Loyalty Programs Are'nt
Just for the Big Guys;
They're for Everyone

Give back a little. Get back a lot.

Some pundits say loyalty programs aren’t working as well as they should. Well what in the world is really working as well as it should? Most things can stand a little tweaking. And sometimes, it’s the user that needs the tweaking. As one of my mentors used to say, “The best of anything is yet to be invented.” There’s always room for better products, programs and services and the ways they’re used.

If you dip in the kitty and invest 2% to 10% in a loyalty program that prevents customer attrition, that kitty will stay healthy. But loyalty programs aren’t just about buying loyalty. They help you gather the data you need for customer relationship management and modeling. It’s the synergy of the three that helps fine tune your marketing messages, strategy and tactics.

Loyalty programs can also be a defense tactic. If your competitors offer programs and you don’t, you better crank up one of your own. Just make yours better. How?
Don’t just copy the other guys, or offer bigger rebates. Your program, like your business, needs a unique selling proposition.

For example, it seems ironic but making customers pay to join your program may make them more loyal. Big boxers like BJ’s and Sam’s Club have annual membership fees that give you the privilege to shop in their stores.

BJ’s Inner Circle membership is $45 a year. If you upgrade to their Rewards Program for $80 a year they give you a credit of 2% on all qualified purchases.

Pizza Hut is another good example of a “Pay and Stay” program. When those big on pizza pay their annual fee of $14.99 to join the program they automatically get a free large pizza. And Pizza Hut gets names addresses and phone numbers for their data base and special offers.

L.L. Bean doesn’t charge for the privilege of shopping with them. They start with the goodies right up front. When you apply for their no annual fee L.L. Bean visa card, you’re rewarded with $15.00 of L.L. Bean Coupons. You also receive free shipping on all orders, free monogramming, and earn 3% on all purchases toward L.L. Bean coupons which are awarded in $10.00 units.

Use promotions to attract new customers. Use a loyalty program to keep them. Use CRM and modeling to build your business.