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10 Ways to Lure Customers to Your Loyalty Program

By Jun 16, 2006

Stephen R. WebsterLoyalty programs can be your key to high conversion rates. People like to be appreciated for their patronage—especially if you offer them something special that first-time or infrequent customers don’t get. By making small improvements to your e-mail and other marketing efforts, you can easily boost customer interest and, in turn, loyalty program membership. Following are some simple strategies for turning a one-time customer into a habitual and happy loyalty program spender:

1) Make it easy for them.
Structure your program to make joining as simple as possible. For instance, let your customers sign up for your loyalty program at Website checkout. Calculate and show them the value for joining, and give an immediate discount or other tangible benefit.

In addition, design the program so that all your customers – from the big spenders to the bargain hunters – can participate at some level. Everyone likes to belong to a “club,” especially if membership benefits include free merchandise or valuable discounts.

2) Make it easy for you.
Don’t overload your marketing department. Choose vendors who are flexible and don’t offer just technical expertise but also support, so that the ball is never dropped. You want a vendor that provides the one-on-one attention of a boutique environment and the standards of a worldwide corporation. Make sure your vendor is reputable and always current with the latest industry policies. Your vendor’s customer service team should be knowledgeable and experienced.

3) Add real value to your loyalty program.
Put a lot of thought into what your customer rewards will be. Carefully consider your costs and ROI, and focus on what’s valuable to your customer. Calculate exactly how much margin you can afford to share with your loyal customers on products they will find attractive. Present substantial loyalty discounts with an eye toward the lifetime value of the customer.

4) Personalize.
It costs almost nothing to call your customers by name (“Dear Susan, Thanks for being our loyal customer!”), but it makes them feel special. It also helps create the impression that your message was expressly intended for the reader, no matter how many subscribers received it.

5) Show them you’re paying attention.
Turn the data you receive about your customers’ interests and preferences into value for them. Not only will they feel listened to and respected, it’s much more likely that they’ll act on something that is specifically of interest to them. For instance, if you ask your customers for a zip code, return the favor with geographically appropriate content such as seasonal promotions or local in-store specials.

6) Get it in front of them.
Promote your loyalty program at every customer touch point—contact center, Website, cash register, etc. Make sure your contact center reps and everyone else with customer interaction proactively promotes the program, encouraging customers to join and making joining easy for them. Code your Website to recognize and welcome loyalty program members. Write loyalty program membership into your contact center scripts. Send a card to members for use in store and online.

7) Make your loyalty program viral.
People like to pass valuable and exciting opportunities on to their friends, so make it easy for your customers to get others to join your loyalty program. Then reward those customers who do. You could launch a viral e-mail campaign, for example, along the lines of “When five friends join the loyalty program, you receive a 10% discount!” Also be sure to extensively promote the reward for getting friends to join.

8) Tie your inventory control system (if you have one) into your loyalty program.
Work your unsold inventory into your customer rewards, so that you move the merchandise quickly and effectively.

9) Reward your customers for planning ahead.
Check your history to see what inventory sells slowly or usually needs to be moved, and promote this to customers far in advance at a great rate. A hotel chain, for instance, might promote discounted rooms that are typically vacant on certain weekends to targeted loyalty program members. Early birds love the special rewards available only to those smart enough to beat the crowd.

10) Bring effective partnerships into the equation.
Sell mini and combination packages that make it easy for customers to purchase not just your merchandise but complementary products and services too. The same hotel chain might offer loyal customers a discounted vacation package featuring the hotel plus restaurant, spa, and transportation partners. A package can be much more appealing than an a la carte product, especially if the customer receives substantial savings for buying the items as a set.

Stephen R. Webster is chief strategic officer/founder of Novato, CA-based e-mail marketing service provider iPost.