Loyalty programs: Good customer service or necessary evil?
When it comes to customer loyalty programs, there are two schools of thought. The first is that providing enticements to customers should not be necessary and is a cost without great reward for the company. The second is that offering rewards to your customers is just good business and inspires, well….loyalty.
Over the past few years, rewards program companies have cropped up. Some are better than others. Some understand the nature of customer loyalty and some are just going through the motions. If you will be looking to start a customer loyalty, be sure to do your research before choosing a vendor. Once you start, you are stuck with what you purchased unless you want to give your customers whiplash and degrade customer loyalty.
So should you employ this type of customer engagement? That depends. You first need to ask yourself some questions:
- Are you customers repeat customers? If you sell something that people don’t buy very often, having a customer loyalty program probably won’t change that.
- What reward could you offer that will get your customers to come back? If you own a restaurant with a very high price point, getting a $5 credit after 5 visits is not most likely going to be a reason to come back.
- Can you use a loyalty program to encourage customer referrals? These types of programs aren’t just to bring current customers back, but can be used to garner new customers as well.
Do you have a customer loyalty program? How is it going? Have you had growing pains? Let us know about in the comments or on social media!