Retention & Loyalty Program Design
Jim's Intro: Marketing Agencies / Consulting Groups with
clients in need of a customer retention or loyalty program should
beware of the following issues when selecting a vendor.
Here's a few interesting facts from the world of Customer
Retention & Loyalty:
A rebate program (get a $5 coupon back for every $150 you purchase,
for example) is not a retention or loyalty program. It's a profit
destroying program which significantly lowers the margin of your
best customers and drives little or no incremental profit among
Better service does not by itself increase customer retention or
loyalty. Rather, good service is the minimum requirement needed
to operate a profitable customer retention or loyalty program.
If your service stinks, adding a customer retention or loyalty program
will make it much, much worse. Trust me. If you want
examples, call me. Been there, done that. I won't design a
program for a company with rotten service (anymore), period.
Customer retention and loyalty programs are supposed to be profitable,
and the well designed ones are. You can very accurately
model the financial benefits of a
program before it is implemented. If you are talking with
someone who says this kind of modeling is not possible, then one of
the following scenarios is probably true:
- You don't have nearly enough data on your customers, and should
not even be thinking of a retention or loyalty program at this
juncture. I can help you with this, by telling you what data
you need and providing ideas for the collection of it.
- You have the data but you don't know how to extract the
information you need from it in order to do the modeling. I
can help you with this too, by creating the proper Metrics
and Reporting you need.
- The people you are talking with just don't know what they are
doing, and are trying to sell you some kind of idea that is not a
real retention or loyalty program. I can't help you with
this, unless you want to use somebody else for your design.
Customer Retention and Loyalty programs can be very, very
profitable. The problem is most people simply do not understand
how to design them correctly, and do not understand the need for
tracking, analysis, and program refreshment to keep the profitability
Many customer retention and loyalty programs begin life as
profitable efforts, but are left to wither and grow stale, ultimately
resulting in negative profitability. If you need to redesign an
existing program properly, I can help you.
Finally, CRM is only a failure because people don't know enough
about their customers before they implement, and end up putting too
much cost in up front. If you are thinking of going the CRM
route, the best thing you could possibly do for yourself is put in
a customer retention program first. The program will tell
you what you really need from a CRM perspective, and save you a ton of
money down the road. Try it, you'll like it.
I've designed customer retention and loyalty programs for some
pretty successful companies and agencies,
both online and offline. Can I design one for your client?