Jan. 27, 2014
From restaurants to retail, loyalty programs to motivate customers to return to a business are commonplace.
Jim Daleen, CEO of loyalty mobile app provider AppSuite, says there is a reason for that: focusing on current customers is a more efficient way to drive revenue. The Center for Retail Management at Northwestern University revealed that about 12 to 15 percent of a company's most loyal customers contribute 55 to 70 percent of total sales.
"Restaurants spend much of their marketing budget on finding new customers. Engaging the current customer is essential to maximizing revenue opportunities in this hyper-competitive marketplace," Daleen said.
He provides three tips on how to get your customers to become loyalty members:
1. Call to action: Give your customers a special offer to compel them to sign up on the spot during a service. This offer should be something they can use immediately on their current visit such as a free appetizer or free dessert, or a $5 discount on their next purchase. A typical loyal customer will spend about $10,000 over 5 years, the average life of a loyal customer. A $5 to $10 offer is an investment you won’t regret to get a customer on a path to being one of your $10,000 fans, Daleen said.
2. Technology = simplicity: Joining a mobile-based loyalty and rewards program is simple - no punch cards, no swipe cards; your rewards are available 24/7/365 in your pocket. Customers simply spend money and earn valuable rewards.
3. Get personal: It’s not just about points or giveaways. As a member of a sophisticated loyalty program, customers can be afforded personalized and special benefits based on things such as lifetime spending amounts, birthdays, anniversaries, and milestones in rewards levels. Providing a loyal customer special privileges and benefits isn’t costly but is very important to them. All customers want to be appreciated, recognized and rewarded for their loyalty. If a customer understands what being a member of a great loyalty program means to them, they’re very likely to want to join. Daleen said you need only look at the tremendous success of airline loyalty programs with special seating, check-in, and upgrade benefits to understand why this is important to restaurant patrons as well.
Daleen is the CEO of AppSuite LLC.
Read more about loyalty programs.
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