Loyalty programs are everywhere you look…
- “Sign up for our credit card and we’ll give you discounts.”
- “Shop with us and you can earn points or cash back.”
- “Get your card stamped 5 times and get the 6th one free.”
- Etc. Etc.
But do they work? Will they work here in Saint John? Moncton? Halifax?
According to Nielsen, one of the most respected marketing research firms out of the United States, loyalty programs do work, to varying degrees, wherever there are consumers to take advantage of them.
All stats in this post have come from Nielsen’s article. (Original Article Here)
However, they did notice a few things that make or break whether or not consumers will stick with a program or drop it and look elsewhere.
Key Ingredients for Loyalty Programs
There are two key elements you must carefully consider if you are starting (or reviewing) a loyalty program in your business.
- Is the benefit obvious and enticing?
- Is it simple, easy and inexpensive?
The benefits may be amazing, but if you do not clearly communicate them to your customers and clients, they will not stick with your program. Nielsen found that the average North American consumer was attracted most to discounts and free products… nearly twice as much as they were the promise of enhanced costumer service or free shipping, and least enthusiastic about exclusive member deals and special shopping hours.
You have to offer something worthwhile to your target audience. If it’s obvious you are not giving something of value that actually matters to you, it shows your customer they aren’t of much value to you, and that’s not a great first step to building loyal costumer. If you don’t have an especially enticing added value offer and are dead set against decreasing your margins in order to offer something of value, particularly in the North American market, loyalty programs may not be for you… and that’s OK! Treat your customers right and you can build loyalty without a ‘program’.
Half of the consumers surveyed said they wouldn’t consider a program if it was expensive to join, regardless of the benefits, and 37% said they wouldn’t join if it was too complicated. 1/4 of the respondents didn’t like the idea of giving up their information to join loyalty programs, but one of the most interesting findings among North American respondents was that only 17% of them, 1 in 6, said they were negatively affected and would opt out of a good loyalty program due to volume of communication like emails.
Like any form of marketing, your message must be clear & easy to understand, and your call to action must be simple and easy if you want someone to take action. In today’s world, especially in North America, consumers have busy schedules and are constantly bombarded with copious amounts of information. If it takes more than a few seconds to ‘get’ what your program is all about, and more than a couple minutes to join, your results will suffer.
Loyalty Programs – Take Away
- Keep it Simple.
- Offer obvious value.
- Don’t be afraid to communicate regularly… within reason.
- Deliver what you promised.
Following these simple principles, there is no reason you shouldn’t be able to develop effective Loyalty Program here in Quispamsis, Rothesay or Saint John NB, or in any other city or town in North America.
At Freedom Ability Marketing, we’ve been taking this one step further and networking multiple local businesses together to offer their incentives to each other’s clients and customers as well as their own… turning offers designed for their own customers into marketing opportunities to entice new customers to come through their doors.
Loyal customers are what keeps small local businesses afloat in the age of big box big corporate establishments… and they are also what sets one giant corporate culture apart from another. You may choose not to use a loyalty program in your business, but make sure you are still creating loyalty with stellar customer service, honesty, and integrity and build those loyal customers. Your company will be better for it.
For a chat about our local networks, reputation marketing systems, follow-up systems, marketing by wifi, or mobile apps, don’t hesitate to contact Rod at 506-847-4025.