What Is The Goal Of Your Customer Loyalty Program?
While this may seem like an easy question, it has many answers. The real question you have to ask yourself when examining your loyalty program, however, is what would you like your loyal customers to do?
Three Customer Groups
The goal of many programs is to make sure the top consumers of the program are rewarded. The main reason this is done is to 1) keep them as our most loyal consumers, and 2) to add to our numbers the amount of consumers we would consider our “most loyal.” Most customers fall into three basic groups:
1. Top 20%: The group we all love and fight to keep is that top 20%. They are loyal and do all the positive actions we hope from a customer.
2. Middle 60%: These are the everyday consumers. They come and go and do most of the things we want. They are the type that use our programs most of the time.
3. Bottom 20%: The third group is the bottom 20%. They are the ones that have fallen off. They use our program some, but not very often. They are the ones whose points are about to expire.
The very best programs take all three groups into account. Why leave anyone out? In reality, we want them all, right? A great program will keep not only the top tier happy, but growing. The second tier will work to become part of the top tier and the bottom tier may eventually grow and come back. Pushing each group higher is the ultimate goal.
The planning and budgeting phase of any loyalty program can make or break it from the very start. The question that you need to ask yourself is: for what types of actions do I want to reward people? How can I get them to keep moving up from one group to the next? The simple answer is, you want to reward them for taking the actions that you want them to take. Just because it is the simple answer does not make it simple. It can lead to many other questions.
The next thing you have to answer is, what are those things I want my customers to do? That can be any number of things from simply purchasing a good or service, to being a spokesman for you. It may mean that you not only want them to make a purchase, but that you may want a specific item purchased on a specific day.
We would love to hear your thoughts in the comments section below.
Contact me today to refine the goals of your loyalty program at firstname.lastname@example.org
DBG Loyalty is a leading innovator in loyalty and rewards marketing. DBG was founded in 2002 because the industry was looking for a trusted technology leader who could develop and establish consumer loyalty programs. DBG has customer relationships which span from the time of inception.
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