To compete in today’s marketing, where customers want to feel connected to the businesses they deal with, here’s why having a loyalty program is key to retaining customers.

Do you need a loyalty program?

The simple answer is Yes.

Your competitors are getting them, the large chains have them, and customers want them.

“More than 90% of companies have some sort of loyalty program.” (Accenture)

To compete in today’s marketing, where customers want to feel connected to the businesses they deal with, having a loyalty program is key to retaining customers.

“71% of customers say a Loyalty Program is a meaningful part of their business relationships.” (Hubspot)

However, they aren’t all created equal, and you can’t rely on just points and rewards to keep your customers loyal to you. A loyalty program is only a lure, to “trade” your customers contact information for earning points on spending.

Once they have provided that information, your task it to build a relationship or a connection.

When you’re building relationships with customers, they are more likely to choose you over all the other options available to them. Most customers come once then get on with their busy lives and don’t return. Not because of anything you did, but what you didn’t do. Stats says that you lose 68% of your customers because they feel that you are indifferent to them.

“Customers who have an emotional relationship with a brand have a 306% higher customer lifetime value than those who don’t.” – Hubspot

You need a loyalty program PLUS. A program with all the tools to ensure you can communicate with your customers multiple ways – so no matter what method they typically respond to, you are able to connect with them.

Here’s a checklist of some of the things want on your program:

• Makes you money with ROI that can be measured to the penny – everything needs to be measurable and reported on so that you can know what marketing works, and what needs improving.
• Gives you complete control and gets customers to come back when YOU want them to. If you are seasonal, or have slow periods you want to fill, your marketing needs to be able to target those times when you need to drive more business.
• Lost customers are a huge frustration – someone comes once or twice and then forgets about you – you want to be able to reactivate those people and target just them to get them to visit you again.
• Increases spending of less frequent customers – if a customer comes once a month (or year depending on your business type), what will happen if they come twice a month (or year)? Your sales would double. Your program needs to influence repeat visits.
• “Loyal consumers spend 67% more on average than new ones.” (Forbes) A good program motivates customers to come more often and spend more, because they trust you, see value in what you offer and feel connected to your business.
• Does not create MORE work for you or your staff. It should work seamlessly with your current systems, and ideally be managed by your customer through an App on their phone. With it, they can sign up, check their rewards balance, see redeemable offers, and provide a way to give positive online reviews.
• Easily trainable to staff so that it doesn’t slow them down. Staff needs to see the benefits and promote it for you.
• Customization to your business – your colors, logo and program name. You want your program to reflect your business.

Conversely, here’s some of the things you DO NOT want from your program:

• A discount program for people already at your business – there is no point in giving an offer to someone already at your business. You want to give offers to people who might come to your business again – those are customers who have left happy and need to be influenced to return again (or more frequently).
• Confusing to customers or staff (complex or has too many restrictions) – if rewards expire too quickly, or customers don’t understand the program, they won’t use it. And if it confuses your staff, it will slow them down, they won’t promote it or ensure visits get captured.
• A punch card: it’s easy to cheat or counterfeit, you don’t collect customer data, and it’s impossible to measure. Simplicity comes with a price.
• An add-on afterthought from your POS company. Point of Sale solutions, shop management software, do best at what they were designed to do – capture sales, take payments and track sales data. Many providers have added on a loyalty component that only offer adding points and awards – when you really need a multi-media communication platform that tracks and reports on your marketing. An external more comprehensive loyalty program can easily integrate into many providers solutions with better results.
• A program that gets ignored or overlooked. If you rely on email only, know that 1-18% of emails get opened, which means 82% of your email communication never even gets read. And we all communicate so frequently by text now, it’s easy for a text message to disappear down the list of recent messages. Some people open email, some people respond to texts, some people live by their smartphone notifications, and everyone looks at their postal mail. If you aren’t marketing by all the methods possible you are missing a portion of you customers.

Loyalty is a powerful emotion that leads to positive reviews, referrals and, of course, repeat business.

Loyalty is a fundamentally shared emotion, and it’s reciprocal. If you give me something, I feel compelled to return the favor – and with customers that means they’ll return to your business to support you.

Many businesses do this by giving away a free item, rewards points, bonus points, or a tangible gift like a mug, insignia sports wear for the fave local team, chocolates, or any other premium you can come up with.
Loyalty is a powerful emotion that leads to positive reviews, referrals and, of course, repeat business.

Ivan Wicksteed, CMO at Old Navy, said,

 “It’s the emotional connections that a brand makes; the emotional memories, the emotional triggers that you spark that last the longest and go the deepest.”

Studies have shown that 60% of businesses have lost a customer because they feel the business is indifferent to them. (Customer Experience Insight).

Your business needs to be communicating regularly to your best customers, those that come most often and spend the most money, using offers and building a relationship encouraging and enticing them to return again and again.

Unfortunately, customers have so many choices, they have busy lives and quite often, they forget about you. Not because of indifference or dislike, but they just do not spend their day thinking about you. You need to enter into their mind intentionally. You need to make it happen.

A general rule of thumb is that you want to connect AT LEAST weekly with your customers in some form or another. That means they need to have read an email, get something in the mail, make a purchase and earn points, get a text message from you, or read a social media post.
There are endless reasons to communicate with your customers. Special events in their lives like birthdays and anniversaries, seasonal holidays, celebrations in the community you’re connected to, or any number of national days.

What matters is you take action and enter into the conversations they are having in their mind. Remember, you are building a relationship that builds loyalty, and in turn causes more repeat visits.

Some of the Business Owners we work with have built such a solid relationship that they email their list DAILY! And the response they get is overwhelmingly positive.

All Business Owners hear from customers who are happy with what you provide them. Here’s a tip you can take to the bank

All Business Owners hear from customers who are happy with what you provide them.

Here’s a tip you can take to the bank.

When they say something, or email it to you, or put it on a survey, or post it on social media ask them if you have permission to use it in your marketing!  Then keep a list of these valuable comments.
If you have been rated by critics positively, written up in any sort or trade publication or guidebook, or reviewed by an “influencer” online…

Don’t keep it a secret!

We are surrounded by skepticism. There’s been no end to the scandals by our politicians, business leaders and religious leaders. The Olympic Committee has been scarred by scandal. Celebrities are being “cancelled”.

It used to be that when you said something it was generally thought to be true. But after years of scandals and “fake news”, it’s to the point that everyone is skeptical of everything they read or hear.

That’s why you need testimonials, to combat that skepticism.

It is called a PREPONDERANCE OF PROOF. If you have the best ??? in Ohio – prove it. Not by what you say, but by what your customers say.
In addition to the skepticism, we are inundated with marketing messages from 1,000’s of sources on a daily basis. All of this has made today’s consumer more uncertain than ever.

There is only one way to counter this skepticism that exists with today’s consumers.

Testimonials.

When you ask to use your customers’ comments, be sure to include the use of their name to use in your marketing. A comment without a name and city is really meaningless because it could be made up. If someone sees a name they recognize, then they know the comment was true.

And don’t just stop at one – get lots.

Put them up in your business, put them in your marketing, your ads, on your website, your social media posts. You don’t have to put the whole quote, you can just use part of it. Just put a few dots in between.

We suggest using “italics for the quote to make it look like the person is talking”. Then bold the name so it stands out and the people reading can scan to see if there are any names they recognize.

Once you start getting testimonials, they will start to snowball, and you will get more and more of them. If you have received letters from happy customers, put them up on the walls where people will have a chance to read them. Some businesses have a wall of fame for all their testimonials. Sometimes they have pictures of local celebrities that have visited. It works on people’s natural desire to be a part of a group. If so and so came here and had was happy, then there’s a good chance I will as well.

The bolder and more complimentary, the better. If it is on the person’s letterhead and includes their real signature or you are able to take a quick picture with them, then that is better still.

You can NEVER have too many testimonials.

How do you get testimonials?

Ask!

Just ask. Next time you have a customer praising your business or a staff member, tell them you are collecting positive comments from customers. “Would you mind if I wrote that down to use in our marketing?”
Most people won’t mind at all. Some people are procrastinators and never get to writing something themselves, but you could also write it down for them and email it to them for approval, then all they have to do is give permission.

Get lots of testimonials. If you don’t have many now – ask your happy customers for them, get them off your comments on social media or review sites. Once you have them, put them to use in all your marketing.

What is the number one most profitable group of people that you can market to that will consistently deliver the best return on your advertising dollar and that most businesses neglect…we’ll tell you here.

What is the number one most profitable group of people that you can market to that will consistently deliver the best return on your advertising dollar and that most businesses neglect?

YOUR EXISTING CUSTOMERS!

The people who have most recently given you money are the ones most likely to return and give you more.

Your previous customers know how to get to you, they know what they like about you and your staff, they know your service and products, and they appreciate the value they are getting when they spend their money with you. It doesn’t take much effort to convince someone like that to return again.

A new customer, on the other hand, doesn’t know who or where you are, has one of your competitors closer to them, or a friend recommended them to somewhere, or they have another business in mind and they have little motivation to try to find an alternative. It takes a lot more energy and money to convince them to come to you. According to Lee Resource Inc., attracting new customers will cost you 5-8 times more than retaining an existing customer.

The single, easiest way to get more business is to get your existing customers to come back more often. But you can’t trust that they will return automatically. That’s what we call the “hope” marketing method. You “hope” that they come back again. (Hint: it doesn’t work)
A majority of customers come once then get on with their busy lives and don’t return. Not because of anything you did, but what you didn’t do. Stats says that you lose 68% of your customers because they feel that you are indifferent to them. It’s the kiss of death. Eventually, you’ll run out of people.

It’s a leaky bucket. You keep putting new customers in the top and they keep disappearing out the holes in the bottom. Some die, some move away, some are lured by competitors, some are recommended elsewhere by friends and some just simply forget about you.
How do you plug those holes? How do you let your customers know how valuable you are to them, how do you get them to return again and how do you make them feel important enough that you become their first option when they need what you provide?

To do that, you need to know who they are and have a means of communicating with them. This means you need a customer list; a database of the names, addresses and emails of people who frequent your business. You should also get your customers’ birthdays, which has several other benefits. (We’ll tell you more about that in a future post.)
Once you have a list created, you are able to communicate with them directly and encourage them to return more often by sharing the last updates, special offers and changes in your business.

During the Covid-19 pandemic, the value of a customer list became even more evident. Customers were no longer coming into businesses, which meant that without a list you weren’t able to communicate with them. You may have started a contactless way of doing business, or added additional safety protocols, you may have held special events – but without a list to share the news, many customers would never hear about these changes.

But it doesn’t need to be a pandemic. We have had clients over the years have fires that temporarily closed their business, road closures that prevented access to their parking lots, natural disasters, broken gas lines, ferocious weather and all sorts of other obstacles that negatively affected them. With their customer list at their fingertips, they were able to keep they customers informed and influence them to return when the time was right.

When it comes time to sell your business, having a customer list is a critical asset that increases the selling price. The ongoing revenue from your existing customers is a large factor that influences the buyer decision because it means they’ll continue to have a steady stream of customers.

You may feel uncomfortable with building a list and asking for customers for their information, but once you develop some systems you will find it quite easy and profitable to maintain. Almost every business has tried a version of the old “fishbowl”. Put a bowl out with a sign attached prompting your customers to enter a draw, get everyone to submit his or her name, address and email to be eligible to win. But often that list languishes and never gets turned into the lucrative money maker that it could be.

Another option is providing comment cards at the end of each transaction and offer a monthly draw from those who complete the form.
Use several methods if you can. Your goal should be to capture all the names and addresses of all your current customers.
The challenge with collecting them with these methods is that then you need to enter them into a spreadsheet- and over the years we’ve seen this be a barrier for a lot of Business Owners. Even if you delegate the task to a staff member or admin person, it’s a big task that need regular attention.

With technology now, a great solution is to offer them a “reward” for providing that information in the form of a loyalty program, where they earn points and rewards for repeat visits. This is an effective way to start creating a list, especially if the customer can sign themselves up in a rewards app. Customers are so familiar with loyalty programs now that as long as you are offering a strong incentive to join, capturing their information will be easy.

But your marketing plan to your existing customers needs to rely on more than just points and rewards. A customer list’s value is in the ENGAGEMENT it can build between you and your customer, the connection you can forge. This is the superpower you have over the National Chains and Big Box stores. They are too big to be able to do this.

Building a connection creates an iron cage around your customers, making them so loyal to you that you are most often their first choice. Communicating effectively via multiple channels – direct mail, mail, app notifications, social media posts, and texting – is the key to building that strong connection and mining all the money that is held in you customer list.

Today, there is a lot of customer feedback scattered all over the Internet- on online review sites, on social media, even in the feedback forms of your website. And a lot of it is unstructured, too-meaning, there are no questions to guide customers in what they say (like in a survey), so they say what they feel with an honesty that remains unmatched. Just look at Yelp for example.

Feedback often contains valuable information about the customer, but it can be hard for businesses to know where to start when analyzing feedback and can successfully extract actionable data: a way to make sense of the written words.

To begin with, it can be difficult to search for and find all your customers’ feedback, especially in today’s age of social media and online reviews. Trying to know about and listen to every customer driven conversation about your company across the whole planet would seem impossible.

Your customer experience is the determining factor of your restaurant’s success and today’s most important business benchmark, which is why it must be the focus of every part of your company. Success comes when you can effectively manage and improve the relationship between your restaurant and the customer, at every touchpoint across the customer journey.

By capturing and understanding customer feedback, you can determine whether you are providing an experience that your customers love.

Customers want to feel. They are people like you and me, after all. They want to have an emotional connection. They want to get excited and they want to be inspired.

They want an experience at your restaurant they’ll remember.

By managing customer feedback, your restaurant can more easily identify and develop a strong community of advocates for your business: customers who promote your restaurant through word of mouth, online.

How does all this relate to customer feedback? By tuning in to what your customers are saying, you can put them at the center of your restaurant and better understand their wants, needs, and expectations at every step of the customer journey.