Using Loyalty Cards to Grow Your Business
In today's economic climate, it is getting increasingly difficult for small businesses to gain and retain valuable customers. Many merchants are cutting back on anything they feel is optional, including critical business initiatives like print advertising, promotions, trade show attendance and direct mail. This leaves businesses with a problem: how to effectively communicate to customers that they WANT and NEED them? Loyalty card marketing is one answer that many merchants may not have considered.
The concept of adding a gift card to your business has been well-embraced, as gift cards were the most asked-for gift item of the past holiday season. What many small businesses may not be familiar with, however, is the strong results you can see with a loyalty campaign. It may cost up to 10 times the expense to add a new customer than it does to retain a current one. With that in mind, more effort should be focused on keeping your current customers returning. Enter loyalty card marketing.
Loyalty card marketing has simple objectives at its core: to demonstrate additional value to existing customers and to motivate occasional visitors to a business to come back. A loyalty program that is properly crafted will not only provide additional value to the consumer, but it allows the merchant to gain access to valuable data they can use to increase sales and revenues. In essence, the merchant gains visibility into the purchase patterns of their most prized patrons.
Flexibility is one of the more attractive features of a loyalty program. Campaigns can be designed according to economics of the merchant providing it. Take a furniture retailer, for example, with customers who buy bigger-ticket/high-profit items. They decide to launch a "Mystery Shopper" promotion that gives their customers cards that range in value from $20 to $800 off the customer's next purchase. They mail the cards to its clients, and clients must come to the store to find the dollar amount on each card.
This promotion is successful because consumers consider it a "game" of sorts that can lead to a substantial discount. Merchants like this promotion because it enables them to strictly control the number of cards with a particular discount amount. And here's a tip: advertise the "range of value" to be, for example, $10 to $1,000, but only create a few $10 cards with $20 being the most popular low-end discount. This way, almost every consumer considers himself or herself a "winner," achieving something in excess of the lowest-valued discount.
A very different tactic may be taken by a restaurant which has a different rate of purchase and a different price-point. In this case, a restaurant may wish to develop a reward program using points. For every dollar spent at the restaurant, a point is earned for the consumer. All of this can be easily tracked and automated to print the consumer's point totals and prize notification onto their receipts. As prizes like a free drink or meal are earned and redeemed and the consumer's rate of purchase goes up, the restaurant begins to established a tighter relationship with this consumer -- one that becomes harder and harder for its competition to break.
It's also important to keep your program simple. By making the above program one point for one dollar spent, the restaurant is able to keep the message clear to both consumers and employees. The simpler the design, the easier it is for your employees to explain and promote.
Make sure your loyalty program reaches your customers. Good things happen to those who properly promote their campaigns. Give your loyalty program play in your newsletters, emails and on register receipts. Build awareness by using table tents, posters and other in-store and point-of-sale display pieces. Take advantage of those communication vehicles and advertising space you already have established.
It is difficult to survive in such a challenging economic environment, but often opportunities can arise from adverse conditions. Loyalty marketing is no exception. Consumers are looking for value anywhere they can find it. If you already have a loyal customer base, you are fortunate. Take it one step further and give those loyal customers another reason not to shop elsewhere.
Article Source: http://www.search-raven.com
About the Author
Al Duggan is an expert in loyalty cards and the VP of Business Development for Valutec Card Solutions, the nation's biggest provider of gift card programs to small merchants. For more details, please check out their website today.
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by: AlDuggan
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