Are you looking for repeat customer or loyal customer? There are basically some differences between the two. Repeated customers are not necessarily loyal. On the other hand, loyal customers certainly come to your store repeatedly. Unfortunately, many businesses make mistakes with loyalty program. They treat repeat customers wrongly as a loyal customers. Just because they come back is not a guarantee that they are loyal.
Mistakes with Loyalty Program: Understanding the Meaning
Differentiating between loyal and repeat customers is important to avoid a mistake in planning the future strategies. Some customers are loyal to price, while others to quality. As long as you offer the lowest price, those customers will come to you, repeatedly. However, when they find the same product at a lower price from another company, they will walk away.
The same case applies to loyalty with the location. Take an example that a group of customers is loyal to a place since it is easy to access. If they can find the same product from a competitor that is closer in location than your business is, they will walk away. Those two examples are not what true customer loyalty means. By understanding the essential meaning of customer loyalty, you can avoid mistakes with loyalty program.
Customer loyalty involves an emotional connection between a company and the customer. Such connections may occur due to the way the business treats the customer. Customers who feel comfortable doing business with a company are potentially loyal. Take an example that your company moves to another place. Loyal customers will keep coming to your store.
How to Avoid Mistakes with loyalty program
The objective of customer loyalty program is certainly to create loyalty, instead of simply repeat customers. In fact, some businesses simply motivate the customers to come by offering incentive. The customers may come repeatedly, but the marketing programs do not actually build an emotional connection. The following are some reasons behind the mistakes with loyalty programs as cited by Shep Hyken on Forbes:
Lack of Rewards
Hyken cited a statement from Ed Eger from Rewards Network Establishment Services, lack of rewards might lead to failure of a loyalty programs. The rewards must be beyond your products and services. For instance, Amazon offers a new program called Moments. This program allows businesses to select products from their customers.
The customers certainly love low prices. It is true that low price may be one of the reasons for loyalty. However, over discounting can be harmful for the business. What happens when the discount program is over? You cannot offer the lowest price anymore. As a result, the customers will walk away.
Make sure to design an easy customer loyalty program easy. A good program is one that is easy to navigate. Instances include a credit card-linked program, which allows the customers to get rewards or bonuses after using the registered card. This way, they do not need to carry extra card. On the other hand, lack of convenience can make the customer go away.
Those are the most common mistakes with loyalty program. Make sure to consider them when designing your programs. Again, your main objective is creating loyalty.