Loyalty marketing programmes  - By CHELO SÁNCHEZ.jpg

Loyalty marketing programmes  – By CHELO SÁNCHEZ

Loyalty marketing programmes are a way to reward your customers and build long-term relationships with them. A well-executed programme can increase sales and differentiate your business from the competition. In this article, we will look at different options to increase the loyalty of your existing customers.

Loyalty programmes have immensely gained in popularity over the past 15 years, aiming to create the idea in the consumer that they are getting “something for nothing”.

Loyalty programmes may offer benefits to the buyer in a number of different ways. Many loyalty programmes offer a sustained discount, such as 10 per cent, for a period of time, perhaps for a year or for the life of the business. Others offer a discount once certain criteria have been met. For example, a 15 per cent discount on a single purchase would be given once a customer has spent 200 euros at the business. Others offer points, which may then be redeemed for products.

Money-off vouchers are a simple and fantastic way of rewarding your clients. A shop could give you five euros in vouchers for every 50 euros spent in the shop and once the voucher is in the client’s wallet, it is money sitting there waiting to be spent. It encourages the customer to go back!

Loyalty cards are the most common form of loyalty programmes found throughout the world today. Major supermarket chains all use them. These supermarket loyalty programmes usually operate by offering a discount on certain products to those who have a loyalty card. In exchange for this discount, customers are giving the store all their personal details and access to itemised receipts of their buying habits.

Ultimately, the success of loyalty programmes depends on how well the business uses the data it gathers. But managing data can be very time consuming and many businesses say they find little profit in the use of loyalty programmes, while others attribute much of their financial success to a well-executed use of such programmes.

It is common belief, in the UK, that the market for loyalty cards is highly saturated. Consumers have become disinterested in most loyalty schemes. Many say that, compared to other, more important factors, such as price, loyalty programmes make no difference to the way they decide what to buy, who to buy it from and how much to spend.

So, why are there still so many loyalty programmes out there? Surely they must make a difference to consumer behaviour, otherwise companies would not invest their resources in building them in the first place.

Are loyalty programmes the way to go for small and medium size business, such as the ones we tend to find on the Algarve?  

Why loyalty programmes succeed or fail

Different consumers want different things from loyalty schemes. However, they do, in fact, share a common set of beliefs about what makes a loyalty scheme good:

A relevant reward, which can be easily attained, as quickly as possible, in a programme that is kept simple.

We are in Portugal, not in the UK. The market is not saturated yet, and a well executed loyalty programme might just be what your business needs to stand out from the competition.

Loyalty programmes do work if they are kept relevant, easy, quick and simple.

To make sure your programme works do:

• Have a person dedicated to the programme, keeping track of it, looking at ways to improve it and acting as liaison with the customer. Allow your programme to continually evolve by keeping on top of it.

• Make sure everyone in your organisation understands the programme.

• Keep the programme easy to understand and execute. The programme must be simple for employees to explain or promote and for clients to understand.

• Make sure you get enough information from people when they enrol, so that you offer benefits that really matter to them. Ask customers what their preferences are. Find out what their hobbies are. Ask how many times do they eat out/shop/travel per month? And how many times do they do that here per month? Your goals will determine the questions you ask.

• Communicate with your members when it is appropriate. Communicate only when you have something relevant to tell them. Do not bombard them with e-mails.

• Ensure your members’ privacy. Do not sell your lists. Never. It looks really bad for you.

• Track your efforts so you know what is working – sales promotions or birthday promotions, for example and know who is redeeming them.

I wish you a successful business week. 

Chelo Sánchez

Chelo Sánchez can be contacted on 917 898 952, 289 393 008 or via e-mail at [email protected]