Best Advice? Keep Customer Loyalty Simple
According to one market research firm, nearly a fifth of people surveyed say that they look beyond price to the entire package before committing to a product or service, another survey says that nearly a quarter of people want cashback on purchases. What’s the value of this? According to a third survey…
“…around 20% of customers are loyal to a brand but the amount that 20% spends translates into nearly three quarters of total sales.”
One survey put a figure of 25% on the value of an effective customer loyalty scheme, another says 28%. A third survey put the figure as high as 28.25%, although another suggests it could be as low as 23%.
That thing they say about statistics
While at face value some of this is good stuff, it does seem that there’s a lot of data out there, it’s not always audited, and it can be used to prove pretty much anything.
Cutting through it all is key. Ask ultimate question: Why do we need to generate this data?
The vast majority of industries have been significantly disrupted by changing purchasing patterns over the last few years, whether it’s declining footfall on the high street driven by the rise of internet retailers, comparison websites making it easier to check prices and deals or the power of our phones to help us shop more efficiently where ever we are.
The scale of the challenge for retailers is being highlighted almost weekly: banks closing branches, hundred-year-old retailers collapsing, independent high street bookshops on the critically endangered species list… there are different reasons why these things are happening, but the common denominator is that habits that were once thought to be set in stone have changed.
Not to mention staff loyalty
At the same time, for firms trying to retain members of staff, the work-place has changed. Jobs for life have gone by the wayside and there’s a constant risk that our best team members are about to ask us into an office to have a conversation that starts with the sentence “There’s no easy way to say this, but I’ve been talking to competitor X for the last few weeks and they’ve offered me a new role…”.
Your staff are the voice of your company and the level of service they provide will likely be a reflection of your ability to engage them. First you must ensure that your staff are advocates of your brand and believe in your mission and values, then you can layer customer facing techniques on top.
The Key to Creating Brand Advocates
You can dress it up with as many statistics as you like but in the end victorious organisations tend to be those with some sort of efficient staff and customer loyalty strategies – those that encourage people to keep buying your products or services or stay within your organisation.
The challenge is working out which scheme is right for you and more importantly, right for your customers or staff. There are plenty of statistics that can justify whatever answer you want to hear, but the best advice out there is keep it simple.
Fighting For Your Share of Wallet Space
Loyalty schemes are there to attract and retain customers, to help your firm do more than it did last year with a healthier bottom line. If you make your scheme overly complicated, it’s less likely to be taken up by your customers.
The reason why most of us are willing to give space on our wallets over to cards from major national pharmacists and grocers as well as small local coffee shops and hair-dressers, is because it’s fairly easy to understand what the reward is and when we’ll get it. Five haircuts, sixth free, spend £10 on suntan lotion; get a pound off anything you buy next week.
People don’t have time to faff around. Make a loyalty scheme complicated and people will look elsewhere. You’ll lose sales, customers or staff and, as importantly, you’ll lose data that can help you improve your offering.
Keep it simple, offer a genuine reward that people want and you will put yourself in a better position to make your business flourish.