How to Make a Loyalty Program Work

Over 80% of the population belongs to some form of loyalty program. The average US household actively participates in 6.2% loyalty programs, (source: Colloquy, 2009). Whether it is your card that is swiped at the grocery store to get weekly discounts, the airline miles you accumulate when you travel, the points you receive each time you rack up your credit card, chances are you belong to a variety of loyalty programs.

But does being a part of a loyalty program make you more loyal to that business? Some say “yes”, but most say “no”.

Loyalty programs can be part of your comprehensive client or patient relationship strategy. But having a loyalty program won’t make your clients loyal. Client and patient loyalty comes from the value your product or services provides and the emotional connection your customer has with your business. A loyalty program can assist in creating value and the emotional connection.

Often times, businesses do not put enough thought or strategy into their loyalty programs and they end up looking like everyone else’s, rendering little or no meaning to the client or patient. You want your loyalty program to be more than just a “rewards” program. It should add value to your product and service.

The underlying objective of a loyalty program, (and how they were originally used), is to accumulate information on buying behavior. But beyond this valuable information, other objectives of your program should be to:

Increase buying frequency
Increase transaction size
Acquire new profitable clients
Retain the most profitable clients

The focus with any loyalty program needs to be profitability. The key to loyalty marketing is relevance to the consumer. The size of the reward is not as important as its perceived value. Consider these elements as part of your loyalty program:

Surprise Rewards
Special Treatment
Special Recognition

Your program needs to have teeth rather than it just being bigger, better, or easier. That is the norm and what your client or patient expects today. Most loyalty programs are now commodities. There is no differentiation between them for them to be meaningful to the consumer.

Think in terms of client/patient “experience” rather than “tangibles” when crafting your loyalty program. This will keep your program from looking like everyone else’s.

Here is a step-by-step outline of basic fundamentals in creating a meaningful, value-driven loyalty program.

Outline your positioning. What do you stand for? What do you offer? How do you want to be perceived?

Determine the target market. Who is our highest margin client/patient? What other targets should we consider?

Determine the program benefits. Make sure these align with the overall client/patient experience you want to create. Benefits can be cash/products or special privileges or a combination.

Program details. How will clients/patients enroll? How will they earn rewards? How will they redeem rewards?

Outline your communication strategy. How will you get the word out there? How will you keep current and potential clients informed of your program?

Evaluation and Measurement. How will success be measured and over what time frame? How will the data be captured? How will the data be analyzed?

Top 5 Client/Patient Profiles to Avoid at All Costs

Sometimes no amount of “client/patient relationship management” will do the trick. You’ve bent over backwards, killed them with kindness, brought them the proverbial “apple” and nothing seems to work. Maybe they just aren’t worth all that coddling. One of my mentors, Dan Kennedy has a saying he uses frequently and it goes something like this–”If I wake up thinking about you three days in a row and I’m not sleeping with you, you have to go!” He uses this reference mainly when he is talking about employees but this could be applied to any relationship. If your clients or patients are consuming your thoughts, due to the inability to satisfy them, they are most likely also affecting your health, that of your employees, and the bottom line in your business.

Here are the Top 5 Client/Patient Profiles You Should Avoid at All Costs and if you currently have them, they need a good firing:

The Nasty One
This client is verbally and/or physically abusive. OK, so maybe they had a bad day, you came in their sights, and they let you have it. You can forgive them once for this, with the most sincerest apology from them. But, if this behavior becomes the norm rather than the exception, they need to go. No one should have to tolerate this type of treatment. It causes undo stress to everyone whose path they cross and has a way of permeating and affecting unrelated people and projects.

The Nitpicker
There is nothing that seems to satisfy the Nitpicker. They are chronic complainers. They make constant changes to what they originally agreed to. They’re overly demanding and expect you to drop everything to take care of their needs. They will pick apart your invoices bit by bit, even though they knew in advance the costs involved. Another high stress level client. Bu-Bye.

The Time Sucker
This is the one that likes to rob you or your employees of precious time with idle gossip, validation of their latest brainstorm, or professional advice without any consideration. They schedule meetings, then cancel them. They call repeatedly throughout the day with each new idea or request. Time is money. We all have the same amount each day. Time wasted is money lost. These clients and patients need to be cut off.

The Slow Payer
The client that consistently pays their bills slow is a drain on your time and affects the cash flow in your business. Unfortunately, if you typically invoice after the transaction, the only way to find out about The Slow Payer is to actually do business with them. But once you do, they gotta go, or they gotta pay in advance.

The Bargain Shopper
The Bargain Shopper is a little like the Time Sucker since they waste an incredible about of time. They will have you quote on something, pit you against a competitor, and continue to try and beat you down on price. Or they simply use you in the bidding process with no intention of giving you the business. If you do end up getting this business, the margins will be so low that the time you invested will not be compensated. Time would be better spent prospecting for your ideal client. No business needs bottom feeders, but there are plenty of businesses out there that will take them. Very few businesses can be sustained on the lowest price model. I say let ‘em go.

Of course, there are other less severe types of clients or patients that may not be a good fit for your business. No business can be everything to everyone, nor should it be. By avoiding and/or firing at least these Top 5, you will be in a much stronger position and give your business the room to grow with the right client or patient.

The Key to Building Customer Relationships-Your Employees

Let’s face it. We’ve all been victims of bad customer service. For me, there are businesses I no longer patronize because of the poor service I received. How about you? Are there places you no longer patronize? Usually though the reason to stop going isn’t because of a one-time nightmarish customer service incident but because of several occurrences that culminate in finally saying, “Uncle, I give. I just can’t spend any more of my money here.”

In most cases the problem isn’t simply that the individual employee doesn’t understand the right way to handle clients, often times it is more than that. So how do you make sure you don’t end up having employees of your own losing business for you?

The first step is selecting the right people for the right position. Anyone you have in a customer service role (and there are not many positions that in some way or another don’t interact with the customer) needs to have extremely competent interpersonal skills besides the functional and technical skills to get the job done. Consider this when hiring. You can always teach the “how to” part of the job but it is very difficult to teach the “attitude.” Sometimes it’s difficult to know if a candidate has the right attitude.

To help make this determination:

• Be sure to outline the most important job requirements not necessarily the technical aspects but those that are critical to the position as it relates to the customer.
• Craft questions for the interview based on situations the candidate may or will find themselves in.
• Enlist several people to help with the interview process to get an objective view.
• Have all serious candidates (after you weed out those that don’t qualify) take some sort of personality assessment. You can find some online for free. There are also other more in depth tests such as Kolbe for a fee.
• After you have found the ideal employees, it’s time for the second step, developing and motivating your employees. This step is actually harder than the first step. I believe this is where many businesses fail because it does take work to do and to maintain. With step two, it all comes down to communication and the various ways we should be communicating in our business.

In order to create a customer relationship centric environment, it is paramount to:

• Provide step-by-step procedures on everything you do on a regular basis in your business
• Hold regular meetings to offer training and coaching in customer service and procedures
• Develop a system to measure performance
• Be sure to follow up exemplary performance with rewards based on what each individual’s preference for reward is (some like cash, some like time off, some like awards)

By following this two-step process for creating the right customer relationship environment, you will not only improve the retention rate of your customers but you will also get more business from them. It will also give you a highly competitive advantage in the marketplace.

Three Marketing Takeaways from a New York City Visit

There is so much to take in when you visit Manhattan. Lots of interesting people, and lots of stuff going on. Everyone appears to be on a mission to somewhere. Whatever you do don’t stop in your tracks or you will be run over.

Besides all the immense activity, if you take the time to observe, there are some great marketing lessons you can learn.

In my recent visit, here are three things I picked up on that can be translated into any business with a little bit of effort.

1. Be about something.
We visited a place called Eataly. It is a creation by Oscar Farinetti of Italy. He opened the first one (30,000 square feet) in 2007 in Turin. The location in NYC is operated by partner and famous chef, Mario Batali. The concept is pretty simple, but also very ingenious. Essentially, Eataly is a huge Italian marketplace with restaurants. It’s chock full of food like an outdoor market, only it’s indoor. Their tagline is, “We cook what we sell and we sell what we cook.” They have chocolate, wine, pasta (fresh and dry), meat, fish, shellfish, cheese and all kinds of other products that go with these items. All the finest foods from Italy. The place was brimming with people, loving the atmosphere, the food, and easily spending their money.

2. Sell something special.
Even though I would say Eataly also hits on this one since they specialize in Italian foods, there was another place we visited that had streams of people buying as well. It was a very small place, and at one point while we were waiting for our order, there was a line out the door. What did they sell that people were lining up for and shelling out a minimum of $3.00? Bubble Tea. What’s Bubble Tea you might ask (a question I had as well)? It’s either black or green tea with milk, sweetener and tapioca (which are the bubbles). Very different, and people (especially kids) were ordering them like crazy.

3. Create an experience.
We had the pleasure of having a very fine lunch at the department store, Bergdorf Goodman on 5th Avenue. If you’ve never been there, it is a high-end store that has its wares uniquely and interestingly arranged on many floors, one of the floors housing the restaurant. Visiting this restaurant brought back memories of when we had restaurants in our local department stores in Cleveland (May Company, Higbees). Anyone remember those? But at Bergdorf’s, what they created was a fine dining experience to match the atmosphere of their store. Top-notch service, excellent food, in an elegant setting. All carried out to perfection and well worth the price.

What kind of things can you do in your business to Be About Something, Sell Something Special, or Create An Experience? It may take some thought, but once you figure it out, it can yield an unending flow of business for you just like these NYC establishments.

All We Want is a Deep and Different Connection

You might be asking yourself why it is so important to develop connections with your clients, customers, and patients. After all, most businesses do not put much effort in cultivating their client base and building a strong relationships with them. So, why should you?

I have had conversations recently with new clients about their businesses being down and that there just is no loyalty among customers anymore. But when I dig a bit deeper, what I typically find is that their problem is they have no real connections with their clients. There is no regular, meaningful communication to forge the bond that builds loyalty and set their business apart, and make them unique in their client’s mind.

Consider that instead of treating customers like transactions, to treat them like people first. It seems that people are so uptight and focused about generating the sales and revenue of days gone by, when the economy was humming along at warp speed that they are forgetting why they do what they do, and how it makes other’s lives better.

They are forgetting to connect and stay connected. Nothing is more important than that. If you have no connection with your customers, you are at risk of losing them. Let’s face it, It was easy to make money when the economy was going like gang busters. Most everyone was treated like a transaction and no one thought too much about it, including the customer. But those “fat and happy” days are gone, the landscape has changed. Consumers are choosier than ever about who they do business with. They want to be recognized. And sadly, fatal flaws like these are being exposed in many businesses.

It’s time to get down to basics. Basics are communication. This is true in your relationship with your spouse or significant other, it’s true in your relationships with friends, it’s true in your relationships with employees. If you have little or no communication, you can’t expect to get what you want out of the relationship. Your customers, clients and patients need deep and different connection with you now more than ever before.

Let me give you an example to illustrate the point and show why it is so imperative to set up and maintain some formalized communication system in your business.

The Scene

• Your back is killing you. You spent the weekend doing some strenuous activities and you’re not sure what is causing the pain you are experiencing.

• Your friend recommends you see his chiropractor. You schedule an appointment.

• The doctor acknowledges your relationship with your friend (gives your friend a reward for the referral) and thanks you for the confidence you placed in him. He diagnoses your problem, gives you an adjustment and your back is feeling brand new again! You couldn’t be happier and more relieved.

This is where the connection ends in most businesses. Transaction complete! On to the next sale.

Now instead, consider how much more of an impact you would make if you did the following–

• Two days after the appointment you give this patient a call and ask him how his back is feeling. He tells you he is feeling fantastic. This one phone call will do some tremendous things for you.
• It shows you care about him. Really care. You took the time to see how he was feeling. He feels good about you.
• It reinforces his decision to use you. You are the consummate professional. He couldn’t have gone to a better chiropractor. He feels good about you.
• You create a deep and different connection. If he should feel back pain again, he is going to remember how you treated him. He is going to call you.
• He feels you are more like a trusted friend, not just a doctor seeing patients every 10 minutes.
• Fast forward one month after the visit and take it one step further. You follow up again to be sure your new patient is still feeling fantastic. He still feels great.

How does this patient feel about you now?
Is he amazed that he is hearing from you long after you saw him?
Is he going to refer you to anyone who complains of back pain?
Does he think you appreciate him?
Has he further deepened his connection to you and been made to feel important to you?

Of course, the answer to each question is YES.

Now, add in your monthly printed newsletter where he gets to know more about you, your weekly email tips that keeps him from further back pain, your monthly offer where he can save money or refer people to you, the St. Patrick’s Day card just for fun, and you are now building that relationship and keeping your new patient loyal to you.

When he throws his back out next weekend playing football with his son, who is he going to call??? YOU. You just brought your sales levels back to where they were before and possibly beyond. Congratulations!

Do You Have an EASY Button?

This time of year seems to make people feel overwhelmed because of everything that needs to get done. Holiday shopping, house cleaning, attending parties, hosting parties, family needs, it certainly is a fast-paced time of year. I know that even though I enjoy all the festivities, I am
looking forward to January 2.

Actually, I think most people feel overwhelmed a good majority of the time, regardless of the time of year. There is so much commanding our attention that it can be extremely difficult to stay focused and get things done.

They say we see over 3,000 advertising messages per day! We have become really good at tuning things out because of it.

We communicate in record speed. Our email boxes are overloaded. Our cell phones are making noises from the incoming messages and texts. That old phrase, “The check’s in the mail” just can’t be used like it was before. It has almost no meaning now. I’m sure some younger people don’t even know what it means!

Then there are clients, patients and customers who want things instantly. Not tomorrow or next week, now. This kind of service is now the norm, not the exception, and we need to be on top of things.

It’s no wonder we feel like we can’t keep up! We can’t!

What I notice with our clients is they don’t have time to get everything done on their own either. They are looking for solutions when they start working with us. Solutions to help them get their marketing done so they don’t have to worry about it, and can focus on what it is they do best. They want to be able to hand over whatever portion it is to us and simply have us take care of it for them. They want it to be easy, seamless and done on time. No hassles, no excuses.

This is what your clients want from you, too. You need to be communicating your ‘EASY button’ or buttons to your prospects and clients. Show them how you can save them time, money, blood, sweat and tears and/or learning curves by what it is you do. For us, we make it EASY with our Ready2Go products. We make it REALLY EASY with our one-on-one consulting.

Let your clients know how you make it EASY for them and how EASY it is to work with you. You can be sure your relationship with them will be a winner. In reality, it will be a win for you and a win for them.