The average U.S. household now belongs to more than 18 loyalty programs, for a total of more than 2 billion memberships. That’s an awful lot of loyal customers. But, all these programs and cards can have an unintended effect: customer loyalty fatigue.
Most consumers do still participate in their ‘favorite’ loyalty programs, and for many businesses, it’s a proven marketing tool that adds revenue to the bottom line.
So what is it that turns customers off? Some of the most common reasons are “I always forget to bring my card,” “the coupon I got in the mail has expired,” “restrictions on merchandise,” “not getting good discounts,” etc. For the most part, it seems that customers just aren’t perceiving much value in their customer loyalty programs.
To combat this customer loyalty fatigue, make it a priority to create a loyalty program that stands out from the rest, and is perceived as valuable by your customers. Here are a few tips on how to accomplish this:
First, you may want to consider adopting a mobile app where customers can store their cards on their phones. People may not have their loyalty cards with them all of the time, but they will always have their phones. Apple’s Passbook, for instance, allows consumers to add all types of cards to it, including loyalty cards. This makes it easy for consumers to always have – and access – their loyalty membership when they visit your dealership. In addition, ensure that there is a way to access and/or credit a customer’s loyalty account when a transaction is completed –even if they do not have their cards with them. It’s also a good idea to have a system that can look up the customer via their name, phone number or perhaps even their vehicle’s VIN or license plate.
Second, a loyalty program is only as desirable as the potential it offers its members. Make sure that the rewards you are offering are desirable, worthwhile and attainable, or you may find customers become apathetic about your program. Rewards can include much more than simple freebies or discounts. Consider offering experiences, front of the line passes or other VIP perks for those customers who show their loyalty through bringing you their business. An excellent way to figure out what your customers are interested in is simple – ask them. You may get some unrealistic answers, but I promise that you’ll get some great ideas that you can then implement. The best part is, by doing this, your customers are engaged and feel included in both the program and the process. For a customer to see a new reward appear that was something they suggested is priceless and further strengthens their loyalty.
Third, consider offering coupons with no expiration dates. While the coupons you send may be relevant and desirable offers, there’s nothing more frustrating for a consumer than when they are ready to use a coupon and find it just expired. Whatever you’ve chosen to offer a customer, make it “no strings attached.” You don’t have to send the offer to every member. You can segment the membership list into types of members and then market to them as sub-groups. Consider going through your loyalty program and sending a coupon to all members who haven’t earned any points in the last 6 months. This is a great way to re-engage the customer and potentially recapture their business.
Loyalty programs can be an excellent customer retention tool and help increase revenue while rewarding your customers for taking actions that benefit your dealership. Examine what you’re doing now and how it can be improved for a better customer experience. As a result your customers will be more engaged as they will perceive more value in your program.