Customer loyalty is key in the market companies currently compete in. Not only is the economy still recovering from a major recession, but the pace of media messaging causes consumer fragmentation that has never been seen before. Maintaining customer loyalty can make or break companies and their bottom lines. Here are three ways companies often get customer loyalty and brand loyalty programs wrong:
- Neglecting existing customers- As important as it is to constantly bring in new customers and new business, it is equally important to maintain the relationships with existing customers, as they are already bringing the company revenue. It is important to focus on maintaining your existing loyalty base, giving them exclusive access or a special gift card as an incentive could easily meet their recognition needs without costing the company very much money
- Rewarding spenders but not sender- Spenders spend a lot of money with your company, and it is easy to recognize their loyalty. But senders or people who send their friends and family and use their personal networks to bring additional customers to your products are arguably more important to building and maintaining a successful business. Providing incentives, such as gift cards or discounts for referrals build brand loyalty with the existing customer, while creating the potential for further brand loyalty from the newly referred customers
- Creating a loyalty program vs brand loyalty- whether you create a one-time program like a buy one get one free, or a long term program, such as a points rewards program, loyalty programs usually create loyalty to the program rather than loyalty to the brand. Customer loyalty to a brand originates from a customer feeling like they are being treated exceptionally by the company or the brand. The best way to do that is to take care of loyal customers on a case-by-case basis, essentially having no structured program at all, rather simply taking care of customers when needed, such as giving a gift card as a spot reward, or discounting a purchase when a loyal customer spends a large sum of money
Find the best way to treat your loyal customers in a way that makes them feel special, and it will keep them coming back consistently, and bringing their friends and family too. As we kick-off 2012 it might be time to re-evaluate your loyalty program, and ensure that you are getting customer loyalty right this year.
