Being good to your customers these days is something, but is not enough. Being low-price sometimes helps, but is not enough. Having good quality products is crucial, but still...not enough!
Today customers seek for superb quality products, right-priced (not low nor high), available "right now" and of course excellent customer service waiting to resolve any problem they face! But still...this is not enough!!!
They need to know you care. To feel that you know them, you know their needs, the problems they face and they have to solve everyday. They need to know you are there to serve them when they want it but also to reward them cause they chose you instead of your competitor!
Loyalty programs need to serve the customer not the company! The company has no other way than to acknowledge the power of consumers and try to listen and learn more from them and their behavior in order to offer the next service they will ask for, before competition does.
A Loyalty program should be part of Customer Experience (not marketing) and should use information collected from multiple sources to improve its benefits everyday. But loyalty programs isn't just about collecting data and giving 10% discounts...it has to be more than that to be successful since a company needs loyalty programs to face critical problems like losing customers everyday (and more importantly...losing good customers everyday).
My experience in the food & retail industry showed a few tips that you have to keep in mind when considering a loyalty scheme for your customers and here is my list:
1. LISTEN TO THE CUSTOMER
When setting up a loyalty scheme you don't look at what you can offer...no no no...you try to find what is value to your customer (or to the competitor's customers you want to chase). It's not working when you say: "ok... let's give them 10% every now and then...". You need to find out what makes your customer come to your shop again and again (+more often and spend more). Is that a standard discount? Is it a coupon? Is it a free add-on you can offer? Or is it a special service e.g. free transportation/free refill that only members can enjoy? You better find out what your customers consider "value".
2. MAKE IT WORK EVERYWHERE (OMNI-CHANNEL EXPERIENCE)
When you get in the game of loyalty you better make it good and make it work everywhere. All purchase channels should be ready to accept loyal members and offer them rewards and privileges. Is it your e-commerce platform? your mobile app? Your physical store or maybe your call center? You have to be prepared to acknowledge a loyal member, treat them as kings and reward them everywhere they choose your brand! There is no excuse for a loyalty scheme to not include a store (physical/ digital) in the program. Of course you are free to promote (offering double points/ more rewards etc.) the channels you want to strengthen.
3. MAKE IT SIMPLE
Can a 5 year old understand and explain the basic mechanism of your loyalty scheme? Then you might have a good chance! Your customer has to understand the basic mechanism of the program with no effort. 1+1=2. No hidden rewards, costs or combinations he cannot understand and explain to a friend. For example a simple and straightforward mechanism is every euro you spend you collect 1 point. Every 100 points you get a 10 euro discount coupon. As simple as that! The easiest way to subscribe (send a free sms), collect points (1€=1point), identify your loyal customer by the system (just use his mobile no. and don't complicate things with more plastic cards or new code numbers) then the more chances you have to get memberships and new introductions to the program by your members.
4. DON'T EVER FORGET THE MIDDLE MEN
No matter how good your program might be, no matter how many hours and budget you have spent in a strategic plan and integration of systems in order to collect data and offer superb value to your loyal customers, don’t ever forget the front line- i.e. your employees, your franchisees, the cashier that talks to the consumer every single day. If you don’t include your own people in the game you might end up losing time (which the most valuable asset you have), money and of course customers. A simple incentives program for your employees/ franchisees with benefits for those you promote the loyalty scheme to customers, a very simple and easy to understand the process to subscribe members and execute an order or reward members, is crucial to the overall success of the program. Usually, difficult processes to register members (long, not easy to fill-up forms), time consuming detailed procedures to acknowledge a loyal member (physical cards, special codes etc.) or just a wrong way to communicate the benefits of the program to your partners (franchisees) or your employees, could lead to a failure just because they didn’t bother to communicate it to the customer.
5. DON'T LET THEM GET BORED - MAKE IT EXTRAORDINARY
It’s ok to have a simple standard loyalty mechanism for the majority of your customers e.g. 10% coupon discount every 100 euros spent / 1 free coffee every 5 coffees you buy. This will keep them warm and willing to visit your store more often... for a while. What will make them come back more often for the rest of their life is something out of the ordinary. So don’t forget to give it to them once in a while. A competition exclusively for members for a big prize (e.g. a trip to the country that your coffee beans grow), a unique experience that only your brand can offer (Dinner with a celebrity that endorses your brand / Driving a Ferrari at Monza’s official F1 circuit). Some unique rewards for special segments e.g. offer tickets to the Uefa Champion’s League Final to sports fans segment of your customer base. These will keep the fire on for your customers and will never let them get bored with your brand.
6. BE CERTAIN THAT IF YOU DIDN'T DO IT... IT WOULD BE WORSE
This is something you should always have in mind and you should always remind all board members showing reports and comparisons with the results you had before the loyalty program was launched. Start collecting data before the loyalty program begins so that you will be able to prove that everything would be worse if you didn’t do it!