Customer Loyalty Programs

The other day I went to Costco to replenish several items in our home. As I was checking out the cashier called someone over who pulled up my purchase records. Turns out that if I upgraded my membership I could earn money back on my purchases; enough to more than pay for the upgrade. Why not?

Now why would they offer to give me money back on my regular purchases? Because they know that now I will choose Costco over the grocery store or another discount warehouse. They increase their volume without advertising or marketing. This is a customer loyalty/reward program that works. It effectively costs them nothing and they’ve increased the odds that their current clients will buy more.

Panera Bread Bakery-Cafes had a loyalty/reward program where you could get a free cup of coffee after the purchase of ten cups. They had to discontinue the program because someone created counterfeit cards and offered them on the internet.

So, what can we learn from these examples? First, it’s a great idea to offer a customer loyalty/reward program. It’s less costly to keep current clients than it is to find new ones. Add to that the idea that you should try to capture all of the business you can get from your current clients and you’ve got the foundation for a loyalty program.

Second, make sure it’s something easy to implement and explain. If it’s too complicated no one will use it because they won’t understand it. Moreover, you don’t want to create a plan that is costly.

Third, create a program that can’t be hi-jacked. Consider the Panera example. The loyalty card was too easy to duplicate so someone did. Unfortunately, there are unscrupulous people out there.

Interestingly, participation in loyalty/reward programs is up in this recession. According to Colloquy research. “U.S. consumer participation in rewards programs is on the rise across all demographic segments, . . . Consumers are leaning on loyalty programs to stretch household budgets further by earning rewards for their purchases.“

What does this tell us? That using loyalty/reward programs can be an effective strategy for increasing revenues even in a recession.

Beyond the lessons learned from the examples above is the understanding that in order to have customer loyalty you must provide an excellent client experience. It will do you no good to have a program if your product, service, and/or customer service is sub-par. Think about it. If the experience isn’t good there isn’t a program in the world that is going to keep clients coming back for more. So, in reality, customer loyalty/reward programs begin with customer service.

Social Media - The Downside

Does Your Business Have A Facebook Fan Page?

Facebook is getting some serious attention these days and for good reason. There are some interesting ways to stay in touch with your friends and reconnect with some people that you may have "forgotten" about over the years. You can also keep in touch with family and allow people who you do business with to see something a little more about you. While it can be fun and interesting, it can also be incredibly dangerous if you don't show some restraint.

One of the real business applications of Facebook is the business/fan page. I have seen quite a few of these pages popping up around companies that haven't had a social media presence until someone decided to put the page together. I find it funny what a Pollyanna attitude people can have when it comes to social media, though. No one likes to consider the dark side of doing something like this.

Dark side? What could possibly go wrong by putting some innocent banter about a company on Facebook? What could possibly create more harm than good? There are two main concerns.

The first is Business/Fan page neglect. There is plenty of evidence of what I call the Facebook "rush." The company page is started by a peppy, overzealous person who doesn't truly understand that they have potentially pried the cap off a huge can of worms. There is a month or so of furious activity and a ridiculously high level of expectation that the pace and quality can be maintained. Next thing we know, the employee assigned has left or has lost interest. The updates slow and the quality slides. Suddenly, there is a house that was once the pride of the neighborhood that has fallen into ill repair.

Neglect leads to the next problem, the Facebook landmine. The moment that no one is minding the Facebook shop, it happens: unhappy customers turn into your biggest anti-fans. They sneak in and start to subvert the efforts of the company page to create a whole new problem, Facebook Reputation Monitoring. If you or someone in your company is only paying lip service to the maintenance of the page, a negative comment could sit on a "fan" page for an extended stay. I've seen this. A bad review and no response on a business page is just bad business. It happens a lot more often than we want to think.

So the takeaway here for Facebook is that if you are going to get in, you must stay in. You swing the door wide-open to a lot of really good things. That door swings in two directions, though. You can just as easily create a customer service nightmare. You'd better be completely sold on the possibilities, because the surprises from some of your "fans" could be more trouble than it's worth.

Don't stop advertising!
McGraw-Hill Research looked at 600 companies between 1980 and 1985 and found that businesses that maintained, or increased their ad spending during the 1981-1982 recession had significantly higher sales post-economic slump. In fact, companies with aggressive advertising had 256% higher sales than companies that did not advertise.

E-Mail Ettiquitte. 32 Rules To Follow

It's amazing to find that in this day and age, some companies have still not realized how important their email communications are. Many companies send email replies late or not at all, or send replies that do not actually answer the questions you asked. If your company is able to deal professionally with email, this will provide an important competitive edge. Moreover, by educating employees as to what can and cannot be said in an email, you can protect yourself from awkward liability issues. Here is a compiled list of rules and advice on how you can ensure that your policies are effective:

1) Be concise and to the point 2) Answer all questions, and pre-empt further questions 3) Use proper spelling, grammar & punctuation 4) Make it personal 5) Use templates for frequently used responses 6) Answer swiftly 7) Do not attach unnecessary files 8) Use proper structure & layout 9) Do not overuse the high priority option 10) Do not write in CAPITALS 11) Don't leave out the message thread 12) Add disclaimers to your emails 13) Read the email before you send it 14) Do not overuse Reply to All 15) Mailings > use the bcc: field or do a mail merge 16) Take care with abbreviations and emoticons 17) Be careful with formatting 18) Take care with rich text and HTML messages 19) Do not forward chain letters 20) Do not request delivery and read receipts 21) Do not ask to recall a message. 22) Do not copy a message or attachment without permission 23) Do not use email to discuss confidential information 24) Use a meaningful subject 25) Use active instead of passive 26) Avoid using URGENT and IMPORTANT 27) Avoid long sentences 28) Don't send or forward emails containing libelous, defamatory, offensive, racist or obscene remarks 29) Don't forward virus hoaxes and chain letters 30) Keep your language gender neutral 31) Don't reply to spam 32) Use cc: field sparingly

Social Networking, or Online Business Communities

Social media is the new term for one of the oldest human activities... communication.

For individuals, the term is completely intuitive; connecting and sharing through online technologies. And when platforms like MySpace and Facebook were built, the digital natives (part of Gen X and all of Gen Y) strapped this latest craze to a rocket and blasted into the pop-culture stratosphere.

But, for a business, a social media strategy isn't about being intuitive, it's about return on investment. Consequently, the term can be a stumbling block for businesses on two levels.

1) Decision makers older than the digital natives, not appreciating the time and resources spent on something called "social" might say; "if you want to visit, go see your grandmother. I need you to sell something today".

Indeed, even this industry's leaders have yet to produce anything but red ink for their fish-eyed bankers and long suffering investors.

2) The bloom is already falling off the public relations rose of the popular social media sites as the mainstream media shifts from ga-ga over popular culture fruit of the month to more critical reporting on business viability, security, privacy and other issues. Therefore, business owners and managers may, unfortunately, associate the challenges of the social media industry with the importance of building and serving online communities dedicated to their own customers.

So, what's the answer? Here are two thoughts:

1) In a business application let's replace "social-media" with the more accurate term "business networking online", or how about "building online communities"? This isn't, as Shakespeare would say, a rose by any other name. Any business activity that is as essential as building online communities is becoming, deserves it's own name.

2) Businesses large and small should focus appropriate resources on the essential 21st century marketing strategy of creating and nurturing online communities where they connect with customers and prospects who they hang out there because they agree with the values of the hosting business and benefit from the value they find there.

As eBay became just another marketplace in the clouds, social media will morph into just another wrench in your marketing tool-box. But, the online communities your business builds will increasingly be the way you establish and maintain quality relationships with customers.

In the future, more customers will connect with your business through online communities you build and serve than from any other marketing source!

As always, we appreciate your comments

Direct Mail Vs. E-mail Campaigns

I recently recommended that a client test a direct mail program to augment their online efforts. Sure it’s expensive, but when I looked at the company’s demographic, which didn’t exactly scream ‘tech-oriented’ or ‘I live online’, I thought it was worth a try. But it did get me thinking about the pro’s and con’s of direct vs. e-mail, so I thought I’d toss down a few thoughts.

With direct mail, you can do something eye-catching that makes you want to take a second look. With e-mail, the eye-catcher won’t be graphic, it’ll have to be the message line. (Which is not to say that you can get away with ignoring the graphic element of an e-mail marketing piece.)

With direct mail, you get to tell more of a story. Sure, this may only appeal to information-junkies like me, but sometimes more is better. With e-mail, you have to get to the point fast. This forces you to go through the process of figuring out what’s most important, a process that you shouldn’t (but might well) neglect with direct mail.

With direct mail, if it doesn’t get tossed immediately, there’s a pretty good chance that, when someone sorts through their pile-o’-mail at a later time, they’ll take a look. Also, now that the balance has shifted and most of us get a lot more e-mail marketing pitches than we do direct mail, direct mail might stand out better. With e-mail, if someone doesn’t open-me-at-the-moment, the probability that they’ll get back to it later is not much above zero.

With direct mail, you need more lead time. Not as much as you used to need to get something designed and printed, but it’s still faster to create an e-mail campaign: just don’t forget that it still needs to look good, and have a landing page that looks good, etc.

With direct mail, a campaign will cost you more - but the question remains: are there some situations where it’s more effective to use direct mail. Sure, it will cost you more, but you may end up getting what you pay for: better results.

What’s the best way to approach things?

Consider your audience: For an older demographic; a business market that’s not especially technical; or just a market that you want to let know that they’re worth the price of a stamp and a postcard (or a more expensive dimensional mailer), direct mail has to be high on the consideration list. For a younger demographic (but not so young that they don’t use e-mail anymore); or for a technical market that embraces the virtual and shuns paper, e-mail marketing is a better approach

Target well: Given the expense, you obviously want to target your direct mail really carefully. The good news: it’s cheaper and easier now to come up with finely targeted messages, even with direct mail, given printing costs and production efficiencies. But it’s not as if e-mail costs zero. You may not have to target as finely as you do with direct mail, but what’s the point of sending out 10,000 e-mail messages if only 100 of the recipients are really likely buyers.

Put some thought into the message: This may seem d’uh obvious, but I’m guessing from the number of marketing e-mails I get that there are plenty of people out there who still don’t think about what they’re saying. You need to make sure that the subject line is going to get someone to read the e-mail. (But you also need to make sure that once they do open the e-mail, there’s some payoff for them. Same goes, of course, for the direct mail piece, but I do think that - given the cost differential - people do tend to put more thought into something that gets printed. They may not always hit the mark, of course, but you can generally catch the drift of what they’re trying to get across.

Test things out: Even if you’re not doing mass direct or e-mails, it still pays to do some testing up front. Test messages, test offers, test subject lines. On the direct mail front, we are blessedly beyond the era when it was supremely costly to do small print jobs. Take advantage of this. And just because e-mail’s cheaper and more immediate, you’ll still get better results if you do some testing in advance of the big “Send”.

Why Use Promo Products?

Why should your company use promotional products like pens, caps and other customised items?
TOP EIGHT USES OF PROMOTIONAL PRODUCTS

1. Promote goodwill/image
2. Reinforce marketing of existing products, services, facilities
3. Recognize employee performance
4. Generate sales leads
5. Promote trade show traffic
6. Introduce new products, services, facilities
7. Stimulate employee sales performance
8. Stimulate employee productivity

Promotional Products are being positioned more and more, not as a pure product, but as part of the promotion buyer’s promotional and communications mix. High speed information gives the audiences a choice about whether they wish to be exposed to mass advertising. Promotional Products advertising has proven to be much more effective in its unobtrusive, targeted, personalized approach.

Due to its useful nature, promotional products tend to be kept and used, leading to voluntary repeated exposure, recognition and retention of the advertiser's name and/or message. The use of promotional products is most effective when the target audience is specifically identified. Items can then be selected to appeal to that audience, creating a positive response and eliminating waste distribution.

Which products to choose when there are tens of thousands of products to choose from? This task is most easily accomplished with the help of Results Marketing!