Getting potential customers into your store or business can be tough; it takes a great deal of time, money and resources on a marketing campaign to bring customers in. Then there’s the matter of keeping them there and turning them into regular shoppers.
Loyalty cards and programs are valuable tools for retaining existing customers while improving profits. Your best prospect is often an existing customer who knows, recommends and returns to your business. An effective loyalty card program lets customers know you appreciate their commitment, and you're encouraging them to stick around.
Below are examples of customer relationships, how loyalty cards work, and the benefits of a loyalty program in today's market.
Why Customer Relationship Management Matters
There's a big difference between maintaining customer satisfaction and actively building and managing a customer relationship. The former is certainly important and requires effective sales, good products and impeccable service. The latter takes this satisfaction a step further – like moving from "acquaintance" to "friend". A loyalty card program can establish a good customer relationship that grows from common interests, communication and trust – just like a good friendship.
- Common interests: The right loyalty card program requires a deep understanding of your industry and your target market needs, with the ability to attract that audience with the right offers and deals.
- Communication: Establishing a strong customer relationship through a loyalty program requires clear communication regarding how the program works, what is required from the customer, and what the customer gets in return.
- Trust: Customers remain loyal to your business when they know they can trust you for quality products and quality service combined with good customer service.
How Loyalty Programs Work
Loyalty programs are often primarily used in the retail environment, rewarding customers with points, discounts and special offers for shopping at your business.
Free loyalty cards usually require a home address or email address to sign-up, and can be issued as cards or key cards that are scanned at the point of purchase. Grocery stores often offer free loyalty programs, providing the weekly sales prices only to members either with a loyalty card or by just quoting their contact phone number.
Another type of card is purchased by the customer and renewed on a yearly basis, such as the Chapters Indigo irewards membership card. Cardholders receive a discount on every purchase, an additional discount on already-discounted items, emails with exclusive coupons and more.
Many retail stores offer a store credit card, a type of loyalty card that works like a regular credit card with the addition of special discounts, events and rewards. The store card is issued by a major credit card company like Visa or MasterCard, with available credit that can be used anywhere to build up points to be used at the card's specific store. You can further recognize customers' loyalty by upgrading memberships with more benefits the more they spend.
Loyalty Programs in a Digital Age
Today's loyalty programs are starting to go digital. Loyalty cardholders can use certain smartphone applications to scan their card's barcode or enter the card number into their phone. At the store, instead of scanning the card during transaction, the store clerk scans a digitized version of the barcode from the customers' phone. Receiving loyalty card rewards without having to present the actual card is a major convenience for customers, which can significantly improve the merchant-customer relationship.
Examining the Benefits
A loyalty program can make a positive impact on customer satisfaction and profits. Besides retaining existing customers with rewards and discounts, those cards dangling from customers' key chains can help acquire new customers, with your business name and logo going wherever they go.
With every swipe or scan of the loyalty card, you can track customers' shopping behaviour. When you know what your customers are purchasing, how often they are using their loyalty card, and which promotions they are participating in, you can continually improve the customer relationship and better understand how the loyalty card program is working. In addition by requesting your customers details through the application you will be able to better analyze your client base and more clearly define your target market.
By letting customers know you appreciate their loyal business, you can build lasting relationships that dramatically improve the quality of your services and products.