BUILDING LOYALTY by: YAYU JAVIER yayu. javier @ avanza. ph
Yayu Javier is the President and COO of Avanza, Inc., who has acquired more than 20 years experience in loyalty and customer relationship marketing and has extensive exposure in various industries such as retail, consumer goods, banking, and institutional products
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Many times a client would invite us to pitch for their loyalty program and first thing they say is“ I want a very basic, simple program”. What they’ re really trying to say is“ I want the cheapest loyalty solution in town.” That is why I always ask the client,“ What do you really want to achieve with your loyalty program?”
1. Does it help you improve customer service? Do you just want to join the bandwagon or are you seriously looking for ways to serve your customer better?
At the end of the day, your loyalty program is your means to serve your customer better. As we say in Avanza,“ Know them, so you can keep them.” Having the lowest cost solution doesn’ t necessarily mean you can’ t achieve your objective and you can also spend on a very expensive solution and still not achieve your objective.
Did your customer’ s spend, recency and frequency improve after you’ ve launched your program? Can you even measure it?
The key success factor is how well you can use those systems or tools and knowing what other tools you will need to help you run your loyalty program better.
Basic Loyalty Applications allow you to have a database and spend per store. These will let you know who your best customers per store are and when and where they buy. Depending on how much data you were able to capture, you can mine more. Others just ask for name and mobile number. Is that enough?
You need to determine if the solution you are buying or have is helping you achieve your objectives. Does it provide the communication tools( sms, email, mobile, online, website, POS interface) that fit well with your target customers? Do you have enough data to study the behavior of your customers? Do you need to bring in other tools to complement your basic loyalty solution?
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2. Can your program give you cross-selling and upselling opportunities? Do you have the data on which products or even SKUs they buy? Why is this important?
This will allow you to see if you can sell other items in your store that complement what they are buying. It’ s just like what Amazon is able to do. There are solutions that are able to provide this information to help businesses increase customer spend at the store. You can offer bundling or special offers if there are other products that go with what they have bought. For instance, if I have bought a face cream, maybe I would be interested in a neck cream or eye cream to complement my entire skin care regimen.
We have run highly successful Electronic Direct Mails, based on information we have gathered from data of our Loyalty Programs. Some receive an ROI of 1,000 % just because we knew exactly what to offer and who to offer to. One should think about not how much a solution would cost but rather how much the solution can generate more business for you.
3. Can you measure and reduce attrition?
Do you know which of customers have reduced in spend, recency and frequency or have stopped going to your store all together? Do you know why?
It is important to track patterns of your customers so you can determine whether it is improving or getting worse so that you can act on winning back your customers. Analytical tools can help you determine the regular patterns of your top customers, customers you have lost and customer who are irregular in patterns. These will help you determine the profile of those customers and what they are buying so you can target your ideal type of customers. You can also put more products and those that complement those products that are bought by your regular customers or determine the interests of your regular customers. For those who are irregular, it is important to know what they are looking for that are not in your store. Sometimes just doing surveys can do the trick.
Remember, your loyalty program is an important investment and can make your business if you do it well or break your business, if designed and implemented badly.
If you are following my articles, you can email me at yayu. javier @ avanza. ph for any questions you may have.