your loyalty program gives your customers a reason to give you a greater share of wallet and creates upward migration in spend.

#7 Loyalty benefits should be a mix of hard and soft benefits. Hard benefits reinforce value and soft benefits build emotional connection.

#8 Create an Internal Communications plan for your loyalty program to educate everyone on the value to the organization and to the customer.

#9 Internal communication plan should educate, motivate and engage employees in supporting the loyalty program and company goals.

#10 Internal communication plan for your loyalty program need to include a dashboard of results at the program, customer and employee level.

Multi-tender Loyalty Programs Key to Revitalizing Transaction Volumes and Gaining Deeper Insight

In 2009, there has seen an increase in companies implementing multi-tender loyalty programs. A couple reasons for this trend include:

• Companies wanting to reduce their media spend and focus their resources on communications that are measurable and targeted to their best segments.
• Banks are severely restricting their consumer lending and reducing new account growth of retail private label credit card programs.
• Retailers recognize the changing need to reward customers for shopping regardless of how they choose to pay.
• American consumers, who may have changed their shopping habits forever-or until the latter part of 2009.
• Companies have learned that allowing invisible customers to escape undetected because of their choice of tender makes it impossible to track all their best customers.

By acknowledging the multi-tender world, companies maximize customer spend or share of wallet among these crucial customer segments. As a result, Customer Insight Group has seen a growing number of companies expanding their loyalty programs to include transactions from multiple tender sources. The basic benefits of these multi-tender loyalty programs include:

• Increasing market share and sales per transaction.
• Driving the company to customers’ "top of mind," and increase frequency of visits.
• Improving the ROI of marketing investment.
• Leveraging marketing opportunities to create greater visibility and reduce time between visits, increase sales and profits.
• Building productive and proactive relationships with loyal customers.
• Reducing customer defections to competitors while increasing the company's customer retention rate.

For many companies, offering a properly designed multi-tender loyalty program could be the key to revitalizing transaction volumes and gaining deeper understanding of your customers' purchasing behavior.

The goal of your loyalty program should be to identify your best customers, regardless of their tender preferences, and to create a value proposition that encourages repeat purchasing. If you limit their method of spend, you’re also limiting their allegiance to your brand.

Imagine a loyalty program that could build business with all of your customers and create a significant opportunity to heighten their loyalty to you and to your brand.

Customer Loyalty Critical in Down Economy

[Business Times, July 7, 2009]

Focusing on core customers can make a critical difference both now and in the long term

Economic downturns can wreak havoc on customer relationships. Deep cost-cutting compromises service. And to make up for lost revenues, companies sometimes add new charges and fees, which make customers feel they are being gouged. And the negative effects of lost customer trust can be deep and long-lasting.

Gaining their faith: The advantages of customer loyalty are more pronounced in a downturn. Loyal customers cost less to serve and they typically concentrate more spending with companies they trust

On the other hand, the advantages of customer loyalty are more pronounced in a downturn.

Read the full story.

Western Union Launches Loyalty Program

The Western Union Company, a global leader in money transfer services, announced today plans to enhance The Western Union® Gold Card, the company’s global consumer loyalty program, with the convenience of a reloadable Visa® prepaid card.

Western Union will selectively offer the program starting in July targeting 8 million Western Union Gold Card loyalty members in the U.S.

“Whether it’s cash, account, or card based, our expanding global money-movement network provides consumers more ways to move money quickly to more places worldwide than any other business,” said Stewart A. Stockdale, executive vice president and president, The Americas for Western Union.

“Designed to better serve the needs of our money-transfer send customer, the new and enhanced debit prepaid Western Union Gold Card will help strengthen our relationship and value proposition among our most loyal customers, providing each with increased convenience, and smart and cost-effective ways to better manage their money in what is becoming a cash versus credit driven economy.”

Read the full story.

Is Now a Good Time for Loyalty Marketing?

While it may seem counter-intuitive on the surface, the simple fact is that strong companies use a recession to take advantage of weaker competitors. How do they do it? They focus their resources on proactively engaging existing business, cross-selling to current customers, and encouraging former customers to buy again. According to CMO Council Executive Director Donovan Neale-May, “Everybody is spending money on demand-generation programs, but they’re not taking their existing customer data and leveraging it.”

During a recession, marketers really need to identify their most profitable customers, then find ways to improve the customer experience and increase business with those customers. In addition, they need to leverage buying history, and knowledge about customers to re-connect, stay in touch, and demonstrate the value that the brand brings through the products and services. Today’s smart leaders will reduce the urge to cut customer loyalty marketing initiatives, and will remain resolute in developing communications programs that strengthen the loyalty bonds with existing customers.