Loyalty Programmes … Do They Work?

Customer loyalty is every business owner’s dream, but with the variety and scope of products and services available to today’s consumer, it’s tough to attain. To earn your customers’ loyalty, you have to deliver excellent products and quality service – consistently.

And even this isn’t always enough. You need to do more: you need to offer extra incentive and make it worthwhile for customers to return to you. You need to make your brand their first and only choice.

A popular means of making a brand attractive to customers and encouraging repeat business is through loyalty programmes, in the form of a loyalty card, rewards card, points card, advantage card or club card.

These are programmes where repeat customers are rewarded in some of the following ways:

  • Points can then be exchanged for discounts on future purchases. Example: You have a store card that you swipe every time you buy something at that store, earning points that you can convert to a monetary amount to use to buy something at the same store.
  • Points can be traded for products or services. Example: You get points each time you buy petrol, and get a free car wash when you have accumulated a certain amount of points.
  • Points can be exchanged for cash. Example: You earn points every time you use the card, which is then converted to cash that is paid into your bank account.
  • Points can be donated to worthy institutions such as conservation programmes or development initiatives. Example: You earn points every time you pay with your card, which then contributes towards a donation to your chosen worthy cause.

Microsoft Dynamics CRM involves using technology to organise, automate and synchronise business processes, in the areas of sales, marketing, customer service and technical support.  The overall goals are to find, attract and win new clients; nurture and retain the customers your company already has and reduce the costs of marketing and customer service.

But do loyalty programmes necessarily translate into loyal customers?

The key to providing your customer with the kind of service that will inspire and earn his or her loyalty is to know exactly what the customer wants and then ensuring that your brand does just that.

Having said this, if you retain customers through loyalty programmes the implication becomes that they are not loyal to you or your brand – they are simply loyal to the loyalty programme rewards. This, in turn, means that they will switch brands as soon as someone else offers a better reward system.

Instead, customer satisfaction and loyalty should be based on something deeper; on a proper connection with and buy-in into your brand.

This can be achieved by forming real and meaningful relationships with your customers; getting to know who they are, and what they need and want; and providing them with products and services exclusive to your brand.

Customer relationship management is a complex and challenging exercise, but one that bears high rewards. As a business owner, you need to ensure that you have an effective and efficient customer relationship management system in place to service your customers’ every need.