Your store’s customer base is without a doubt its most precious business asset. And looking after regular spenders will help breed staunch supporters and create your very own brand devotees.
As the managing director of Uber UK, a company that specialises in the business of retaining customer loyalty, I could write an entire book on the facts and figures on this subject. But as time is of the essence for us all, my message is simple: 93 per cent of your customers (or potential ones) are more likely to increase their spending if you have a fantastic loyalty programme in place.
Loyalty programmes have been around for many years and they are increasingly used by retailers – or indeed any company selling a product – to encourage customers to stick with their brand. On the high street the Boots Advantage card is a prime example as is Sainsbury’s Nectar scheme. But as retaining custom in today’s rocky economy becomes even more important, smaller stores are also adapting similar techniques to devise their own loyalty programmes.
So what makes a loyalty programme truly fantastic? There are four key ingredients that, if used correctly, will conjure one recipe for success. These include exclusivity (all clients want to feel special), surprise (because everyone loves a surprise), immediate value (reward them straight away and they’ll be back in no time for more), and personalisation (this makes your customers feel even more special).
In today’s climate, spending money on fashion is often a treat. So to persuade customers to buy something out of desire rather than necessity, they need to feel extra special. Stamp cards and points-based systems will just make them feel like everyone else. However, personalised and added value extras will enhance their entire shopping experience.
How do you do this? Retailers need to work at creating a VIP community of loyal customers by offering them little extras to simply show them how much they are valued. A complimentary glass of bubbly or one-to-one shopping experience will give them a feel good factor that will not only make them want to come back, but also spread the word among their friends.
Identify your customer
In today’s difficult climate, every business needs to ensure they’re winning the hearts, minds and wallets of their customers. But with so much choice, how do you make sure they choose you over competitors?
Firstly, you need to understand your customer. Don’t assume you know – do your research. What do they like? Where do they go out? Speak to your staff, hold focus groups and conduct surveys and questionnaires. You need to truly get to know the people that buy from your store and find out what turns them on as well as off.
Well-executed research will enable you to fully understand your customer so you can speak to them personally and relevantly. This will ensure that you’re giving them exactly what they want and will keep them engaging with you more often.
Put data collection and usage at the core of your customer relationship
management programme. You need each customer’s name, address, email and date of birth (for those birthday treats) – the more you can find out the better. You can then overlay this information with your transactional data to communicate effectively, timely and relevantly.
Be aware that customers are increasingly sceptical about passing on their details, so there has to be a compelling reason for them to share it with you. Make your proposition stand out from the crowd. Highlight the benefits clearly and maybe run an initial competition to get your staff involved and excited; it’s all about building trust.
With loyalty, one size doesn’t fit all so don’t offer every customer the same. Be relevant and offer different customer segments different exclusives and benefits based on their transactions and lifestyles.
Dare to be different
When communicating with your customer don’t be afraid to challenge the norm and stand out from the crowd. You could work with other non-competitor brands that your customers already love and get them excited by offering something relevant as an exclusive benefit of being your customer. That will help make them feel exclusive and part of a VIP community – even when they’re not spending with you.
Recent research conducted by Uber UK found that a point-based programme excites just 11 per cent of customers. They don’t work for most brands and are often perceived as dull and impersonal – so be brave and get personal. A non-point based loyalty programme is much more effective in engaging your audience; get it right and you’ll reap the rewards.
An adaptive approach is also an absolute must. Measure the success of every campaign so you can see what works and what doesn’t. The first year of running a programme should be the test and learning phase; many big retailers have a failure budget that allows them to experiment and learn more about what motivates their audience. Use your first year to find out what activity you need to do to generate the revenue you need.
But one thing I can’t stress enough is that your loyalty activity will live or die with the enthusiasm of your staff. If they don’t believe in it then your customers won’t either. You have to invest time into getting them excited and buying into the programme for its long-term success. If they feel part of it they’ll communicate it more effectively. And don’t expect miracles straight away. Loyalty is not a quick sales fix, but with a strategic and adaptive approach you will create a community of like-minded, brand advocates that will visit you more often – and spend more when they do.
Sarah Cross has over 16 years’ experience in loyalty and customer retention management. She is the MD for Uber, a boutique consultancy that helps brands drive revenue through strategic programmes. Follow @uber_SarahCross and @uberUK on Twitter for industry hints and tips or visit
TOP LOYALTY TIPS
• If customers are giving you their data, you need to use it: it’s all about building trust. And once you start communicating, you need to keep doing so regularly to create a community of brand advocates.
• Your customers will be happy to hear from you if there’s something of value in your message. This means you need to be capturing the right data so that you can get in touch in a way that’s totally personal to offer them super-relevant treats, rewards and benefits.
• You need to create a loyal community around your brand that clients want to be a part of. Forget traditional points-based programmes: your customers will feel much more excited if you get in touch to indulge them with gifts and surprises when they least expect it.
• Speak to customers how they like to be spoken to. Email is the cheapest way of getting in touch but some consumers will be more responsive to text messaging – make sure you use your data to evaluate this and act on it. Also, don’t forget social media.
• Use your data to get new customers. Encourage your existing fans to shout about you by encouraging them to refer a friend to the loyalty programme. Treat them and their friend to a special gift voucher but give it an expiry date so that they visit straight away.