Brand name and exclusive offers did win customer base at a certain point of time but now its all about Loyalty. Creating customer base did lead to business attrition but along side Customer Retention programme was parallely important to pace up with the ongoing rapid competition. To resolve this issue, marketing gurus introduced customer loyalty programs with the intention to reap rewards and benefits for customers and boost loyal buying behavior. To ensure if customer loyalty programs get the desired results, they must be well executed.
Airlines and retail chains were the earliest industries to adopt the practice of rewarding their customer through loyalty incentives. They brought in different card systems such as loyalty cards, reward cards, points and advantage cards. These cards often have barcodes which aid in further identifying the buying behavior of the customers. Some companies even promote membership programs to reward customers with consistent buying patterns.
As the average customers are becoming smarter and aware, it’s becoming difficult to cater to all their demands. Customers expect value for money, at all costs. They expect a polite approach from sales and service representatives. Moreover, they want to be appreciated for their patronage! Keeping these smart customers in mind, loyalty programs are designed to test customer retention strategies. These programmes keep the competition at bay and act as motivators for customers to continue using the same service or product. Moreover, customer loyalty programs also provides database for further customer relationship management.
The whole point of rewarding a customer with better prices or services is to encourage them to repeat their behavior. If rightly executed, a customer loyalty program can dramatically increase profitability. Retaining existing customers is relatively easy on the budget than targeting new ones. In the final analysis, costs incurred on any loyalty program that promises to retain customers is money well spent.
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