Tip of the Day: Loyalty Goes Both Ways – Invest in Your Customers

Loyalty marketing is a golden opportunity for most every organization that has repeat customers, and it really shouldn’t be that hard.  Nevertheless, organizations routinely prove disloyal to their customers by not fulfilling their end of the bargain.  There’s an interesting new report out from ACI Worldwide stating that 2 in 5 consumers have had a negative experience with a loyalty program.

Although three out of four Americans are members of at least one retail loyalty card program, 85 percent of members report that they haven’t heard a single word from a loyalty program since the day they signed up.  Likewise, 81 percent say they don’t even know the benefits of the program or how/when they will receive rewards.

“Loyalty programs have long been a logical way to leverage consumer satisfaction, but retailers are missing the mark when it comes to reaching out to consumers with information and offers that are relevant to them,” said Rob Seward, senior industry marketing manager at ACI Worldwide.  “The end result is that memberships are becoming meaningless.”

Are you kidding me?  Don’t know the benefits of the program?  Haven’t heard from them since they signed up?  What?!

If you’re reading this, and you have loyal customers and the opportunity for a loyalty program it’s time to think long and hard about a few things.

1. What have you done to educate them and welcome them into the program? When someone signs up, they should get a welcome package that welcomes them into your brand community.  Better yet, create an autoresponder email campaign that welcomes and educates over the course of several emails.
2. Stay in touch at least every month.  There are varying opinions on how often you should stay in touch, but I would have at least 2 versions of your monthly newsletter.  One for the loyalty program members and one for everyone else.  Make it special, stay in touch, and deliver consistent value and attention.
3. Get personal. Loyalty isn’t only about frequency, deals or discounts (though customers – at a rate of 62% – join for the program benefits, which are usually monetary). It’s actually about paying attention to the customer (your end of the loyalty bargain) and delivering on that so that they wouldn’t think of going anywhere else.

Think of this example from Zane’s Cycles, in Branford, Conn.  Zane’s is a $10M business that is absolutely thriving, by the way.

Zane’s Cycles offers its customers free bicycle maintenance for life if they take the time to answer six questions (which owner Greg Zane then stores in his customer database). This was a master stroke, says Rogers, because only true bicycle enthusiasts care enough about bike maintenance to come down to the shop to fill out the questionnaire. Since Zane knows who the true cycling enthusiasts in his community are, he targets them with relevant offers and the special care that all aficionados appreciate.

So before you think that you can’t be this generous, just think of how you would feel as a customer if you’re offered this. Where else would you shop?  Remember, loyalty is an investment!