5 Tips for an Effective Customer Loyalty Program

Customer Loyalty Satisfaction Support Strategy Concept

While visiting a newly opened Cinemark theatre here in Los Angeles I encountered a most innovative example of a customer loyalty program. Definitely somebody thinking outside of the box and coming up with a method for transforming the proverbial “stick” into a “carrot”.
In this new age of our all feeling as if we must be connected to our smart phone at all times, movie theater admonitions to silence and refrain from using them are like flight attendant pre-takeoff safety talks. But Cinemark has developed an app for your phone that allows you to enter “Cinemode”. If you do so when prompted before the movie and keep it in silent mode and refrain from using it during the movie, you receive rewards.
Digital coupons for discounted concessions and tickets are then automatically sent to the “Rewards” section of the App. The first effect is Cinemark avoiding coming across like a parent or teacher admonishing a child be polite and courteous. But it also transforms the desired result into a positive experience rewarding customers for their participation and incentivizing them to return.
That last item is what an effective customer loyalty program should do whether your business is involved in B2C, B2B, “Brick & Mortar” or Ecommerce. Cinemark is actually a combo since their “product” is the in theatre movie experience but the ticket buying process is more frequently occurring online (and its rewards program is only a part of the App that provides movie show times, seat reservations and of course ticket purchase).
Every business, small or large, should determine if it would benefit from a formal Customer Loyalty program. If so, properly designing the program is essential for it to be effective and most importantly, produce a return on your investment of time and resources in implementing it. Consider these 5 tips for an effective program:
KISS – You know, keep it simple… smarty. Customers being able to easily participate is a good thing. Avoid too much fine print type stuff such as, “Get a free burrito when you buy 5 (except for those purchased between noon and 2 on weekdays).” Making it difficult to participate will result in an unrewarding program for your customers.
Provide Clear Value – Just like you need a good value proposition to get customers to pay for goods or services, you need a good one for them to participate in your loyalty program. Studies show that over 90% of customers rate the type of reward as “very important” or “somewhat important” when they decide whether to participate in a loyalty program.
Application Throughout Sales Funnel – See how your program can touch customers in whatever way they interact with you. In the Cinemark example, when customers check out movie times, its App reminds them they have a digital coupon in the rewards section that can be applied to their next visit. If you keep up with your customers via social media, determine if rewarding them for likes and follows is a possibility. Over one third of the population considers themselves loyal to one brand and they also are more likely to respond to advertisements for it via social media.
Avoid the Big Numbers Trap – Don’t get obsessed with just getting as many customers into the loyalty program as you can (it’s not akin to “If you build it [big], they will come”). Instead make it relevant to your customers and especially the most valuable ones to your business. For example, maybe its not designed for returning regulars that buy mainly lower margin products, but instead to incentivize those that buy bigger ticket items.
ROI” Measurement – Your customer loyalty program is just like any other marketing effort and you need to know if you’re receiving a return on investment. And you should be thinking about your metrics at the same time that you’re designing the program. For example:

  • Big picture numbers to see just how many customers are actually participating.
  • Conversion figures as to whether the program is causing them to buy and if so, how much more than they normally would.
  • What are customers saying and how do they feel about the program (i.e., survey them about it).

That brings us back to the Cinemark example. There was quite a positive buzz in the theatre when patrons were prompted to enter Cinemode on their smartphones. And I for one can say that I told many friends about the experience in the days that followed. Not much more that a business owner could hope for as a return on investment from a Customer Loyalty Program.
LAD Solutions has a team of website development and design experts that can assist you with implementing a customer loyalty program via your Ecommerce or Brick & Mortar website. To learn more about our website development services please call (888) 523-2926, or click the button below to submit your request, and one of our representatives will be in touch with you shortly!


DATE: Mar 31, 2015
AUTHOR: Ali Pourvasei
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