“Starting a Loyalty Program” The Beal Business Advisor

May 9, 2011 | Corporate Member News

It typically costs more money to gain a new customer than it does to keep a current customer. Implementing a customer loyalty program can provide incentive for customers to return again and again. Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal buying behavior.

Before you begin your loyalty program, you want to ensure the initiative is right for your business as once it is established, it will be difficult to eliminate.

Some points to think about before implementing a loyalty program include:

  • Determine how much your customers will have to purchase to receive a reward. You will need to find the balance between the amounts that provides enough repeat business vs the amount that is motivating for the customer. i.e. set the amount too high and the customer might not bother
  • Determine how you will track the purchases and the customer’s progress towards their goal. Some companies use cards that you fill with a special stamp; others have a computerized system that lets you scan in a card.
  • Decide what your reward will be. Some companies offer a percentage off the next purchase or a fixed dollar amount off. Be sure that the cost of the reward is not too high or you may lose money. One famous example of a promotion that cost more than the reward was when Hoover offered free flights with the purchase of a vacuum. The company found itself overwhelmed with demand. Read More 
  • Advertise your program. Now that you have a formal loyalty program established, you’ll need to let your customers know about it.
  • Take the time to track and analyze to determine results. It is important to analyze the results of the program to see what kind of insightful information it may provide.

Lastly, remember, loyalty programs cannot create loyalty. True loyalty is established by the positive experiences your customer has with your company’s products or services. So continue to work hard at customer service and enhancing your customer’s experience and the loyalty program will assist in enhancing the loyalty that is derived from that.

This article originally appeared in the May 2011 edition of The Beal Business Advisor. The newsletter also includes:

  • Buying a Business: What We Can Learn From “Dragons”
  • Selling Your Business
  • Quote of the Month
  • Businesses Available for Sale  

Check it out here.    

About Beal Consultants, Business Growth Professionals

Focused Business Advisors
Beal Consultants helps people buy, sell, value, improve, and start businesses. We deliver value-added services in the following areas:

Grow Your Business
We can help make your business grow profitably using proven success strategies, step-by-step guidelines and an abundance of insight from our experience in working across a wide variety of industries.

Insightful Diagnostic Report

Are you ‘too close’ to your business? Are you working too hard in your business you have no time to work on it? Do you need a second perspective, a fresh pair of eyes?

Using a proven methodology, we can come in, interview you and your key staff, review your financial results against industry benchmarks, and make concrete recommendations on how to improve your business.

Improving your business means more profit for you, more free time and, eventually, more value when you exit. Call today for a free, no risk initial consultation.

Strategic Planning

Strategy planning is NOT about creating 50-page documents that are never referred to again. Strategic (and business) planning is all about understanding how your business can grow and thrive in a challenging, competitive business environment.

You are competing against many competitors, not just your direct competitors, but all your indirect competitors as well. You are vying for attention in an increasingly complex and crowded marketplace. You need to clearly understand – and you need to communicate to your clients – your key value proposition – why should they do business with you? Understanding your value proposition is key to differentiating yourself in today’s marketplace, and is key to having a sustainable competitive advantage. Your business strategy and business success relies on having a crystal clear understanding of your unique competitive advantage.

Find out more here.

About Beal Consultants – Business Brokers

Focused Business Advisors

Beal Consultants – Business Brokers helps people buy and sell businesses. We deliver value-added services in the following areas:

Buy a Business
We provide counsel, guidance and support throughout all steps of buying a business including: Search, Screening, Valuation, Negotiation, Due Diligence, Financing and Agreement Structuring.

Sell Your Business
We provide counsel, guidance and support throughout the process of selling a business. Some of the advantages of hiring an intermediary to sell your business include: confidentiality, creating and executing the marketing package, negotiation, and buyer screening.

Succession Planning/Exit Strategy
Looking to retire? Great! Is your business ready for you to retire? Can you afford to retire? Do you know how to minimize your tax burden when you are looking to sell or pass your business on to your children? We can help you understand the options that are available to you. Think it’s too early? The earlier you start, the more your business can be worth, and the more options you have to minimize taxes. If you’re thinking of getting out within five or less years, start planning today!

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Need to know what your business is worth? We help you determine the value of it and understand the key drivers of that value, so you can know how to improve it.

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