How to Know If Your Client Retention Program Is a Waste of Money
Well-designed, properly researched client retention programs are always a good idea. On the other hand, loyalty programs put together in a hurry and without a thorough understanding of customers can end up being a waste of money.
Although the main goal of a client retention program is to reward the loyalty of repeat customers, you should also be getting something out of the deal. For example, the program should help you learn more about your customers’ shopping habits, so you can make changes to your marketing strategy that help your company grow and prosper.
Not sure if your client retention program is a winner or a loser? Here are some questions to ask yourself to figure out whether you’re throwing your money away:
Are you rewarding the customers that really matter?
Experts estimate that up to 10 percent of a company’s profits come from just one percent of customers. In other words, a small number of customers truly have an impact on the success of your business. While loyalty programs are meant to reward all loyal customers, you should only offer major benefits to customers who spend the most money with your business. One way to do this is to offer tiered benefits, so the more a customer spends, the more he is rewarded. Offering one-level rewards might be a waste of money, as you’re not giving any special value to the customers who are truly making an impact.
Are you gathering data from your customers?
Do you know more about your customer base now than you did before you had the program in place? Do you have a better understanding of what your customers want (and don’t want), how they spend money, and how often they shop with you? If you’re not using data from your customer retention program to learn and improve, your program probably won’t keep customers happy.
Are your rewards worth it?
Providing valuable rewards means spending more money. But if your rewards are worthless or not interesting to customers, consumers are less likely to take part in the program, so the money you spend setting it up and advertising it will be wasted. An attractive customer retention program offers real value, whether that means special discounts that customers won’t get anywhere else or additional products or rewards that are worth obtaining.
For information about LoyalMark’s loyalty program solutions, get in touch with us at 1-866-233-6326 or through our website.