Barbara Wold, International Speaker, Author and Business Strategist and Global Retail, Consumer, Hospitality and Tourism Expert, is one of the most knowledgeable “how to” women I know in the field of business growth.
We had the privilege of hearing her expertise first hand at the EDGE series last year.
With her permission, I am reprinting her take on “What keeps customers coming back?”
“The first and most important reason, of course, is the quality of your product or services and the way your company is run.
If your sandwiches are lousy or customers have to wait too long at lunchtime, it won’t matter if you have a punch card for your sandwich shop.
One of the best ways to cultivate happy, loyal, and long-term customers is to consistently give them an excellent product or service.
But this isn’t enough for every company and even if you have a terrific product or service, you’ll need to make special efforts to retain customers.
This is particularly true for new and very small businesses. So, consider how you might institute a “loyalty program” to keep customers attached to you.
“All loyalty programs have basic attributes:
• The customer gets a reward—a discount, freebie, upgrade or special service—for being a regular or big customer.
• There is a way to keep track of the customer’s purchase—you can have a sophisticated computer database, a handwritten ledger or a simple punch card.
• Generally, but not always, the customer gives the company his contact information, which enables the business to keep marketing to and communicating with him.
“Some structures of customer loyalty/reward programs:
• A free reward after multiple purchases: Enticing customers to keep coming back to you by offering them something free after they make a certain number of purchases.
Examples: a punch card at a car wash, where you get your 10th car wash free or 10th purchase at your favorite coffee shop.
• Buy-ahead discounts: A significant discount or freebie for buying multiple products or services in advance. For example, getting 12 months’ membership in a gym for the cost of only 10 when you buy the entire year at once or a month’s appointment of manicures for a discount.
• Upgrades/special services: Many customers want special treatment (or better products) because they see themselves as a valued customer. Examples include giving free conditioning treatments to a regular patron of a hair salon or a complimentary appetizer at a restaurant. Or just a small gift for no reason!
• Discounts after purchase: Discounts given as a reward after a customer makes a purchase, to both encourage future purchases and to thank customers, especially if it is their first time in your shop. For example, giving a client who’s just used your catering service a discount to receive free desserts for their next catered event.
“From time to time, evaluate the cost of your loyalty/reward program. Are you giving free “stuff” to customers who would have been buying from you anyway? Are your rewards eroding away your profit margins significantly? If so, adjust the terms and nature of your program … but continue your program! Happy customers will talk to friends.
“Don’t’ forget: The longer a customer remains with you and continues to buy, the more profitable the relationship. That’s why it pays to reward customers and keep them loyal to you.”
At one time I belonged to BNI (Business Networking International) whose motto is “Givers Gain!” From personal experience, yes, it works!
Esther Kenyon is the Seal Beach Chamber of Commerce CEO.
