Cally Loyalty Marketing Blog

Are you in the repeat customer business? …You better read this

October 20, 2014

Repeat business welcome

If your business relies on repeat custom to survive and thrive then you should be doing everything you can to develop an ever larger group of loyal customers, brand ambassadors that know and trust you and shop regularly at your business. A key way to drive repeat custom is through some form of loyalty reward. Not so sure?  …Well here are three reasons why this form of marketing will change how you do business – for the better, for ever. And why you should start loyalty marketing today.

If your business relies on repeat custom to survive and thrive then you should be doing everything you can to develop an ever larger group of loyal customers, brand ambassadors that know and trust you and shop regularly at your business. A key way to drive repeat custom is through some form of loyalty reward. Not so sure?  …Well here are three reasons why this form of marketing will change how you do business – for the better, for ever. And why you should start loyalty marketing today.

1.     Loyalty marketing helps to build equity in your business

For any business advertising matters, it is the way you connect your service or products, your business to your customers. As IBM's Thomas J. Watson Jnr said, "Nothing happens in business until something gets sold." Money gets made when you connect to your customer in a cost effective way and make a sale. Generally, the way a business connects to a customer is through advertising. However, finding cost effective advertising can be difficult. Typically advertising can fall into two distinct types.

Traditional (Rental based) advertising

This is form of external advertising which you pay a one-time fee for a period of advertising – this may be a yellow pages ad, an advert in your local newspaper or a leaflet that gets distributed door to door. Rent based advertising is a bit like renting a flat where after a period of 5 years you don’t have anything of real value to take away (bar the deposit if you’re lucky). It is the traditional way of advertising and is the most common.

Equity marketing works differently

Big brands understand equity marketing – The businesses of Tesco, Sainsburys, Starbucks use this form of marketing to build value into their business. Equity marketing will help your business thrive over the years. It involves building customer lists and marketing to those customers at a fraction of the cost of traditional rent types of advertising. Over the months the relative cost of this form of advertising reduces as your customer base grows. It’s also called equity marketing because if at any stage in the future you want to sell your business and you have a large list of repeat customers then the business will be valued much higher than other similar businesses that simply rely on the traditional rent advertising approach.

Best practice bring the two together to drive down ongoing marketing costs

Whilst traditional advertising – online or offline can drive people to your store, the best businesses are then collecting customer data to allow them to connect and drive their equity marketing going forwards.

Take Dominos pizza for example. They drive people to their business through traditional means – for example leaflets, newspaper ads or online marketing. They then collect customer information to allow them to market and connect directly back with the customer through loyalty marketing. This helps to retain customers and in turn lower their ongoing marketing costs.

2.     Loyalty marketing delivers increases in sales conversions

After a customer buys something from you are they then lost to you until they happen to come by once again? Do you proactively look to lock in next month’s sales or do you hope (or worry) that next month people will simply just drop by. Or through loyalty marketing are you looking to promote directly to those customers wherever they might be and reward them with points for their valuable custom? It’s important to remind your much appreciated customers that you’re here, and give them a reason to come back in. For example, do they know that you’ve just got in some super tasty salt marsh lamb and should hurry back whilst stock lasts? Delicious!

Big brands understand the benefits – so should you

Almost all big brands across all types of business are employing some form of loyalty program to drive their business forwards. Why is this? – Because customers love them and they work. Research shows that it is 6-8 times more expensive to acquire a new customer than it is to retain and existing one (Forbes). This is what big brands understand and that’s why they’ve chosen loyalty marketing. They understand the importance of each and every customer and by use of a loyalty program how they can keep them coming back with the use of points, rewards and promotions. As for your business, well it makes sense to tie your customers in to a loyalty program with you before a big brand ties them into themselves.

3.     Today’s loyalty marketing takes advantage of technology in how you connect to customers

If you thought simply opening a shop and placing a sign outside is you done on the marketing front, think again. Today’s consumer is becoming more and more tech savvy. Smart phone penetration in the UK is soon to reach 80% of the population. People find businesses through search, and online social recommendations and this could potentially be stealing business away from you.

Loyalty marketing in the smart phone age

Loyalty marketing has taken massive steps forward from the day of paper stamp cards or indeed plastic cards that fill up your wallet and get discarded or forgotten. Today loyalty marketing can sit squarely in the one device most people never are apart from – their mobile phones.

A good mobile phone based loyalty program helps you keep in contact with your customers wherever they may be. Helping you to connect to them even when they aren’t in your shop – remind them that you’re here and why they should shop with you. It also delivers the opportunity to connect into your customer social accounts allowing them to be online brand ambassadors to help drive your customer base up further.

 

Conclusion

If you have a repeat customer type of business and don’t sell through loyalty marketing you face missing out on the benefits it brings in terms of increased sales and equity. By building a customer database for future marketing you will over the long run reduce your marketing costs. As detailed above, “Nothing happens in business until something gets sold.” And the way it gets sold is connecting to customers through cost effective advertising. Today’s loyalty marketing takes full advantage of technology and especially the ever increasing penetration of smart phones to help retain and grow your loyal customer base as well as promoting your business to a wider audience through social networks. Through intelligent marketing you reward the right customers, your loyal customers helping the business to go from strength to strength.

 

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