Christmas is an odd time of year for me, because I go into a lot of shops I would never otherwise visit. Admittedly, I shop online a lot—and it’s not because I don’t like going out in public. I actually love going to the mall. But on a busy day I don’t have a ton of time and it’s super easy to order holiday gifts while I watch Netflix. So I find myself online, browsing products at unusual stores I never knew existed. About half the time I actually end up visiting the store so I can look at whatever I want to buy before I pull the trigger. And because I hate paying for shipping.
Because I make my living in marketing, I find myself frequently critiquing stores and advertisements. It baffles me how they promote their business (branding and messaging) and market the products inside and outside the store. I also pay special attention to how they try to sell me on their loyalty programs. Most of the time, these conversations go like this—especially, it seems, in these stores I’ve never visited before:
Cashier: "Are you a loyalty member?"
Me: “Oh, no. I actually have never been in this store before.”
Cashier: “Oh, well, if you sign up you get X number of extra points and a $10 off coupon on your birthday.”
Me: “No thanks, I actually only came in here for this one very specific thing that I’m buying and it is unlikely I will ever return."
At this point, if I’m lucky, I can just pay and leave. However, more often I get a no-effort plea to join their loyalty program. This is always awful, because it’s my first—and maybe only—time experiencing the business. I don’t want a desperate pitch about a program I’m never likely to use. I don’t want your credit card. And I definitely don’t want your key fob. Now, because of the continued hard-sell, I don’t even want to come back.
We all understand the importance of customer loyalty programs, and we all understand the wealth of data they collect. (If you don’t, we should talk.) What I don’t think we all understand is how the seeds we plant today can provide for us years down the road.
Here’s what I mean. Imagine if that same conversation above went like this:
Cashier: “Hello. We noticed you aren’t a loyalty member. Would you like to sign up for our program?” (Because if you have a way to identify your best customers when they walk in the door, and we do, why would you wait until they got to the register? But that’s another post someday about treating your customers differently.)
Me: “Oh, yeah. I don’t really need another loyalty program. This is the first time I’ve ever been here, and it’s not likely I’ll need to come back any time soon.”
Cashier: “Oh, that’s okay and totally understandable. If this is your first time here, we have something for you to say thanks for checking out the store.” Pulls out a gift for me.
Me, looking at the gift: “Oh, wow. That’s cool. Thanks!”
Cashier: “No problem. Would you be willing to take a short survey online about your experience today?”
This is a much more pleasant experience, because I didn’t feel pressured into a loyalty program I don’t think I’ll ever use. If you’re wondering what the “gift” they gave me was, it doesn’t matter. It would be something different for every business—but it needs to be a value add, and it has to show appreciation. It could be as simple as a thank you note from the store manager.
The point is, when they understood I was either a new customer or a one-and-done customer, I was treated differently. My experience became more personalized. The buying cycle can be really long, so rather than trying to get me into a points program I won’t use, I’m recognized for my business right away, forming an immediate positive association with their store. If I actually go take the survey the cashier positioned, I’m going see they are asking me segmentation questions to identify if there’s anything in their store I might need, want or buy in the next 12 months. Depending on how I respond, I will be sorted into one of several buckets. When the time is right, I’ll receive a focused message reminding me of my good experience thus upping my chances of visiting the store again.
This is why the sales cycle is so critically important. Depending on which study you reference, between 40% and 70% of people signed up for loyalty programs are actively engage with less than half of the programs they are in. If half of your “loyal customers” aren’t engaging, then do you really have a loyalty program—or do you have a top performer program?
Pay Attention to the Sales Cycle and Create Meaningful Touchpoints
If you want to capture the wallets of more customers, you need to pay attention to the sales cycle. If we go back to my examples:
The win isn’t the first time I stop into a store. The real win is planting the seeds today so you can harvest the contents of my wallet later. The next time I need the thing you sell, I’ll choose you over all of my other options. That is true loyalty, and it starts with the concepts I noted above: excellent customer service, meaningful value-adds and understanding me as a customer. These are easy-to-understand principles that are not so easy to execute unless you have an eye on the future.
It’s hard work, too. You may need significant changes to POS, integration with new and advanced technology, and additional training and messaging to your field and counter sales teams.
The new motto moving forward won’t be “the customer is always right.” The new mantra needs to be “the customer is always appreciated.” Utilizing data and smart, positive experiences to personalize the interaction with you customers in-store and online will help you stand above the competition. Anyone can give away a 7th burrito on a punch card. How can you do better for your customers to increase their lifetime spend?
Traditional loyalty programs are only driving behavior for about 30–50% of your audience. How you target the other half of your customer base is what can really please shareholders and executives. Loyalty doesn’t have to be a one-size-fits-all approach. By placing extra consideration on the length of your sales cycle for your infrequent customers, you can ensure, when the need arises for your product or service again, customers will choose you over the competition.
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