Remaining Loyal to Loyalty
Yesterday I spoke about VIP cards and the benefit of loyalty programs. I’d like to revisit that again today. There are so many differing sorts of loyalty programs out there at the moment – your wallet may never be filled with cash but it will certainly be inundated with cards for coffee, books, CD’s and many others. You can’t even buy a coffee these days without people asking for your postcode or if you’d like to join their club.
I think the key to a successful loyalty program is to be seen as giving something for nothing, as I previously mentioned. Many of these initiatives are labeled ‘reward programs’ and that is what they are supposed to do, reward your customers for their loyalty. In return your business is able to track customer trends, locations and purchasing behavior.
I personally think making your customers pay for a loyalty card defeats the purpose. Yes, it can be an expensive process but so too is conducting market research. It is a cost that should be absorbed by the increase in business you receive from such a program. If you start charging for the benefit, you have the potential to alienate your loyal customers and drive them into the reward-card-arms of your competitors.
Take Borders and Barnes & Nobles for example, Borders provides a free loyalty card with many benefits, Barnes & Nobles charges for the privilege, $25 in fact. Now, that’s twenty-five dollars I would rather spend on books. My other half, is a Barnes & Nobles addict, well he’s a book addict and happens to think B& N is the Mecca of printed literature. He spends a fortune there. He is hesitant to step into another store because of his consumer loyalty. Imagine his annoyance then, when I dragged him into Borders one day and he found out that he had paid for privileges others receive for free. Now he, like many other B&N customers spend a significant amount of money continually, he’s not the type of customer you want to alienate. By giving him or other high purchase buyers a free reward card it would ensure their loyalty instead, they have shelled out money in good faith and are made to look like a fool for that loyalty.
Don’t give your competitors a hand in poaching your customers. Loyalty and rewards programs are just that, they are to reward your customers for their loyalty. It is much more expensive to attract new customers than it is to look after the ones you have.
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