At the center of all commerce activities is the customer. The recessionary times of last year has made marketers realize in more ways than many that customer retention and a sizable share of his expenditure is equally important, if not more than going all out to acquire new customers.
Today, Loyalty Programs are a norm even in non-consumer based industries like manufacturing, and non-profit organizations. The need to be closer to the customers, understand their buying pattern and offering customers a value for their money has prompted these diverse industry segments to seriously think and deploy customer retention strategies.
Ensuring customer loyalty, enhancing it and effectively managing it is one of the most crucial factors impacting sales. It is no longer important to have a formal loyalty management application but it is equally imperative to move forward from the short term promotional campaigns to a well defined customer focused, relationship oriented programs.
The origins of Customer Loyalty Program can be traced back to the time when commerce was started and the genesis of such a program could lie in the 80:20 Pareto rule and why not? The cost of acquiring a new customer is almost 8 to 10 times the cost of getting repeat business from an existing customer.
Strategies to offer loyalty programs and the channels via which these strategies are executed have evolved over period of time. What would have started as a simple discount on the sale value has today morphed into a complex point based loyalty programs – best seen in the Airline and Credit Card industry.
Almost all businesses today employ some program to reward its repeat customers. Not only this, there are incentives to first time customers to get benefitted from the program – should they were to enroll. Given the diverse nature of the businesses, these reward programs differ from industry to industry. Depending on the industry type we are interacting, we may be presented either by dollar rewards, point perks, frequent buyer, or frequent flier programs. The underlying business objective of all these programs is same – customer retention and repeat business.
After the recent economic crisis the customer is far more careful and conscious of his spending. For now, building lasting relationships with the existing customers is a top most priority for organizations since customers choose to do business with the ones they know and trust.
Almost all marketers are committed to maintaining and enhancing their customer loyalty programs as the most important tool to strengthen their relationship with existing customers to make them the most profitable customers And in turn reward them. To get a customer in this cyclic loop of more purchases mean more rewards, mean more savings to both – is the ultimate goal of a marketer.
At any point in time, we are enrolled in at least 8-10 loyalty and rewards programs, ranging from airlines, to credit cards, to discount stores, etc. But while we may be enrolled in so many, we are active in less than half of them.
The ones we select to use often are the ones which entice us to repeat our purchases with these companies.
So what does it take to get a repeat customer and enhance A loyalty program?
Join our Webinar on 29th Sept’10 to get an insight into 5 ways to Enhance & Manage Customer Loyalty Program.
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