Friday, 10 September 2010

Loyalty schemes

     Many large organisations such as Supermarkets, Airlines, retailers etc have loyalty schemes such as club-cards, vouchers etc aimed at promoting repeat purchases from customers and so gaining long term brand loyalty. These schemes are a brilliant way of showing customers that they are appreciated, creating a fear of loss and switching costs if they want to use a competitor and creating a level of comfort for them. However, it’s not just large organisations that can utilise this strategy to their benefit.
     Whatever the size of your organisation, as long as you have customers, you can treat them to a loyalty scheme. If you are a small coffee shop, why not have booklets which you stamp every time a customer has a coffee and after so many visits they get a free beverage? If you are a local taxi company, why not add discounts for customers regularly booking? If you supply to local businesses, why not add incentives for them to repeat purchase from you, such as added products? It may create an initial cost which seems unattractive on the balance sheet, but the intangible strength added to the relationship with your customers in the long term will create a very profitable return on investment.

     What is often not considered by companies is that customers want a relationship with their brand, even as far as they will actively seek such relationships. Having a company they consistently use creates a sense of security and comfort. They know what they are expecting, they have an emotional attachment and they do not have to worry about the risk of an inferior product or paying for a service they are not content with. If you can give them a reason to return, they will usually take it, and the longer the relationship is strewn with incentives the stronger it will become, creating an invaluable level of true brand loyalty.

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