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Customer loyalty programs

Each company has two ways to retain customers. The first is to prevent their transition to competitors, which sometimes takes the form of monopolization. In today’s market, such an approach is unacceptable. Fortunately, there is a decent alternative: increasing customer loyalty by maximizing their needs.

What is meant by loyalty program?
Loyalty is a positive attitude of customers to a particular company, and a desire to re-use its offer. In order to create and maintain such a mood among customers, loyalty programs are being developed.

The loyalty program includes a set of activities that are planned and combined in such a way as to meet the needs of the target audience to the maximum, encourage customers to long-term cooperation, minimize customer losses and increase the volume of goods (services) sold.

Loyalty programs are most widely represented in industries that are characterized by the high cost of goods, or a substantial margin: in retail stores, airlines, delivery services, etc. However, such programs can be implemented in many other market segments.

What is the basis of the loyalty program?
The main motive that underlies any loyalty program is to provide the customer with obvious benefits. For the purpose of motivation, both tangible and intangible benefits can be provided. Contrary to the beliefs of many entrepreneurs, customers do not need products or services. They need to guess their need, to entertain or solve some problems.

Calculating the cost of attracting one client, businessmen often forget to take into account purchases made by regular customers. At the same time, one regular customer is able to bring more income than a few random ones. Thus, the main goal of the implementation of the loyalty program is to reduce the cost of attracting new customers and creating stable demand based on a permanent customer base.

What is most often used to retain customers?
The most common loyalty program tools of Russian companies are discounts, e-mailing and universal special offers for a wide audience. All these methods are ineffective due to various reasons.

Customers love discounts, but this tool is far from always conquering them. Effective are significant discounts (30 – 50% or more). If it is not possible to lower the price so much, then it is better not to use this tool.

Note! Mailing in most cases are perceived as spam, especially when carried out too often. Such an imposition often causes a negative attitude towards the firm.
Universal offers are often uninteresting to the absolute majority of customers. If you do not study the needs of the audience and do not offer what they need at the moment, the effect of the actions and special offers will not be.

How to develop a successful loyalty program?
How to develop a successful loyalty program?

First of all, you need to explore your audience. This will give the only correct answer to the question of how to increase customer loyalty. Next, you need to determine whether the loyalty program is currently required or not. For this, it is necessary to evaluate the effect it can bring. Developing a program based only on desire is not worth it.

When a decision is made, you need to think about the benefits that can be given to customers and get the most out of it. You should then determine how these benefits will be provided. It should not be taken for what is difficult to implement at this stage. And finally, specific tools and methods to increase customer loyalty are selected.

What should you pay special attention to?
There are five stages in the development of a loyalty program that require a very careful approach:

Setting the goal of the program.
Highlighting the key factor to achieve the goal.
Deciding on the appropriateness of the program.
The choice of tools.
Evaluation of the effectiveness of the program.
Further they will be discussed in more detail.

Goal setting
The goal of the program may be to attract new customers, retain existing customers or prevent the loss of customers in the conditions of unfair actions of competitors. It is necessary to choose only one priority goal, then the probability of achieving it will be much higher.

Highlight key factor
The key factor can be only one. It depends on the nature of the business and the current market situation. To correctly identify this factor, it is necessary to study the values ​​and priorities of its main customers. Why they come back for shopping: because of the special attitude towards them, thanks to special services.

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