30 ‘Condiments’ of Business Success
Condiment 12: Create a Customer Incentive System
Your customers are your best sales persons, so create an incentive for them to refer you to other people. Have a customer incentive system that rewards your customers for referring new people to you.
Decide What You Want to Achieve:
Firstly, be clear about what you want to achieve and how a customer loyalty program is going to help. If you run a cafe, for example, your frequent customers may expect an occasional free coffee. But if you run an interior design business, your reward program might be geared toward encouraging referrals rather than repeat business. A customer incentive program should be designed to generate incremental sales and improve the overall buyer experience. If your coffee is lousy to start with, the offer of a free cup is not going to build loyalty. But if you serve the best coffee in town and offer exclusive rewards to repeat customers, you can start to influence buyer behavior, create loyalty, and increase sales.*1
Loyalty Programs and Technology:
Loyalty programs have come a long way. Today you can manage your program through social media and smartphone apps, or a customer management system that allows you to track buyer behaviors and connect with customers through personalized emails or SMS marketing. The data you collect from your customer incentive program can also help you to cross promote or up sell additional products or services and create highly targeted and relevant marketing campaigns to further improve your business.
The purpose of a loyalty program is to generate incremental sales, retain customers, and encourage word of mouth referrals. To be truly effective, you need to know what your customers want, deliver a product or service that responds to those needs, and then reward your most loyal customers with incentives that have a perceived added value and recognize the importance of the customer to your business. Ultimately, loyalty programs are about building relationships, not just rewarding transactions.
photo credit: marketingland.com/8-reasons-loyalty-programs-imperative-marketers-109077