Who doesn’t love free stuff? If your business has a loyalty program that allows customers to accrue rewards points, one of the best ways to encourage people to sign up is the promise of free stuff and/or valuable discounts down the road.
Customers who come into your business for products and services or who make purchases online are ideal prospects for a loyalty program, but what about the customers who haven’t visited your shop lately? What about friends of your customers?
Social media is a great way to spread the word about your loyalty program to potential customers who don’t know much about your business and who aren’t on your email lists. A loyalty program has the same appeal to them as it does to the customers who visit your store: free stuff! So promote the free stuff you do give away! Here are a few tips on how to do that:
1) Conduct a Facebook Poll: If your customers interact with your Facebook page, ask them what types of rewards they would prefer. People love to fantasize about getting stuff for free! Here’s an example:
Q: If you were a member of a loyalty program, which reward would you redeem your points to receive?
A. Restaurant gift certificate
B. Spa treatment
C. Rental car credits
D. Special members-only discounts
Another suggestion is to announce that you’re going to add a new rewards option and that you’re going to let your Facebook fans choose which reward it’s going to be. Then list the options in a poll.
2) Tweet About Point Redemptions: Send a tweet every time a customer redeems their loyalty points for a reward. For example, “Mrs. Jones just received 30% off her oil change,” or “Congrats to Sara J. who just received a $100 gift certificate to Outback steakhouse!” Add a link to information about your loyalty rewards program on your website. The idea here is to encourage your other Twitter followers to think, “Hey wait a minute! I want discounts. I want gift certificates. How do I get that?”
3) Employ Gamification: Run a Facebook contest for your loyalty program members. Encourage them to send in a photo of themselves enjoying their reward or ask them a question like, “If you could have any reward in the world, what would it be?” and have them post a photo of that reward. Whoever is selected as the winner gets more rewards points, of course. And all your Facebook fans who aren’t loyalty program members may just be tempted to sign up.
4) Award Your Fans: Run a loyalty program special just for your social media fans. Offer free rewards points to your Twitter followers and/or Facebook fans just for signing up (within a certain time frame) for your loyalty rewards program. The great thing about this type of promotion is that there is no obligation to buy anything up front, but once somebody signs up there’s a good chance they will want to continue to accrue more points. For your social media fans that are already loyalty program members, offer them extra rewards points if they come in to your store for a purchase within the next month.
It’s a proven fact: Loyalty program members spend more and add more revenue to a business’ bottom line every year, compared to non-members. So the more people you sign up, the more revenue you will get!
Do you have any additional ideas on how to use social media to promote your loyalty rewards program?
Have you ever used social media to promote your program? If so, what type of results did you get?
Sainsbury’s has this whole Twitter thing down cold. Earlier this week, popular U.K. blogger October Jones complained that his chicken sandwich from the grocery chain “tastes like it was beaten to death by Hulk Hogan.” The company’s official PR account promptly responded: “Really sorry it wasn’t up to scratch. We will replace Mr. Hogan with Ultimate Warrior on our production line immediately.” (If you’re not a child of 1980s pop culture, you can rediscover both of the poultry pounders here). Completing a nice Twitter tandem, another Sainsbury’s corporate account replied with a phone number for Jones to call and said the company sincerely regrets that “you had to wrestle your way through the sandwich.”
Sainsbury’s is proving quite responsive to all sorts of unconventional customer complaints. Earlier this year it pledged to change the name of its Tiger Bread to Giraffe Bread thanks to an online campaign that began with a 3-year-old’s letter.
Source: AdWeek.com, May 29, 2012. Author, David Griner.
What would your reaction be if you were October Jones? Would Sainsbury’s use of humor satisfy you, amuse you or make you even more disgruntled?
How you tried to use non-conventional response types (like humor) to customer complaints? Did they work?
In what ways does this major retailers’ example lead you to evaluate and potentially change the way you interact with your customers on social media platforms?
What’s the most incredible act of customer service you have ever performed for a customer, and did it inspire their undying loyalty? In this story by Peter Shankman, he recounts how after a long travel day he boarded a plane, tired and hungry. As a joke, he tweeted out to Morton’s steakhouse to please have a Porterhouse waiting for him at the airport when he landed. Of course he was not expecting any response, but guess what? At the airport Morton’s was there, waiting for him with a Porterhouse.
Shoe purveyor Zappos is also well-known for its great customer service. When this blogger’s mother was suffering from health issues and related problems with her feet, she had to return some shoes to Zappos and ended up getting into a long conversation with the customer service agent. The customer service person sent a bouquet of flowers to the mother and gave the mother, daughter and sister VIP memberships. The sister vowed to buy every pair of shoes from Zappos from then on.
And there’s the famous example of Southwest Airlines holding a plane flight for a grandfather who was flying to Denver to see his three-year old grandchild who had been beaten to death by his daughter’s live-in boyfriend, and who was scheduled to be taken off life support that night. When the grandfather arrived at the gate twelve minutes late for his flight he was shocked to find the plane still there. The pilot said, “They can’t go anywhere without me and I wasn’t going anywhere without you.” Cost of delaying flight: who knows and who cares? The knowledge that Southwest did the right thing and the amount of goodwill it created: priceless.
Of course, you don’t have to be a restaurant, retailer or an airline to provide outstanding customer service. Opportunities exist every day in your business.
When was the last time you dealt with an upset customer or noticed that a customer seemed stressed? What did you do? Did you avoid them, get defensive, or did you ask questions so you would understand their concerns, stresses, problems or fears? Then did you go out of your way to provide a service that was above and beyond what was expected?
What is the best customer service experience that you have ever had? Did it inspire your loyalty to that company?
What acts of customer service have you or your co-workers provided that created loyal customers for your dealership?
Real Results: Clever iPad Promotion & New UltraCare PPM Program Helps Hare Chevrolet Crush Aftermarket Service Shop Competition
I have been doing regular blogs about successful promotions in dealerships that come to my attention. In this blog I wanted to let you know about a prepaid maintenance (PPM) plan promotion that was extremely successful at Hare Chevrolet.
Hare Chevrolet has improved customer retention and increased its customer-pay RO count by 12% since instituting a dealer-branded prepaid maintenance program earlier this year. The program, which launched in March and is dealer administered, has produced an average of $171 upsell on every customer pay retail repair order.
The dealership is in a highly competitive market place surrounded by four after-market repair shops. The program has helped the dealership come out on top of its competition by ensuring service customers return to the dealership for future vehicle service needs.
The program, which focuses on selling maintenance plans to existing customers in the service lane, was kicked off in March with a service advisor sales incentive of an Apple iPad if they hit a quota of 22 plans sold. The incentive proved successful with all five service advisors exceeding their quotas resulting in 127 UltraCare plans being retailed to existing service lane customers.
The dealership has continued the success of the incentive program by building in PPM sales as part of the service advisors’ pay plans. Hare Chevrolet now averages 62 plans sold per month, 80% of which are sold out of service and 20% out of F&I. Customers are much more likely to purchase a maintenance plan in service when they don’t have competing F&I products to consider and the loan to value issue is gone.
The dealership sells the plans at a cost basis. Rather than try and make a profit they are using these plans as a great retention technique, which is working well with retention rates increasing about 5% per month. However, an added bonus is that the average customer that visits for a simple oil change ends up spending an additional $171 per RO, so it is incredibly profitable as well.
Based in Noblesville, Indiana, Hare Chevrolet continues to hold the title of the country’s longest-lived family-owned vehicle retailer. Today the Chevrolet dealership sells about 400 cars per month and employs 150 people. Current managers Courtney Cole and Monica Peck, who are the great-great-great granddaughters of original founder Wesley Hare, offer 50 service stalls, and about 1,000 new Chevrolets in its sales lot.
The latest in technology has allowed the dealership to keep in front of the pack in a fiercely competitive market, while also maintaining loyal customers.
What employee incentives do you use to promote upselling?
What techniques have you used to differentiate your store from your competition?
Many of the so-called loyalty programs in operation today don’t really develop loyal customers at all; rather, they create “frequent” customers. Loyal customers do more than just visit your business more frequently than other customers; they are your businesses’ best marketing tool and your biggest fans! They want your business to do well, and they ensure that you’re there for them when they need you by sending more business your way. Besides bringing their own business to you, they encourage others to do the same.
These loyal customers are the most valuable assets businesses have, and yet many loyalty programs provide these customers with the same standard treatment every other customer receives. Good loyalty programs, rather than “frequent customer” programs, recognize and value customers for their loyalty, rewarding them for more than simple patronage. And by keeping its best customers happiest, businesses reap their own rewards through several channels of business growth.
Below are 15 key business benefits of properly implemented loyalty programs. We recommend you evaluate each one to determine how well your loyalty program is providing each benefit:
1. Retain Existing Customers: Not only do loyalty programs provide tangible incentives for continued patronage (via earned points, etc.), programs collect customer data that allows a business to better meet the needs of its individual customers. This provides for more targeted and customized service, making the consumers more likely to remain customers.
2. Acquire New Customers: While it should not be the central focus of any loyalty program, acquiring new customers is essential to any business and should be a benefit of your loyalty program. How effectively your program attracts new customers will depend on how exciting and how valuable the rewards seem to the target audience. Use your program data to determine demographics of your most loyal customers; then target prospective customers with similar demographics in acquisition campaigns.
3. Move Customers Up to Higher Tiered Rewards Levels: Build into your program the ability for customers to “graduate” to higher rewards when certain thresholds are met. This will encourage lower spenders to increase their spend in order to move up to better rewards brackets.
4. Filter Out Unprofitable Customers: It can be more expensive to retain bad customers than it is to acquire new ones. Customers who only purchase during times of sales and discounts can cost you money rather than increase sales. Design your loyalty program to reward better customers without rewarding those just watching for the bargain buys. Professor Philip Kotler’s adaptation of the Pareto Principle states that while the top 20% of your customers generate 80% of the profits, the bottom 30% of your customers eat up 50% of the profits generated by the 20%. Ensure your program is only rewarding the customers actually bringing in business.
5. Recover Orphan Customers: Salvaging former customers can be infinitely more effective – and much less expensive – than acquiring new customers. Discover what it takes to win back old customers and target this group with “We’ve Missed You” campaigns. Then ensure their new experiences with your business are positive and meet their needs.
6. Increase Customer Lifetime Value (CLV): It’s easy to get discouraged or underestimate a customer’s value when you are viewing their transactions in isolation. Look instead at the bigger picture. Determine what your best customers bring in through lifetime patronage and focus on that when interacting with them. When your customers are valued not simply for one purchase here and there, but for their lifetime business with your company, their loyalty – and their lifetime value – will increase.
7. Target Your Best Customers: Best Customer Marketing (BCM) involves spending more time, energy and resources on your best customers in order to maximize the ROI. Use your loyalty program data to determine who your best customers are, then recognize and reward them.
8. Build Relationships: Always remember that customers are people too. When your program is focused on the “human” aspect of customers, it will go further toward building customer relationships, which in turn leads to improved loyalty – and profits.
9. Create Advocates: Advocacy is one of the highest forms of loyalty a customer can show. They are so satisfied with your products and services that they feel compelled to share their experiences with friends and family. And any good marketer will tell you that word-of-mouth marketing is far more effective than any amount of promotional material.
10. Adjust Pricing Levels: A good loyalty program can help develop solid pricing structures. If customers are happy purchasing products at a particular price, why discount it? You can also use your loyalty program to study the effects of prices changes (e.g. what customer segments’ changed their buying habits when the price changed?).
11. Respond to Competitive Challenges: By monitoring customers’ purchase histories when new competition opens nearby, businesses can quickly and accurately identify what customers defect to the competition. These customers can then be enticed back with customer-specific incentives, special offers and even direct contact.
12. Select Product Lines Effectively: By knowing your best customers’ buying habits, you can more accurately predict which products lines to keep in stock, which to expand and which to discard entirely.
13. Plan Merchandising Optimization: Again, monitoring customers’ purchase history can allow businesses better determine which inventory items need to be ordered and when, as well as more strategically place merchandise on the sales floor.
14. Reduce Promotional & Advertising Costs: Targeted marketing efforts, through loyalty program data, allows businesses to zero in on specific customer segments, to reach the right customers with the right message at the right time.
15. Selecting New Business Locations: Your loyalty program provides you with valuable details on your customers’ demographics and geographics, allowing you to choose new business locations that would be the most profitable for you and beneficial for your customers.