Rewarding Your Loyal Customers

Whether you are selling products or services, every customer that has made a commitment to buy from you deserves the “loyal” treatment. Why? It is in the best interest of every business to retain customers. Loyalty impacts revenues, profitability, satisfaction and even productivity.  In other words, customer loyalty ultimately defines long-term success.

Here are a few other compelling stats that reinforce the value that retention and loyalty provides to an organization:

  • A repeat customer spends 67% more than a new one. (BIA/Kelsey)
  • Increasing customer retention by just five percent, boosts profits by 25 to 95 percent. (Bain & Co.)
  • 75% of companies with loyalty programs are seeing a return on investment. (Experian)
  • Once a provider loses a customer, 68% of consumers will not go back. (Accenture)
  • It is 5-25% more expensive to find a new customer than get a previous customer to buy again.

Market and analyst research commonly reinforces the fact that customer loyalty drives profits and growth. Sales leadership will often concur, as most of those hunting for new customers agree it is harder to get new buyers than to sell additional products and services to an existing customer.

The most common disconnect in business is the failure to ask customers to buy again. The competition loves when companies fail to invest in retention and loyalty.

Loyal customers are an extremely valuable asset to your business. 

Loyal customers are the best advertisers, through word-of-mouth, testimonials, case studies, and events. They are social, sharing experiences in person and online, which heavily influences buying behaviors. 49% of people say they rely on recommendations from influencers when making purchase decisions. (Twitter and Annalect, 2016) Loyal customers are willing to actively help build better products and services with feedback, testing and exposure to development processes.

In order to gain and maintain loyal customers, it requires an investment in retention. Customer retention is part of the buying journey and it should be part of the core sales and marketing strategy. Retention can not be taken for granted, it requires significant effort. The worst investment for a business is to heavily invest in finding a new customer and then losing them to the competition through ineffective retention programs – or just failing to ask them to buy again!

Companies must dedicate people, processes, programs and budget to maximize the true value of loyal customers.  

Retention strategies require a deep understanding of who your customer is and why they buy from you. It requires customer intelligence beyond the basic demographic, social and behavioral details archived in deep data archives, like CRMs or financial repositories. It begins by knowing your customer.

Can you answer these questions about your most loyal customers?

  • What does it feel like when they buy from us?
  • What needs do we satisfy or pains we resolve?
  • How do we improve our customer’s life?
  • Why do you trust that we will deliver what we promised?
  • When have we exceeded your expectations?
  • When have we let you down?

Because customers are the best marketers for your products and services, they require your constant and consistent attention to retain them as loyal buyers. Maybe start with a simple thank you. When is the last time you thanked your customer for just that, being your customer?

One retention strategy that is often used in consumer product and retail industries (B2C) are loyalty programs. However, programs for rewarding loyalty have are now more common in B2B industrie

A loyalty program is a rewards program offered by a company to customers who frequently make purchases. A loyalty program may give a customer free merchandise, rewards, coupons, or even advance released products.

Common Types of Loyalty Programs:

  • Frequent Buyer and Affinity Programs: These programs often have a gamification aspect through tiered point systems or memberships. They provide special incentives, access or upgrades to products and services. Cash back rewards can also be used as incentives in these types of programs. These types of programs have long been used by travel companies, though they are now more common in other industries.
  • Exclusive Offerings: Companies will often reward their most loyal customers with offers that are not open to the general public. It is a way to create a special bond and relationship with the customer. Exclusivity is best when personalized to the customer, exclusive and inclusive.
  • Advisory Councils:  Customer voices can help drive innovation and should be at the forefront of all development, marketing and sales programs.  Listening to customers can save companies time and money in product development, go-to-market strategies and testing of product features and new services. The most loyal customers appreciate the opportunity to offer their advice. An advisory council is a prestigious recognition of the value the customer provides to the company.
  • Buyer and Community Groups:  These types of programs can be virtual and local. It provides loyal customers an opportunity to engage with like-minded fans, while making a social connection to the brand, product or service. It is a great way to drive influence through the customer’s shared experiences and sense of belonging to something special.
  • Samples and Free Trials:  Freemium offers help build an audience of loyal fans that can be later used to market and sell paid value-add solutions, products and services. This is common in the digital world and for SaaS offerings. Consumer products have long used sampling to find and attract new customers. It is also a way to retain existing customers by extending lines of product types.
  • Program or Product Upgrades: Software companies learned early on that if you get a customer to continually upgrade their product, lifetime value increases exponentially.  It takes major disruption to move loyal customers off products and programs that have frequent upgrade components, as the investments are usually pretty heavy in the implementation phase and upgrades are a way to sustain value.
  • Customer Events: Opportunities to personally engage with the “faces” that create the products and services for a particular company are best at live events. They can be exclusive to customers and also be opportunities to invite in prospects. Software and technology companies have used customer events to reward their clients through high-end productions and activities, including access to founders, innovators and celebrities.
  • Rewards and VIP Incentives through Earned Points: Customers earn points based on purchases to use for additional services, products of special offers. Through loyalty cards, coupons and even online programs, customers can see the tangible benefits of staying loyal at time of purchase or through customer-only reward websites.
  • Discounted Renewals and Subscriptions: Commonly used in SaaS programs and media, this is a way to retain customers with deeper discounts for longer renewals. The best way to retain a customer is through auto-renew subscriptions and continuous service agreements.

When you create the structure of your loyalty and retention programs, ensure that the benefits and reward system is relevant to the customer experience. Know what is most valuable to your customer. Ask your customers, listen to their requirements and watch the competition when you are designing loyalty reward and retention programs. Research is paramount to the ultimate return on any program investment.

In order to effectively implement any type of customer retention strategy, it means you need start with good data.  Know your customer, what they buy, the average purchase, frequency and their value. This will help determine the budget and costs to retain customers.

The data can then be used to create strategies for account-based marketing loyalty campaigns and retention programs, as well as (ABM) programs for sales. The more data, the better the targeted planning and results of any reward program.

Finally,  loyalty requires carefully devised communication and marketing strategies, internally and externally, to fully benefit from any loyalty program and retention ROI.  Awareness and engagement will drive influence and action. The time that it takes to create the program needs to be met equally with the investment in time and resources to get the word out about how it ultimately benefits the customer.Your

Retention and loyalty is very rewarding.  With all effort and investment in capital, time and resources, be sure to measure the results in sales, productivity, profitability, satisfaction and lifetime customer value.

Jamie Glass, CMO and Founder of Artful Thinkers, a sales and marketing consulting company.

Entrepreneurial Lessons from Your First Job

We have all had one. A first job. Someone looked you in the eye and said, “You are hired!” The decision confirms they trusted you to represent their business. They were willing to invest in you, train you, teach you how to earn a paycheck.

Your confidence swells with the first yes. Your stride is more brisk, your smile broadens. You did it! You are accepted, wanted and needed. Someone recognizes you for being a contributor. Then, the apprehension begins. What if they don’t like me? What happens if I make a mistake? Can I do this job? The overwhelming reality of being responsible of earning a wage is measured by the sudden onset of nervous excitement.

Many of the emotions and fears of starting your first job are similar to starting your first business. Entrepreneurs have to balance the adrenaline associated with being in complete control with the reality that businesses fail. Lingering in the bravado are facts from the Small Business Administration (SBA) that nearly a third of businesses fail within the first two years. Reverting to your confidence that says “just do it” because you are different and better, you focus on the statistical favor that you do have a 66% chance you will make it.

The first time you do anything is valuable experience. Recalling what you learned at your first job is an excellent way to apply past experience to a new first – starting your own business. Here are some tips to take from your first job that are nuggets of wisdom to apply to your startup venture:

1.  Embrace the Fear of Failing – You have an option to be paralyzed in fear or embrace the opportunity that if you try, you may succeed.  We all know examples of the person who tried over and over again, failing countless times before they finally made it!  They never quit. Using the knowledge of each failure, big or small, prepare yourself for the possibility of next time.

2.  Take Pride in Your Work – Others are counting on you to help them.  Any business is defined by satisfying a need.  If they need you, take satisfaction in your ability to help.  In the early stage of a new business, people will flock to those that are confident in what they deliver.  Uncertainty creates worrisome customers, or even worse, potential customers who never buy.

3.  Always Be Learning – You are glowing green at your first job.  You are a blank slate.  Your training is the groundwork for how you will perform. Soaking up expertise from those that proceeded you is smart business.  What you don’t know today, can propel your business to the next level. Find expertise.  Be a knowledge consumer.

4.  Businesses Reward Hard Work – As you master the skills necessary to do your first job and do it well, you soon learn that businesses reward performance.  Promotions and raises are given to those that work hard and do more than their peers.  Your customers will reward you for your hard work.  Their loyalty is associated to your ability to outperform your competition.

5.  Listening Skills are Important – Listening to your customers in your first job and in your first business is elementary.  Your customer is paramount to delivering products and services that meet the customer’s needs.  Failing to listen increases your odds of an unhappy customer.  Unhappy customers tell others of their experience.  Listening improves potential for high customer satisfaction.

6.  Time Management is Critical – There are no rewards for showing up late or missing work.  One of the most important skills acquired in the first job is how to manage your time.  You soon learn there are no acceptable excuses.  Juggling priorities becomes primary to your success.  Owning a business depends on the genius of multitasking.  You will work harder and that means you have to work smarter to get the job done.

7.  Handling Money Builds Trust – When you take money for any product or service, you are now accepting the currency of trust.  You are expected to provide equal or greater value in the exchange of cash for goods.  Exceeding expectations builds credibility.  Manage others money with the same respect you demand from those that manage yours.

The knowledge acquired from a first job is fundamental to a startup. How you apply that knowledge and skill will often result in similar or better experience as an entrepreneur. The mistakes are lessons of how to do something different. The successes are foundations to build upon.

Challenge yourself to reflect on your first job. What was the best lesson learned on your first job? Can you instill this in your values, culture and standards as a business owner today?

Nothing is a waste of time if you use the experience wisely. ~Auguste Rodin

By Jamie Glass, CMO & President of Artful Thinkers and Managing Director of Sales & Marketing Practice at CKS Advisors.

Competing is Winning the Gold

Pictures: Stuart Ruckman - The Australian

There will be a total of 302 gold medals awarded at The Games of the XXX Olympiad.  There are more than 10,500 athletes competing from 200 nations and territories.  Every four years we create an engaged global audience that together watches, cheers and celebrates the world’s best compete for gold.  Humans love competition.

The definition of compete is to strive consciously or unconsciously for an objective as in position, profit, or a prize (Merriam-Webster).  When we join forces to compete, we become one.  Competitors seeking a prize.  Competing to win.  That makes us all winners.

We look beyond borders and differences and we unify to revel in athleticism.  We encourage those competing to push harder, overcome challenges and fight to cross the finish line first.  We celebrate individuals, teams, countries and the world.

Some say showing up is success.  It takes more than showing up. It takes competition to engage us.  Why?  Competition motivates, inspires and rewards.  It drives us.  It excites us.  It makes our heart beat accelerate.  It is an experience.  Flags wave faster, people stand taller, crowds cheer louder and we watch more intensely when the competition heats up. Good competitions get everyone involved in celebrating success.  Showing up is just doing a job.  Competing is striving to win!  We want to be with the winners.

Have you created a competitive culture in your business?  Does everyone on your team compete to win?  Whether we are awarded gold medals, business awards, new contracts, customers or simply a thank you, the best motivator to drive us is competition.  To win in business, you need to compete.  When you compete internally and externally, you will be rewarded. You will win.

There are many ways to compete in business.  You can easily set up internal competitions to meet deadlines, achieve sales numbers, launch products faster, reach new levels of customer satisfaction, increase profits, grow your customer base, or decrease errors.  There are great financial gains awaiting through external competitions.  Winning new business contracts, opening new markets, reaching higher industry standards, increasing shareholder value, gaining on the competition for market share, all will reward your business and will help drive your team to strive for more.

The worst statement made to an investor is “We have no competition.”  Beyond the absurdity and audacity, is the fear that if you have no competition, you won’t be motivated to win.  Investors love to put money in businesses that are competing in a race to the finish line.  In the eyes of an investor, the finish line may be an exit with a 5 or 6 multiple return on investment.  What is your finish line?  You always have competition, inside and outside of your business.  You always compete.  We invest in those competing to win.

If 200 nations understand the value of competing to win the gold, what is stopping you from doing this in your business?  Competing is winning.  Cultures that compete, win.  Create a culture that embraces winning.  Teams win when they know the goals and they have leaders that encourage them to complete.  They will compete when they are rewarded for winning.

The Olympic spirit is not a myth.  It is a reality. It inspires us.  It is a feeling that touches us deep in our gut and makes us feel emotional about trying hard to achieve something far beyond the reach of most of us.  This same spirit has the power to unite millions from around the world to participate by simply watching others go for gold.  When they win, we win.  Every gold, silver and bronze medal for Team USA, feels like all Americans win!  Every country feels the same about their exceptional team of athletes.  That would make us all winners.  Worldwide winners!

Most people want to be a part of a culture that celebrates winning and achievement.  When is the last time your brought your team together to motivate them to compete. Provided an opportunity to win. When did you last recognize others and reward individuals, teams and the entire business for winning?

Now is the perfect time for you to inject more competition into your business, into your culture.  You can blame it on the Olympic spirit!

We won!

By Jamie Glass, CMO and President of Artful Thinkers and Managing Director, Sales & Marketing Practice at CKS Advisors.