Loyalty Pays: Hang On to Your Best Customers
Segmenting can help marketers arrive at clear objectives for their loyalty marketing communications. "You can treat people at different levels by giving them different thresholds to reach in order to get bonuses and promotions," Walczyk states. "If we had a customer who was spending $100 with us on average but we wanted to see what we could do to get them up to $120 per order, segmentation enabled us to give them a particular offer or incentive when they reached up slightly higher," describes Hennerberg.
Direct Mail and Loyalty
Direct mail is an integral channel in the loyalty mix, and if you are starting from scratch, Ferguson advises coming up with an identification piece that introduces your loyalty offer and allows potential participants to raise their hands to participate. "You might say you want to identify a certain percentage of customers who are coming in three times a month, and if you think you can get them in one more time a month, that can really make a difference to your bottom line. So send them a direct mail offer for double points or an extra discount for coming in four times a month," he explains.
Using soft benefits, like appreciation and status, can help retain those customers who already spend as much as they can with your company and may not change their behaviors due to economic incentives. "You want to put an offer on a table that combines that economic value and sense of status, and that's a very powerful combination, and the best and most successful programs are the ones that execute on that," Ferguson says. Soft benefits are advantageous when a competitor tries to attract your loyal customers but cannot lure them with lower prices alone. "You know price is important, but really it's about creating an overall sense of value for the consumer," Walczyk declares.