Customer Loyalty and the Humble Yo-Yo, Part 2: Doing Away with 'No Strings Attached'
The humble yo-yo has very few parts, and none are more important than the string. Having the string attached to the wooden or plastic body of the yo-yo creates the entire experience; without the string, there would be no swinging of the yo-yo and no ability so spool it out, return it or perform tricks. In this regard your customer loyalty is similar, as without the "string" of purchasing products attached to receiving loyalty rewards the program couldn't exist at all.
In the second part of our series Customer Loyalty and the Humble Yo-Yo we'll explain why trying to promote a "no strings attached" message to your loyal customers is a mistake and why you should embrace the social contract created when a customer joins your loyalty program.
Embrace the Fact That You're Not Fooling Anyone
Regardless of your industry or customer demographics you can rest assured that when it comes to your loyalty program, your customers are well aware that it is a marketing program designed to drive additional sales. It's not worth trying to hide or gloss over by making claims that there are "no strings attached" – you're not fooling anyone and it can actually come off as insulting to a customer's intelligence. Of course there are strings attached! In essence, you are trading a discount or reward in exchange for the prospect of repeat business. Your customers know that this is part of the agreement, so it's best to embrace it from the beginning and avoid trying to cover it up.
Consider Having Some Fun with the "String"
Depending on your industry or niche you may find that you can be a bit more playful with your customers. For instance, you could have each customer sign a "Pledge of Allegiance" which requires that they return to your stores regularly or risk being considered a traitor to the cause. Or you might require that a customer has to do something silly like take a funny-faced shot for your Instagram account before they'll be admitted into your customer loyalty program. You'll of course want to ensure that whatever you create is actually perceived as funny and doesn't end up backfiring and causing a negative reaction, so if you decide to go down this road you'll want to test heavily before rolling it out to everyone.
Ask Yourself: How Much Support Will Your Customers Show?
Are you reading this blog post from a computer made by Apple, such as a MacBook? If so, when you first bought your machine you would have received a small white Apple logo sticker about the size of your palm. Do you know where this sticker is now? Did you stick it somewhere conspicuous so that others could see that you're a loyal Apple supporter? Even if you don't own an Apple product, there's a good chance that you've seen these stickers dozens or even hundreds of times, all willingly displayed by loyal customers who are rabid supporters of their favourite brand.
As you develop your customer loyalty strategy, it's worth spending some time considering how much support your most loyal customers will show. Would they proudly slap a sticker of your logo on their laptop lid, on a school binder, or on the back of their car? Is there another more industry-specific means for them to show that they are loyal to your brand?
If you can find a way to get your loyal customers to display your logo or message – in essence, helping you to advertise – then you should find a way to increase their loyalty discount or reward accordingly. For example, consider how some online t-shirt shops will offer special discounts to customers who take photos of themselves wearing a product and share it out on their social networks. These customers know there's a "string" attached to receiving their loyalty reward, and they are more than happy to hold up their end of the bargain.
Being Exclusive is Nothing to Be Ashamed About
As the old adage goes, "the only clubs worth joining are the ones that won't accept you." With this in mind, ask yourself: how exclusive is your customer loyalty program? Can any customer sign up for free after a single purchase and immediately start receiving some sort of benefit? Do you have tiers built in to your program with progressively better rewards offered as a customer spends more in your stores? Exclusivity is a way to recognize your highest-spending customers while adding a competitive edge to encourage your loyal customers to spend more in order to unlock greater rewards.
Highly exclusive customer loyalty programs can also provide additional benefits such as word-of-mouth marketing. An excellent example of a very exclusive program is the American Express "Centurion Card", which is an invite-only charge card offered to clients who have a high net worth and consistently high spending. While you may have heard about this titanium credit card, what you may not know is that American Express only created the card after years of rumors about the mythical "black card" which was supplied to their elite customers – a card which didn't actually exist. The Centurion Card offers incredible rewards to its holders, such as complimentary companion tickets for international flights, personal shoppers at high-end retailers, free hotel nights in five-star chains and more. As such, there are a great many American Express customers who spend as much as they can on their cards in the hope that they are invited to pay a $7,500 initiation fee and $2,500 annual fee to be a Centurion Card member.
In short, having some exclusivity in your customer loyalty program is nothing to be ashamed of. If you currently don't have a way to recognize your elite customers, an exclusive tier may be worth considering.
When you're ready to build a customer loyalty program that will increase your engagement and drive additional sales revenue, we're ready to help. Contact Retail Hero at your convenience at 1-888-RTL-HERO and let's get started.
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