Loyalty Cards ? Tips To Consider Before Committing To One

Loyalty marketing has been around for as long as retailing ? attractive stores, good service, and a quality product line all contribute to building up a loyal customer base.

With the growth of larger stores, a relatively new marketing component ? the loyalty card - has been added by many retail outlets. This is in an attempt to offset the lack of personal contact in the larger stores, and with that, the lack of knowledge of individual customers.

Despite what any loyalty card vendor tells you ? merely introducing a loyalty card scheme will not suddenly buy you customer loyalty ? the overall customer experience is the key.

So if a loyalty card doesn't buy you loyalty, why bother?

The primary purpose of a loyalty card scheme is quite simply to provide information on individual customer behaviour.

Retail stores do not capture customer details when recording a sale on a Point Of Sale device. A loyalty card ? with its unique customer ID ? provides the vital link between products sold, and customer demographics. It also provides ? for the first time ? an indication to the retailer who their regular customers are, and what the value of purchases are for each customer. Equally important ? when a customer signs up for the loyalty card, they provide their contact details, and ideally, details of the members of their family.

Consider These Points Before Rushing Into A Loyalty Scheme

* A badly implemented loyalty scheme is merely a form of price discounting. If the scheme does nothing to improve your sales, and you issue a price rebate when a customer's sales reaches a certain level, then all you have succeeded in doing is give away margin.

* Once launched, loyalty schemes are difficult to shut down. You will be taking away something that some of your customers perceive as a benefit, and so this can cause some dissatisfaction amongst certain customer segments.

* The primary purpose of a loyalty scheme is to gather information. Gathering this information is pointless if you don't have a plan on how to use it. If you don't have access to some analytical skills, and no marketing campaign capability to use your new-found customer knowledge - don't go down this path.

What Do I Do With All This New Customer Information?

The key activities that this customer information enables are:

* You can identify your best customers, and will know what they buy, how often, and when you last saw them.

You can now focus on nurturing these customers - with special offers, or a short newsletter keeping them informed of new products that have just come in, or even pre-sale viewing so that top buyers get first crack at items going onto sale.

* You can look for the common characteristics of your best customers, identify what is the most effective way of marketing to that segment, and then advertise in magazines this segment is most likely to read - thereby attracting more higher value customers into your store.

* You can look for customers who do not buy as often, but who have similar demographic and lifestyle characteristics to your best customers. This segment offers the best opportunity - via various marketing campaigns - be 'grown' into joining the Best Customers group - through enticing these customers to allocate a greater share of their wallets to your business.

* You can introduce a referral program - where you offer your best customers some sort of reward or prize for introducing some of their friends. Normally like associate with like, so you have a good chance of gaining other high value customers through this highly effective, but low cost way of growing a quality customer base.

Loyalty card programs - correctly implemented - can assist in growing your base of highly profitable customers. This can only work, however, if the other components of your business - in-store experience, quality products, good service culture, analytical capability, and marketing campaign smarts - are in place. Make sure that the foundations are in place before your leap into a loyalty card scheme.

© 2005 Intellinova (Pty) Ltd. - All Rights Reserved

This article may be reprinted, provided it is published in its entirety, includes the author bio information, and all links remain active.

For the past 20 years, Jeff Walters has been actively involved in transforming raw business data into profit-producing strategic information. He has worked in various data intensive sectors- banking, insurance, gambling, medical, government - leading several data-to-information projects: ABC Costing, analytical CRM, datamart /data warehouse development, and Balanced Scorecard.

If you want to convert your raw data into strategic assets, contact Jeff Walters through the following sites: Customer Relationship Management, or Direct Marketing

---

Lack Of Business Isnt Always The Problem

When you're just starting out in business, it's a safe... Read More

Your Headlines Are Key To Your Success Or Failure. Do You Know What To Write?

Most professional copywriters would say that headlines account for 80%... Read More

The Biggest Problem With Your Marketing Is...?

What is the biggest problem most marketers have? Who knows.... Read More

How Effective Customer Surveys Will Help Innovate Your Business

Have you ever wondered why the phones aren't ringing the... Read More

AIDA From A Different View - I Call It the 5 Ws

My childhood was my foundation for how I write and... Read More

Walking Talking Advertisements

So you've made a sale. Great!Now what? You're not just... Read More

Trapped in Your Comfort Zone? Break Out and Send Your Marketing Skyrocketing

A marketer whose advice I generally respect recently published an... Read More

Mortgage Marketing to Realtors ? Creating a Memorable Positioning Statement

Mortgage marketing to Realtors involves having a crystal clear position... Read More

Web Site Marketing Strategy: 8 Ways To Increase The Perceived Value Of Your Freebies

It is a well known web site marketing strategy: To... Read More

Private Practice Marketing: 3 More Secrets I Wish I Knew When I First Started Out

Secret #4 - Get very comfortable asking for paymentOne of... Read More

How to Save Thousands on Your Marketing

Marketing can be expensive. It doesn't have to be, but... Read More

Top 10 Marketing Pitfalls

Ten Marketing Pitfalls By Stuart ReidIf you want to make... Read More

Packaging Trends You Cannot Overlook (Part #2)

Part #26) Food safety is becoming paramount.What this means to... Read More

Ten Crucial Questions

Ten Crucial Questions for Your Business Future I'm... Read More

Online Advertising Versus Traditional Media Advertising

Before I compare today's online advertising with traditional media advertising... Read More

The Importance of Business Marketing

Business marketing is one of the most important parts that... Read More

Postcards: Awareness Tool or Selling Tool?

Are postcards better for building awareness or for selling?In my... Read More

Always On Stage - 3 Quick Tips for Trade Show Exhibitors

Do you feel uncomfortable when you're in the trade show... Read More

Linking Features & Benefits

I'm sure that you've had those Eureka! moments, too. When... Read More

Why You Buy

Behavioral economics is a new science that sheds light on... Read More

Four Super-Deadly Marketing Sins - And How To Fix Them

It seems nowadays every marketing guru and their brother-in-law has... Read More

How to Run a Successful News Release Program

Marketing public relations gives you cost effective ways to reach... Read More

Plant a Seed and Watch Your Business Grow

Do you have all the business you could possibly want... Read More

Meaning and Marketing - The Hurricane

I step outside my back door and look at some... Read More

How to Avoid the Line Extension Trap

If you follow the prevailing logic of most modern companies,... Read More

Website Marketing: 10 Uncommon Bonuses That Will Help Make Your Product Hotly In Demand

Giving away free bonuses is an important website marketing secret... Read More

5 Tips to Grow Your Business Globally

Entering into Global markets is a great way to organically... Read More

The Magic of Keep-in-Touch Marketing

Yesterday I received a phone call from an acquaintance that... Read More

Fax Marketing : Reaching a New Niche of Customers

Traditional marketing and advertising assumes that all of your customers... Read More

Produce More Sales from your Email Promotions - Part 2

Do sales come from your ezine regularly? How many well-written... Read More

How to Put the Profit Producing Power of Couponing to Work for You

Coupons have proven themselves to be highly effective sales tools... Read More

Marketing Got You Stumped?

It's not unusual for entrepreneurs to find the whole idea... Read More

Writing Marketing Copy That Sells

When your prospects see your marketing materials, your brochure, your... Read More