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

---

Your Marketing Message - Could You Wring More CASH Out Of It With This Ancient Japanese Discipline?

When it comes to your marketing message, the little things... Read More

Consumer Thinking And Search Marketing

12/20/04According to a recent article by ComScore Networks, about three-quarters... Read More

Ten Reasons Why Most Yellow Page Ads Fail -And Yours Does Not Have to

Grant Directory users are ready to buy Yellow Pages have... Read More

Pay for Performance Pricing Models for Search Engine Optimization

I do think that it is entirely possible for an... Read More

Budgeting for a Postcard Mailing

If you've never done a postcard mailing, you're probably wondering,... Read More

How You Can Make Money From Competitors Easy

Are you market products and services using PPCs? PPC Advertising... Read More

Pre-Cleaning and Updating Addresses in Your Database

When you send a direct mail piece using the Addressed... Read More

10 Start Up Marketing Tips

This list has been compiled as a result of years... Read More

Do I Need an RSS Feed?

RSS has been around for more than 10 years but... Read More

Marketing Strategy - Getting the Marketing Groove

Wouldn't it be great to have a year where your... Read More

Sales Resistance on the Rise

Have you noticed it? More and more marketing campaigns are... Read More

Smart Ways To Rocket Launch Your Profits

If you really want to pull more profits from your... Read More

Direct Marketing Puts Information In The Buyer?s Hands

Direct marketing is advertising from a manufacturer or front-end supplier... Read More

Mortgage Marketing to Realtors ? Creating a Memorable Positioning Statement

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

Trade Show Events ? Do?s and Don?ts

You can love it or you can hate it but... Read More

Use Events to Market on the Internet

Having difficulty knowing what to offer people online? Worried that... Read More

Top Web Site Blunders by Coaches, Consultants and Experts

Of all the web sites belonging to coaches, consultants and... Read More

Go Guerrilla

Jay Conrad Levinson coined the term guerrilla marketing, which I... Read More

The 5 Minute Marketing Plan

If I were to ask you right now, what marketing... Read More

Easy Marketing Methods with Letters, Post Cards, Referrals and Testimonials

Easy Direct Marketing Methods for Insurance AgenciesThis Month: Strategies for... Read More

Top 5 Kick Butt Marketing Requirements

Cinch your success with 8-second leaders! Step into the saddle... Read More

Effective List Management Can Save You Big

Let's talk about how to keep your postage costs down.So... Read More

Practical Advice to Generate Successful Campaigns Using Merged Lists

You could end up with poor results when designing a... Read More

Marketing as a Spiritual Practice II: Unearthing Your Potential

Marketing as we know it is over. Done. Finito.People the... Read More

Creating Your Future with a Marketing Plan

Almost everyone who dreams of starting their own business is... Read More

Is It Time To Kill Your Marketing Program?

Ouch . . . sounds pretty drastic I know, but... Read More

Why Market to Generation X?

Generation X"--the 40 million or so people born between 1965... Read More

The Path To Your Prospects Wallet Begins At His Heart

You want your prospect to make the decision to buy... Read More

How To Let Your Customers Search For YOU! ? Part 2

First I want to welcome you to part two of... Read More

Why Your Sales Copy Should Be Written As If It Will Never Be Read At All!

What is enthusiasm?Well, consulting good ol' Mr. Webster, you could... Read More

Let Your Survey Write Your Business Plan

Most entrepreneurs first write their business plan and then develop... Read More

How to Protect Yourself Against the Hidden Cost of Shipping to Trade Shows

Trade Shows are lots of work, but they can generate... Read More

What Does It REALLY Take to Be Making 6-Figures as a Service Professional?

Over the past 30 years, I've read so much on... Read More