Should You Reward Your Customers With A Customer Loyalty Program
Customer loyalty programs are becoming common among all types of business. But are they a good idea? Do they really help retain customers? And are the costs worth the benefits?
In a word, yes. But it is imperative that your customer loyalty program is well-thought-out.
You have more competition than ever, thanks to the internet.
Prospective customers – and existing ones, too – have easy access to all the information they could hope for about the heavy construction equipment or trucks your dealership sells. They can consult with friends and colleagues via social media, and read opinions about you posted by complete strangers. It’s tougher than ever to attract attention and stand out.
One way to do that is by rewarding those who repeatedly shop with you. If customer loyalty programs didn’t work, businesses wouldn’t be flocking to them as a marketing technique. These programs:
- Give you a formalized way to formally thank customers for their business.
- Are a perfect “excuse” to stay in touch with your best customers.
- Keep customers focused on you for ongoing parts and service needs and it can keep them from straying to another OEM and dealer when it’s time for their next new equipment purchase.
A quality loyalty program is a significant sales tool.
If you don’t offer something of value to them, it’s not perceived as a reward.
You can give away logoed apparel, tickets to a ball game, etc. as an occasional thank-you, and customers will appreciate your generosity. But for construction and trucking industry customers, what matters most is building their own business. Rewards that help them institute best practices, stay safer on the job and make more money resonate loudly and clearly. You “get” them, and that helps cement your relationship.
Your program should benefit each customer to the point where they will lose out if they go elsewhere. Rewards have to be achievable, in a reasonable period of time.
Your program should also be individually tailored. Everyone hates airlines that offer frequent-flyer miles that never seem to be available when or where you want to fly, right? An industry-specific program such as Loyalty Bound allows your customers to accumulate and redeem their rewards in multiple ways. It’s just as valuable for an owner-operator as for firms operating large fleets of vehicles.
You can turn your program into an exclusive club, by providing sneak-peek news and information that puts them in the know and gives them a leg up on the competition. Use them as “consultants,” periodically asking for their opinions or suggestions. You can further accentuate exclusivity with tiered benefits — the more they spend, the more they get, whether that’s a deeper discount, savings on more types of purchases or other extras.
Your dealership benefits, too.
You can collect more information about customers in your loyalty program. The more you know about them, the more you can tailor your marketing and the more advantageously you can tailor the rewards you give them. That shows you’re paying attention to their needs and interests. You’re demonstrating loyalty to them, so they’re loyal to you in return.
You can’t take advantage of individualized data gathering and tracking without appropriate software. Applications like Loyalty Bound make it easy to manage your program, to see who’s actually using it, how and how often. Customers can also track their own rewards status.
It costs less to retain a customer than recruit a new one. With customer loyalty programs you aren’t spending more on marketing, you’re simply redirecting your spend toward those most likely to stick with you. Yes, every time a loyalty member uses their discount you’re earning reduced revenue. But you’re still earning something, and it’s business that customer could have taken elsewhere.