In the current economy, it is wise for merchants to place as much significance on customer retention as acquisition. It’s common business knowledge that it costs 3 to 5 times more to acquire a new customer than keep an existing one. So what’s being done to retain customers?
Among the most successful customer retention strategies during the past few years has been loyalty programs. Across the country, air carriers (frequent flyer miles) and grocery stores (VIP cards) have taken excellent advantage of reward programs. As for locally, who hasn’t had a hole-punched card from the neighborhood sandwich shop stuffed in their billfold or purse?
While they promote the same concept, these examples are actually quite different. The air carrier and grocery loyalty programs distribute rewards and capture customer information. The sandwich shop program only distributes rewards. It does not collect any information to further benefit the consumer or their business.
Tip #1: When planning your customer loyalty program, I suggest that you avoid traditional (hole-punch) cards. Opt for a Mobile system instead. The technology is present day, it’s popular among consumers, and it provides you with a highly-effective communication tool.
Don’t confuse communicating with consumers via their cell phone as spamming! Customers “opt in” to participate and have the option to “opt out” at any time.
Based on Nielsen ratings, in excess of 90% of the population 13 years and older carries a mobile phone. Of these, over 90% keep their mobile phone with him or her 24 hours a day.
Your Advantage: Text messaging has the fastest read rate at 90% in 15 minutes with a 97% final open rate (e-mail delivers a high median of 17% open rate in 48 hours). No other system provides you with a more powerful way to interact with your customers!
When researching mobile loyalty programs, select a system that uses your customers’ mobile phones and e-mail addresses for data gathering so it doesn’t disrupt your flow of business. The program should consist of a self-registration station or allow for customers to provide only their mobile number or e-mail address to the clerk at the time of checkout, who then enters it into the Point of Sale terminal. The system itself should collect any additional information (such as birthday, anniversary, etc.) out of the checkout line so it will be fast enough even for fast service restaurants to implement.
Tip #2: Your mobile loyalty program should communicate with consumers through text messaging & e-mail. Since information is gathered by text message and e-mail, the program should automatically attach the customers’ addresses to your consumer base listings. You can then send out texts and e-mails to them anytime using a web-based program.
Don’t misuse texts and e-mails blasts or your customers will promptly “opt out” of the program. Any communication should be beneficial to your customers and should not exceed 3 or 4 messages per month.
Your Advantage: Text messages are personal and enable instant two-way communication. You are establishing a profitable relationship with your customer!
Tip #3: Your program should be fully automatic. During customer check-out, it should only need a mobile number or e-mail address to issue credits and disperse rewards (and never disrupt the stream of business). Additionally, your program should also automatically distribute birthday and anniversary promotions.
Almost all mobile services measure e-mail open/coupon redemption rates and offers extensive reporting functions so you can modify your program to maximize final results.
Now, that’s essentially all the functions included with ordinary mobile loyalty programs. Of course, you do not want to be ordinary! Your program must be better-than-average, unique. Inquire about additional features.
For example, there’s a Mobile Customer Loyalty provider (the only one that I’m aware of) that’s fully integrated into Facebook! That makes the subscribing businesses’ service unique from their competitors and allows Facebook users a simple single-click sign up to complete enrollment. The program then posts relevant notices to customers’ walls and makes exclusive offers to their friends following the hyperlinks. The viral nature of Facebook itself makes this a great way build a loyalty program.
Another example of extra features is the ability to transmit voice broadcasts, if preferred, instead of text. While these are “above average” functions, they should be integrated with your program at no extra expense.
Consumers are three to five years ahead of local business in adapting to the changing channels of technology. Catch up to your customers with a Mobile Loyalty Program that’s fun, inexpensive and profitable. Take advantage of mobile marketing before your competitors.