Social Media

There are three types, or levels, of loyalty programs you can implement:
1) Basic
2) Intermediate
3) Advanced
Let’s look at each of them individually.

Basic

Just about as simple as it gets for both the business and the customers. A basic program is great for places that want to promote one or two main products or services. All you need is some type of record for purchases, like a small card. The point here is to drive repeat business, make the customers get used to buying from you. You just need to train the people who interact with these customers to offer upsells and additional products.
These types of programs work great for shops that sell products like coffee, donuts, burgers, and hot dogs. If you have a business that provides a simple service, like rug cleaning, lawn mowing, or pet grooming – anything where a client might use your service on a fairly regular basis – you could also set up a basic loyalty program.

The program is a simple equation: pay for X number of products/services, get the next one free. The salesperson just has to ask if the customer has a membership card. If not, they provide them with one, and mark the card to show a purchase. When the customer’s card is completely marked, the salesperson takes the card and gives the customer the donut/cleaning/whatever for free, along with a new, unmarked card.
Instead of a physical card, you could also invest in producing an app people can download onto their smartphone. This obviously is more of an upfront expense for most businesses, but depending on how fast you go through cards, it might be more cost effective over time.

Pros: Low cost, ease of setup, and immediacy are the three main pros for starting a Basic loyalty program. If you put it together yourself, you could start a basic program for about $20 (500 cards and a small ink stamp). Spend more money for overnight printing, and you could start your basic program tomorrow.

Cons: You’ll be relying almost entirely on your point-of-contact salespeople for everything – promoting the program and driving additional sales. You also get absolutely no information about the individuals in your program, so you cannot make customized offers. You have no contact info for your customers, so there’s no way to get in touch with them and either ask them questions (”What else can we offer you?”) or give them information (”We’ll be carrying red widgets starting next week.”).

Intermediate

These take a little effort and cost to set up, but aren’t that difficult. Most loyalty programs I’ve seen fall into this category. The main tools used here (see the chapter Tools) are –

1) A list with personal information (first name and email address, at minimum) from each customer

2) A contact mechanism, like an email autoresponder, or text message sending system (SMS)

3) A series of automated messages

4) Offers – discounts, buy X get more free, etc.

These programs take a little more planning, a little more time, and a little more money. Your costs in time and money will depend on how complex you want to make your program, and what you want to get out of it. You can have people self-register for the program, and then have the program make offers to members and dole out rewards (like discount coupons, etc.) automatically. Or you can make the system behind the program more complex, and segment your members into groups and sub-groups, providing each segment with different offers and rewards. If you reward people for their loyalty, they are more likely to reward you with detailed information, like important dates (birth date, anniversary, and so forth), physical addresses, and shopping preferences.

Intermediate loyalty programs can help you expand the purchasing decisions of the members, allowing you to suggest related products and services. If they know, like and trust you, they are much more likely to buy additional products and services from you than to go looking elsewhere.

Pros: Most intermediate programs can be highly automated. With just a few minutes each week, a single person can examine the statistics generated by the program, and make minor tweaks to improve the process. Most of the cost in labor and money comes upfront, and allows you to almost “set it and forget it.” The person managing the system only has to spend major time when the system parts change, or when adding new complexities like additional products, services, or list segments. Because of the moderate amount of personal information you can acquire, you’re able to offer higher-profit products and services at the right times to the right list members.

Cons: Someone has to understand the program, and be in charge of managing it behind the scenes. They’re in charge of training point-of-contact people on what to expect from program members, like coupons and so forth. They also need to regularly read the data the system generates, interpret it, and make decisions based on that information. Learning all this can take considerable time and effort at the beginning. While intermediate programs do not have to be super-expensive, a decent system is far from free.

Advanced

By their nature, advanced loyalty programs are much more complex, much more expensive, and require a recurring investment of time by a team of people. However, most advanced systems track a tremendous amount of information, and the data provided by these programs can help you almost micro-promote to each member. A lot of membership programs run by major corporations are advanced systems. Wegman’s – a major grocery chain on the East Coast of the US – knows what its members shop for down to the individual SKUs, and their automated system can offer coupons for items the customer has shopped for in the past. I regularly get the same type of coupons from BJ’s Wholesale Club. Advanced systems can offer promotions via printed coupons sent through the mail, via SMS messages sent to a member’s phone, or even through custom apps that members use to shop. A truly advanced system will know how often you make purchases, the quality of products and services you prefer, the brands, the individual items. It will be able to offer you incentives based on important dates like holidays and birthdays. They can tell how much time you spend shopping, and prompt you to come in when they haven’t seen you in a while. The more information your membership program tracks, the more you can do with that information – including aggregating it and selling it to third parties. But that’s a whole other discussion!

Pros: Tons of information, depending on how much info you collect and how complex you make the collection system. The more information you collect, the more granular you can make your promotions. Offer a discount not just on widgets, but on yellow left-handed widgets; or to people in a certain zip code who get their lawns cut only on Thursdays. Track your costs, schedule needed supplies down to the hour, plan for increased profits.

Cons: Expensive investment. Set-up costs in time and human resources are much higher than either of the other categories. Tracking the system, as well as interpreting and using generated data usually takes a team of people, and is an ongoing investment. The more data points you track, the more the program parts need to be tweaked.

Many businesses, large and small, have a page on Facebook for their business. If they’re lucky, they actually control it! Some have been set up by fans, or by cyber-squatters, hoping to milk the business for some cash. But that’s all beside the point.

Facebook pages are one of prime platforms that come to mind when we think about “social media.” I know of a number of small and medium sized companies that have turned off the ability of the general public to comment on their page. There’s a fairly well-known restaurant that leaves their page open, but the admins delete every single post made by the public, positive or negative. They even delete questions without answering them. Not only is that a waste of the page, it’s a waste of manpower to patrol the page like that.

My point being, it’s called social media for a reason. These platforms are a wonderful way to reach out to fans and develop relationships with them. FB pages are also a great way for a business to be found by prospects. Your aim should be to interact with people on your FB page.

So before you slap a post up on your business’ FB page, you should have a reason for doing it. By that, I mean: you should have an intent you want to accomplish with the post. I’ve seen many, many pages where the only posts are variations of, “Buy our stuff.” Now, there’s nothing intrinsically wrong with beating people over the head to buy stuff, but you should at least have a process in place to be able to track the sales that come from different places. Knowing a sale came from your FB page is okay. Being able to track a sale back to a particular post is a goal to strive for! As a general rule, I call posts that try to sell Sales Posts, or simply “Sells.”

Most posts on a business’ page are, theoretically, informative. I say “theoretically” because there is often very little information that readers can use or make actionable. In general, I call these posts “Tells.” A message like, “We’re closed on Christmas Eve,” or “We now carry blue widgets” are imparting information, but they don’t actually have any information which the reader can act on. Telling someone about a product or service isn’t a sales message – there’s no call to action. Telling someone you’re closed is giving the message, “Stay away.” A message saying, “We re-open at 7 AM on December 26th” is telling the reader “Come on in.” It’s a much better message for you to give, and for them to get!

There’s a much better post I like to use. It opens up a path to building relationships. As long as you’re willing to listen, it also tells you what people want – or don’t want – from your business. I call these “Asks.” Before you commit to stocking blue widgets, you might create a post that asks, “If we were able to offer blue widgets, would you be interested in buying them from us?” My favorite Ask is along the lines of, “Red or blue widgets – which is better and why? Please leave your answer below.”

Of course, many people are hesitant to post an Ask, because they fear that a flame war (an online argument) will erupt on their page. The best way to keep flames at bay is to stay away from hot-button topics, and not to phrase questions with an obvious bias. “Superior blue widgets or crappy red ones – which one are you man enough to prefer?” Yeah – stay away from saying things like that.

Before you begin crafting even the simplest of FB page posts, ask yourself “What do I intend to have this post accomplish?” If you want to have readers develop a new or deeper relationship with your business, consider posting a Tell or an Ask, and letting people respond. Even if you want to sell something, and you write a Sell message, make sure you give people the ability to respond.

All the other companies are running Black Friday (or some other holiday) promotions – you should probably run one, too. But what are your objectives? I mean, what do you want to achieve with your sale? Here are some points to keep in mind.

Attracting new clients

A lowball price is almost always guaranteed to catch the attention of people. Ideally, you want to attract people who are either members of your target audience, or reel in current prospects. You can also do this by “bundling” – keeping your regular price, but adding in extras for people who purchase during the promotion period.

But most of the companies I see running promotions, well. . . they don’t do anything with the people who buy the offer! You need to quickly convert these folks into regulars – get them to fall in with your ways of doing things, become fans. In order to do that, you need a program for them to follow. You need to immediately start building a relationship with these new buyers, give them freebies or low-cost purchases that bring them further into your fold.

Don’t screw over existing customers

I spend a lot of effort getting my clients to develop their own customers into regulars. That is, people who return again and again for the same products/services, or who look to their company for extra products and services. New customers fill in the natural attrition of your customer list, and help it grow. But it costs a lot of money to bring in one new customer; you make most of your profit from regulars.

But many – if not most – businesses ignore existing customers. They spend all their time and effort hunting down new customers, but treat current customers like crap. They offer major discounts to new customers, but expect existing customers to “like it or lump it,” as it were. It’s a few days before Thanksgiving as I write this, and I’m watching several companies deal with severe public customer backlash. They’ve offered discounts to new customers, but expect existing customers to be happy paying a higher price.

Not cool! If I’m your customer, and I don’t get the lowball price you’re offering some schmuck off the street, you’d better give me a ton of other products and/or services for me to re-up my subscription that the newbies just don’t get.

Loyalty Programs

For people who’ve recently become aware of you, your business, your products and your services, they have no idea what to expect from you. They probably expect that, once they buy from you, you’ll ignore them at best. Somewhere in the middle ground, there are companies that simply pound people over the head for sales. At the crap end of the stick, there are companies with hostile customer service policies and employees. A handful have some kind of loyalty program, and a very few have effective loyalty programs that actually offer benefit to customers and businesses.

In brief, you need to ask customers what they want. Many won’t answer you, and some have no idea. Listen to everyone else. Then, you need to provide them with value. Most customers who want consistently low pricing aren’t looking for high quality, and people who are looking for superior products and services know they’ll have to pay a reasonable price.

A loyalty program (or member’s group, fan club – whatever you want to call yours) should allow you to collect contact info, and then use the list you’ve made to collect info, build relationships, and offer to sell products and services. Few people will stick with a loyalty program if they feel like they aren’t being listened to.

Most importantly, reserve your best deals – your lowest pricing, your best bundles of products and services – for members of your loyalty program! You spent a lot of money to get each one of those people. Is a few bucks in your pocket today worth ticking these folks off, and having them take away all your future profits? And frankly, that’s exactly why you want to develop a base of regulars – so that you can depend on their future purchases to drive your revenues and profits.

Let’s make it simple –

1. Use Black Friday and other promotions to bring in new customers
2. Immediately move those new customers into a loyalty program
3. Nurture those new customers, and develop them into regulars
4. Treat your regulars like gold, because that’s exactly what they are