Business competition is getting more and more challenging and furious in recent decades. Consumers are presented with an ever increasing amount of choices while they become increasingly choosy in their spending habits. Consumer demands these days are also more complex and volatile. With such challenges, customer loyalty can either soar or doom a business.
Pareto’s principle of the 80/20 rule reveals that typically about 80% of revenue comes from just 20% of customers. Such a skewed distribution makes it a sensible strategy to concentrate most of the company’s resources on the 20% of customers.
It is commonly known that seeking new customers will cost much more than retaining them. Therefore, without busting the company’s budget while maintaining competitiveness, there are a number of cost-effective sales promotion ideas that can be used to the company’s advantage. One good idea is customer loyalty programs that will generate great effects in the sense that they cultivate customers from an existing customer base. A properly targeted customer loyalty program can offer several benefits. A good program can lower costs, elevate customer value over the lifetime, and ultimately, solidify a customer base that will be loyal to the company’s brand. Loyal customers are ever so eager to communicate their appreciation towards the company’s products and services to the tune of approximately 52 other potential customers through referrals.
Loyalty programs are relatively easy to implement and once properly implemented can be great avenues to not only retain current customers, but also a surefire way to improve business sales. It seeks to bond customers to the company’s products and services and helps to motivate customers to make their next purchase which directly lends their support to the other aspects of the company’s offensive and defensive marketing strategies.
Database technology can be used to establish a personalized dialogue with customers. The communication can be almost instantaneous with the social media of today. Email blasts can reach every customer you have in an instant. Regular mail still is a valid option for sending post cards and notices.
Contact with your customer base is essential and in today’s economy CONTINUOUS contact is even more crucial to establishing customer loyalty and repeat business. The main thing to insure is the quality of your communication. Make sure the information, sales, bargains, opportunities, etc. that you are communicating to your customers is what they want and need. Failure to heed this requirement will lead to landing you in the junk mail heap both electronically and with regular mailings. You should also give your customers something that can use NOW… and not have to accumulate over periods of time. Everyone loves immediate gratification!
Will customer loyalty programs work for your company? The benefits are there to be tapped and the implementation is simple. The rest is to understand the customers’ expectations and meet their needs in order to maximize their participation in the program and prevent any defection. Need to know more about loyalty programs, visit me in RESTAURANT DATABASE SERVICES.
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