Customer Experience News & Trends

Customers join loyalty programs, but don’t use them: 5 tips to make yours work

Customers love loyalty programs so much that they enroll in them all the time. But once that’s done, they don’t participate. Here’s how to make yours worthwhile.

Loyalty is tougher to gain these days because the Internet makes it so easy for customers to compare and jump from company to company. So more and more companies — B2Bs and B2Cs alike – try some sort of loyalty program in an attempt to generate repeat business.

Customers respond, too. Most people are enrolled in about 11 loyalty programs, a Bond Brand Loyalty survey found. The problem is, customers are only active in about seven programs, the researchers found.

Do more than build a plan

On the bright side, some loyalty plans and efforts work really well: A third of the customers in the study say they stay with a company because of its loyalty program.

Still, most customers don’t stay loyal because of the plan alone. So a great plan needs to be coupled with consistent experiences and outward efforts to maintain the relationship.

Some tips for producing a more effective loyalty program:

1. Reward better

Loyalty plans work — if customers get real benefits out of them. Many organizations find that customers want better experiences over more discounts or promotions as their rewards. On the flip side, small trinkets and occasional perks don’t win loyalty.

The best loyalty program perks often include upgrades and special access to new products and better service. For instance, Neiman Marcus’ InCircle loyalty plan rewards customers with alterations and dining experiences (in addition to gift cards).

2. Make the experience easier and better

Who doesn’t like less hassle? Customers stick with companies that do the most for them, acknowledging that customers’ time is valuable.

For instance, Zane’s Cycles assembles bikes for customers so they can use them right away rather than spend hours putting the bikes together themselves.

3. Make a wrong right, right away

Research has proven that customers who report problems or errors are more likely to be loyal than customers who never experience an issue — if someone resolves it quickly. Errors can actually be a loyalty-building tool. (Of course, you never want to cause a mistake in an effort to build loyalty, because outstanding experiences will always trump errors.)

To speed up resolutions when there are issues, companies want to give front-line employees the power to fix almost anything immediately. At Ritz-Carlton, employees have the authority to spend up to $2,000 on the spot to make customers happy. While you might not stretch it that far, every employee should have the authority to throw in a bonus — a discount or gift — to make up for customers’ inconveniences when they fix an issue.

4. Get personal

Many companies find that they can build bonds with loyal customers (and customers they want to be loyal) by giving them one point of contact — like a sales or service pro — they can call directly for help.

One example of this is that New York Giants football season ticket holders get the name and number of a team employee who handles their questions and requests immediately. It helps fans feel connected to more than their favorite team or player. They feel connected to the organization — so even in a losing season, they don’t become fair-weather fans.

5. Include them

Getting customers’ opinions, and more importantly, using them will get them to stay because they clearly see that your organization values them and the relationship.

Use your loyalty plan members as a sounding board for what’s to come. Ask customers for their opinions on possible products or services. Get feedback on their experiences and what they think the ideal experience is. Include them in focus groups and phone calls for feedback — not just impersonal online surveys.

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