Most people starting a business for the first time are primarily concerned with one thing: building a customer base. While that is vital to success, it isn’t the only thing to keep in mind, especially when thinking about the longevity of any business. In order for a customer-facing business to survive the long haul, it’s essential to not only build a strong customer base but ensure that customer base becomes a pool of loyal customers. Most businesses will do this by setting up some sort of loyalty program, enrolling their repeat customers and creating the basis for a lifetime of loyal traffic to the business. Here’s how that can get really messy, really fast:
Businesses often think that when a customer joins their loyalty program, they’ve got them hooked, but that is so wrong. In fact, when done wrong, the loyalty program can be the very thing that’s driving away once-loyal customers! I had a conversation with a loyalty expert, Vic Mahadevan, CEO of Punchh, a customer relationship management platform that builds branded loyalty apps for small businesses and he pointed out that many loyalty programs aren’t producing results and many businesses don’t even know what they’re doing wrong.
Here are five pain points he’s come across along with some suggestions on how to correct them:
Problem: You don’t immediately amend mistakes you’ve made
o When customers take the time to complain about an experience, it’s an immediate red flag for your business. It’s an opportunity to shine through superior customer service – and the quicker the better.
o SOLUTION: First, admit to the mistake and apologize for their experience, assuring them it is not the norm. Next, you’re on the verge of losing their business in the future, so you need to be proactive and extend goodwill – even a small discount, freebie or comp is enough to sway things back your way.
Problem: You make it all about you
o When guests feel like a loyalty program is all about the business and not them, they tune out your message and eventually disengage.
o SOLUTION: Engage customers organically without being pushy. Position your brand as a resource and make sure to give them all the tools to connect with your business – react to feedback and make customers feel heard and appreciated.
Problem: You only focus on the one-time offer
o Brands often think that spending a lot of money outright to give free items and rare hefty discounts is the way to customers’ hearts.
o SOLUTION: The key to sustained customer loyalty is continued rewards and engagement. Take advantage of opportunities like national holidays and birthdays, reward them for bringing in a friend, ask them about their experience. It’s about maintaining a relationship, not the one-time quickie.
Problem: The program is stale and predictable
o Back when loyalty programs first started, having the traditional 10 stamps equals 1 freebie was enough to keep any customer happy. Nowadays, everyone offers the same boring rewards program and it becomes stale and unattractive.
o SOLUTION: Select customers at random and give them a freebie. This not only creates the foundation of a loyal, happy customer but also impacts the way that customer refers to your brand, and we all know how powerful word-of-mouth is.
Problem: You’re only relying on the loyalty program and forgetting about relationships
o Many businesses tend to rely on rewarding their customers only – forgetting that the foundation of any vendor-customer relationship is preferential treatment.
o SOLUTION: Don’t forget to talk to your customers, remember their preferences and develop a relationship with them. Everybody likes to feel like they are VIP!
Regardless what stage a business is in, whether it’s a startup or an established business that’s decades old, having a strong foundation of loyal customers is key to surviving in the marketplace. Turning your back on them is a guaranteed way to sink your ship!
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This guest post is courtesy of Stephanie McGuinn, Founder and CEO of Heartbuzz Agency.