Power Direct Marketing article INDEX
What IS a Loyalty program? (Part 3 of 4)
Hopelessly Devoted to you --
Loyalty is a Powerful Two-Way Street!
What is a "trading area"? A trading area is the area from which you are most likely to get your business. For a retailer it is "X" distance from your location.
Trading areas are affected by both man made and natural "barriers". Such as railroad tracks, rivers, shopping centers and schools, a highway, a forest or meadow. Anything and everything that can -- and will! -- change the flow of traffic.
For other business local geography does not matter. For most mail-order marketers, fund raisers, the travel industry suppliers, and many business-to-business firms, geography is a non-factor.
Every company wants in their database only those prospects and customers who are within their defined "Trading Area". If you sell business supplies by mail-order, with phone and fax and mail and electronic ordering capabilities -- your audience are those people who buy what you sell.
If you're raising funds for a healthcare organization, your audience are those people who lend support to such a case. If you're a local restaurtant, you want to reach those folks around your location.
In each example the "Trading Area" will be different.
Communication with Members, Customers, and Prospects
The ability of loyalty programs to affect customer behavior depends to a large degree on your communication. Both the frequency of that communication, and what the message is.
A loyalty marketing program can be a Frequent Shopper Club. Or in a restaurant, a Frequent Diner Club. We all know the airlines, hotels, rent-a-car companies have teamed up to serve the frequent traveler. There is a parking lot in downtown Dallas, Texas, that has a frequency program for their customers.
In every instance, we have learned that frequency/loyalty/ retention programs are not passive. They work best when there is lots of action ... things going on for your customers to enjoy, to benefit from. Communication is a must. And there are a variety of ways to communicate with your audience:
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Send them a "membership" or identification card. Early on in your program, you have to decide just how you are going to identify your audience. A membership card, much like a credit card, is the choice for many. |
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Keeping your members/customers up to date on their activity with you by mailing a monthly -- or at least quarterly -- statement of activity. This does a number of things, not the least of which is to remind them to frequent your business! You can also include promotions when you have new product annoucements, seasonal specials, holiday and gift giving times. |
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"Gift Certificates" are a guaranteed business generator. When your members have "earned" gifts, and when they wish to send gifts ... both times are excellent times to communicate with your audience. |
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You very well may develop "levels" within your loyalty program. This will dictate how much contact you have with your various groups, and at what times. For each level contact will be different. |
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Everytime you have any "sales action" with your audience, it offers an excellent opportunity to "communicate". Maybe it is a simple "Thank-you". Maybe it is a bonus. Maybe it is a special service. |
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Most loyalty marketers establish an 800# for member service. This allows those customers who are in fact your best customers, to call you about almost anything. Their account status. A current promotion. Other locations where you have a tie-in arrangement and where they might "earn" points.
Offering a toll-free number so your members/best customers can call you, is another way of demonstrating you care. And you want to provide quality service. |
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Another active communication tool is the "surprise" gift or offer. It just "arrives". It was not announced -- and your customer certainly did not expect this extra attention. A contact by mail or phone or in person when it is least expected can be your most rewarding experience. |
Always with your communication, it is best to have your most knowledgeable and friendly staff, customer service, on-line sales people on board. Put your best in front with your best customers. It creates an environment conductive to two-way communication ... your customer and your team, "working" together.
When your best are out front -- communicating with your best customers -- it also shows your dedication and commitment. It helps you build upon the three key goals you have:
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Increased Loyalty |
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Increased Frequency |
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Increased Retention |
Additional value from your database
Your customer database contains much valuable marketing knowledge. The basic demographic data that is still so useful in picking the base business or consumer audience, is today sometimes overlooked ... just because it is "so basic".
Such things as age and sex, income range, family size and geography on the consumer side can start you in the right direction.
Ditto for business-to-business database marketers. Number of office locations, number of employees, SIC code, length of time in business, a private or public company -- all basics to allow you to begin to walk the right path.
The knowledge you have in your database will help you determine where and when to aim "that" promotion. And to who ... it is still people buying from people.
Nobody buys from a company -- people buy from people. Your database will allow you to talk with your audience as a "person". Not a number, or "general friend". Instead, as an individual.
I believe that very few people really like to be sold ... at the same time they sure do like to buy! This is a truism in my book -- when you reach out to those who you know from your database history are most likely to buy -- you have a winner on your hands.
Putting customer relationship marketing -- database marketing in place for you will ...
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Bring present customers back more frequently, |
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Increase your awareness levels and attract new customers, |
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Strengthen customer loyalty and goodwill from both "old" and "new" customers, |
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Increase your retention level -- keep your customers from going someplace else, and |
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Increase your sales -- and most importantly, PROFITS! |
Just Imagine -- 8ight benefits you will enjoy
Just Imagine! what putting a customer relationship marketing/ database marketing program in place for you will do:
Imagine Benefit #1. Your sales will increase.
It is easier to sell to someone who already knows you -- and very likely already bought from you. A database marketing program allows you to do just that ... talk to your customers as friends. Just imagine.
Imagine Benefit #2. Your customer retention level will increase.
It costs somewhere between 5 and 9 times more to get a new customer, vs. keeping one you already have. This is logical- frequently first time sales are not profitable. You earn your profit rewards over time ... not always in the beginning.
Makes sense then that you want to keep your good customers coming back again and again. A database marketing program allows that to happen. Just Imagine.
Imagine Benefit #3. Your knowledge level goes up ... so you talk to customers as individuals -- as real people.
The more you know about your customers the more you can communicate with them effectively. And efficiently.
In reverse, the more you communicate, the more knowledge you will gain. Because your customers will see you as "friends". As someone they can turn to. They can trust.
Make an effort to know as much as you can about your customers ... increase your knowledge level. Just Imagine.
Imagine Benefit #4. Your awareness levels increase.
Why? Because your message gets spread ... lots of people telling other people about you. This happens because your customers learn to not only count on you for business ... they count on you to do what you said you were going to do.
They expect you to perform ... as in the past you have. You are expected to DWYPYWD -- Do What You Promised You Would Do. And when you do so -- as your database knowledge program allows you to DWYPYWD -- people tell people.
Your awareness levels increase because you earn that higher level of recognition. Just Imagine.
Imagine Benefit #5. You target your message to the right people at the right time.
Everything about direct marketing is targeting the right message to the right people. This "characteristic" of the DM discipline is the primary reason why it has been accepted (and in some circles feared!) in the marketplace.
And of course, a database allows you to do just that. Talk with your primary audience with a primary message. Then select your secondary market and share with them a different message.
Imagine Benefit #6. Earn an increased level of loyalty.
Any customer who stays with you, and does repeat business with you, soon becomes loyal to you. And, they expect a certain level of "loyalty" from you in return.
With loyalty comes family, belonging, friendship. Not necessarily friends like your next door neighbors. At the same time you select who your friends in business will be, just as you do in life. And with time -- and frequency, too -- comes loyalty.
Imagine Benefit #7. You are able to measure your successes.
Bingo! If you can't measure your marketing and sales programs, you will never know if they really worked or not. A database marketing program allows you to pinpoint success.
A loyalty program gives you the opportunity to know not only what programs are working (and which are not), but also where in the marketplace you are enjoying the most success.
Database marketing is like waves hitting a beach -- they never stop. And so your database marketing program never stops providing you with knowledge -- measurable knowledge. Just imagine.
Imagine Benefit #8. You spend less. You earn more. Your profits increase.
Profits are the bottom line. The goal. The real objective.
All other measures are fine ... and worthy. Profits is what allows all those other activities to happen. Without profit all the rest of these database ideas are just so much fluff. Remember, PROFIT is not a four letter word!
Why is Imagine Benefit #8 true? Well, you spend less because you are only commuicating with those who can buy what you sell.
You earn more because you are talking with an audience who can buy from you ... and wants to. They have demonstrated that fact. It is much easier to earn more when your message is aimed at the right people.
And your profits increase because you are spending less and earning more -- with much less effort.