Build Loyalty by Rewarding Your Best Customers
By Allan Pulga
Looking for an easy way to boost sales? Figure out who your best customers are and what motivates them to buy; then simply offer them incentives to continue buying from you.
Joanna Krotz, co-author of the "Microsoft Small Business Kit", offers the following three steps to help you set up the right loyalty programs for your business and keep customers loyal.
Step 1: Identify best customers
The key first step is to define your target by understanding the characteristics of your best customers. You may be surprised to find that the customer you talk to most, the one whose family saga you've now memorized, is so demanding and buys so little that he's actually costing you money. And a customer you've never heard of, one who buys online once every quarter, is really your biggest spender.
Neither frequency nor volume will define a best customer. You want to identify customers who provide the most profit. Only a thorough analysis of your customer database can yield such insights. The discovery of the online buyer, for instance, might lead to special e-mail offers.
Next, find out what those customers most like about your products and what offers or improvements are appealing. Start by casually asking questions of customers each time they call. Then, when you've formed some ideas, mail a postcard survey to get detailed answers. Make sure you have enough responses to figure out what really moves customers to buy. You may have to send out a few mailings.
Step 2: Divide and reward
Armed with the information, classify your customers into four target groups, from highest to lowest spenders. Then categorize which products and services get the most attention or sales.
The resulting list will highlight the customers to spend your time and marketing on. You'll also know how to allocate your resources among the other groups and, perhaps, the profile of new customers you can tap for growth. Remember, the goal is to get the best customers to return and spend more or buy more frequently.
There are dozens of ways to reward customers, including the well-known frequent buyer clubs, buy-several-get-one-free offers and time-sensitive promotions and discounts made available only to loyal customers.
Such ideas are tried and true. But you don't have to start big. Loyalty programs — and the marketing materials you create to promote them — can be very affordable. Some ideas:
· Send personalized thank-you notes. After each visit or major purchase, send notes that thank the customer for their business. You might also enclose a discount or special offer that can be applied to his next purchase.
· Send reminders. Set up a tracking system that automatically generates a postcard or note offering a 10 percent or more discounts after a certain interval of time during which the customer hasn't bought anything.
· Send e-mail offers. Capture e-mail addresses first — with the customers' permission, of course. Have safeguards in place to protect the information. A promise of upgrades or e-mail-only offers may motivate customers to provide their e-mail address.
· Send holiday or personal offers. A freebie or treat on a customer's birthday sends the message that you've paid special attention. Sending news or sales dates for a customer's preferred brand or product will also make a favorable impression.
· Share proprietary information or intelligence. If you offer professional services, a newsletter or special bulletin about industry news or events gives your customers a great value. You can also enclose discounts and offers.
· Offer steep discounts at off times. If your business has any specific down time, let loyal customers in on a bargain.