Loyalty Programs
Cheesy or tacky? Does it depend on the establishment or the product offering?
Can they be smart and classy, or will they always seem cheap? In today’s world, especially with rising living costs, you would be hard pressed to find anyone who does not enjoy a good freebie.
What about Referral Schemes?
You know when you refer a friend, usually by sending them a link, and if they buy or sign-up you receive a free gift or discount off your next transaction. How do they make you feel about the service provider or vendor?
Customer Loyalty
Businesses, whether they be online or in person, have become exponentially more inventive and creative when it comes to developing ideas to encourage repeat business and customers revisiting their stores, restaurants or services.
Customer loyalty and repeat business is the only way businesses can survive – if every (interested) person only ever bought a Mercedes-Benz once in their lifetime, there would be little to no manufacturing and sales on the cars, and inevitably it would shut down.
Our CEO, Anthony Tattan's Recent Experience:
Recently, I had the surprisingly pleasant experience of receiving a straight up, money-off voucher that caught me completely by surprise and challenged my beliefs of these types of schemes.
What was the voucher you ask? Well it was a very simple €100 off my next purchase.
No minimum spend. No percentage discount involved. Just a straight up discount of €100 off my next purchase in their store
Purchasing a New Suit in Dublin
Let’s backtrack just over a year from now. I was in the market for a great, new, quality business suit, and had visited a branch of a well-known international brand in Dublin. Here, I happily spent €1,000 on a smart, two piece pin-stripe.
This was my gift to myself. I deserved it.
I had closed out the previous year with a couple of sizeable contract closes, and despite the tax man taking his pound of flesh, I was still in a very healthy place. I had promised myself I would take some of my “winnings” and “invest” it back into myself.
Now I am not one for frivolous spending and €1,000 is a little on the steep side for a suit off the rack, but it was a very good commission cheque. Additionally, these deals were a long time in the works before finally closing, so I had a lot of time to think about what I was doing. It was not just an impulse buy.
Customer Service
I must say the service I received was top notch and it felt like my custom was greatly appreciated and valued.
They served me coffee and chocolates, as I opted for these instead of something from the well-stocked beer and white wine fridge. Alternatively, I could have chosen a nice glass of Merlot or Cab Sav.
These guys really were pulling out all the stops, however, it did not feel contrived or out of the ordinary. I guess this was their normal everyday modus operandi and they were used to it so that made it feel quite natural. This type of sales experience and customer interaction is so rare nowadays, and also sorely missed.
James was taking care of me, and despite his youthful appearance (mid- to late 20s I guessed), he was extremely knowledgeable and patient. He painstakingly took each and every one of my measurements, despite the fact that I already knew what mine were – I have not changed a lot in 10 years – thankfully.
Consumer Satisfaction
We then spent over an hour trying different styles, colours, designs and cuts, as well as two-piece and three-piece options. Similarly, we went on to different shoes and various shirts. Always patient, always friendly and chatty.
I was pleased that I had chosen to buy from that store, as they have such a great name and I knew I wanted a premium experience.
At last we were finished and I was to return in a few days to collect my new suit. Some minor alterations were required, which were included at no extra cost. I could not see what alterations were needed but James insisted. He assured me that it would be worth the wait and to trust his judgement and experience.
When I called in to collect my new suit a couple of days later, I could see why James was the expert. I felt a million dollars and the way it fit was amazing.
Strategic Sales
Jump forward to the 1 year anniversary of the purchase of my new suit and I get home after a busy day of meetings to go through the post and sort out the bills from the junk.
The envelope was a standard white letter size, but inside was a personalised note from the store and James’ signature along with a voucher for €100 off my next purchase – I had to admire the strategic sales on their part.
There was no time limit on the voucher, nor was there any stipulation about having to spend X amount in order to receive the discount.
I made a plan to visit the store that coming Saturday.
Saturday came around and as I drove into Dublin City Centre it dawned on me that I did not really need anything from the store in question, so anything I procured would be a luxury splurge purely for personal satisfaction. This was perfectly fine with me.
When I arrived, I was met by a smiling James who again offered me a beer, wine, coffee and/or chocolate.
We did the small talk thing and chatted about the weather, sports and a few other trivialities before he asked me if I received the voucher and if I had anything in particular in mind.
I told him there was nothing I had specifically come in for; and then it dawned on me that almost everything in the store cost well in excess of €100.
What a Great Sales Strategy!
€100 in cash buys you dinner with your significant other in lots of restaurants, including drinks – (although, my wife’s tastes tend to run a little expensive)
However, when it comes to a gentlemen’s clothing store such as this one, the prices are at a level where €100 is really just a discount and in some cases it might only represent 10% to 20% of a discount.
A clever advertising strategy indeed.
In the end, I chose a really nice overcoat which I had been thinking about since purchasing the new suit the previous year.
The overcoat cost €550 (minus the €100 discount) so I spent €450, which a few days prior, I had no intention of spending. In fact I had no idea I would be spending that sort of money anytime soon on a basic clothing item that I did not specifically need. That said, I made my peace with it.
But the key to the sale was the voucher arriving in the post.
The store received €450 of a transaction that day, which they would not have received if they had not sent out the voucher.
I was left wondering how many other men had the same experience in recent months, and how much revenue the store could attribute to that one very successful marketing strategy.
Would I also receive another voucher in 12 months’ time?
On one hand I hoped not, but on the other hand I was keen to see if it would arrive and what I would be thinking I might need around that time from their store…
What a great strategy this is, and how very simple and effective they made it!
I now find myself closely evaluating other provider’s schemes and initiatives. There are a couple of examples that we will reference in another post in the coming months so keep an eye out for that.
Going Back To The Original Question - Do Customer Loyalty Programs Work?
Yes. They can work really well – and they do not have to be tacky or cheap. As long as the experience end-to-end is of high quality and service delivery, then the process can be a strong money maker for the vendor.
Customer Retention
One aspect that is important in conjunction with most (high-end) loyalty programs, is service delivery. This aspect is often overlooked, and should be taken into consideration. Oftentimes a company may offer a loyalty scheme/program, but the reason it may not be working as well as one would hope, is because your (potential) clientele are turned off by the customer experience surrounding your service delivery.
Customer retention is far more likely if you offer a memorable and enjoyable experience for your customers.
QUESTION – when was the last time you had a really great experience when it came to customer service and what was the best example of a successful loyalty program or initiative you have come across in recent times?
If you find a couple of things here that are valid and making sense, but you feel you could do with some help or advice on how to implement changes – get in touch with Outsource Sales Director
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