Building Customer Loyalty in 4 Steps

Yesterday, I participated in the annual Stamp Out Hunger™ program sponsored by the USPS and Feeding America. The program is so simple to participate in that it got me thinking about loyalty programs and how the simpler they are, the more successful they are. While I know Stamp Out Hunger is not a loyalty program, we can still learn a few things from it. My mail carrier placed a small flyer in my mailbox on Tuesday with three simple instructions.

The instructions were to first get my blue bag out of my mailbox on Thursday, next fill it with food, and then place it outside of my mailbox on Saturday. Sure enough Thursday, I had a blue bag in my mailbox on Thursday. I completed the last two steps as instructed and was done. It was simple and I instantly felt great. This is how loyalty programs should be. Below are four simple steps that will guide you to successfully building customer loyalty.

1. Make It Simple

Having people deviate from their normal behavior never works. I was already going to the mailbox and to my apartment. I just had to fill a bag. Loyalty programs that require too many steps are never going to be the most successful. Think about your customers’ natural behaviors and how your program can be integrated into those. This step includes the registration process.

2. Make It Time Relevant

Walgreens has built one of the most successful loyalty programs in the country because its customers instantly get a reward at the counter. Dollars are knocked off their total before they swipe their debit card and they are instantly reinforced for making their purchase at Walgreens. People don’t wait for anything anymore and their rewards from your loyalty program aren’t an exception. Instant gratification for customers is always the best. Think about when you are offered a mail in rebate. It’s not as enticing as a red clearance sticker.

 3. Make it Digital

Those mail in rebates are outdated for the first two reasons, too many steps and too much time between the purchase and the reward. I often get lunch from the same place and order the same thing. I always forget my combo punch card. I would prefer to not have to remember to carry those little cards, but rather link it to my keychain like the Walgreens reward card. Making the program digital can include a scan card, an app, special social media offers, or a microsite on your owned channels. There are many cost-effective options.

4. Eliminate Cost Barriers

Annual fees and one-time activation fees are a thing of the past. There is going to be a competitor offering the same rewards without those barriers so you should eliminate them too. As a customer, I’m not going to pay to make purchases at your business. I just want to be rewarded for my repeat purchases.

When it comes to loyalty the best product and experience is always going to win out over price. But for similar products and offerings, price and rewards are going to be differentiators. There are very few Starbucks and Amazons that can compete on product and experience. For the rest of you, I suggest the four steps above. Yes, loyalty programs can be costly. But remember the old saying, “you have to spend money to make money” and in this case if you do it right, your customers will spend more money too and make up those costs.

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