S7 E15 – Launching a B2C business? Why you should be thinking about your customer loyalty programs now with Jeremy Gray

Episode 15 – Launching a B2C business? Why you should be thinking about your customer loyalty programs now. ​ Why should I be thinking about a customer loyalty program even before I launch my business. I am not ready to give discounts and I don’t even have any customers yet. This is an understandable reaction. Many companies have loyalty programs. Why? Do they like giving away money? Loyalty programs are huge profit generators. Airlines make billions of dollars from their loyalty programs. But even if you are not an airline Keeping an existing customer costs up to five times less than winning a new one. It’s easier to persuade a customer who already knows you to buy again and/or buy more from you. 20% of customers are typically responsible for 80% of a company’s revenue. Your most loyal customers will be your most profitable. With each additional year of a relationship, customers become less costly to serve. Over time, as the loyalty life cycle plays out, loyal customers even become business builders: buying more, paying premium prices, and bringing in new customers through referrals. Your early customers will likely be the customers who believe most strongly in your product or service. It resonates with them so strongly that they are willing to take a bit of a gamble in doing business with a company with no track record. So doesn’t it make sense to take steps to ensure their loyalty from day one.

Somethings to consider when designing your customer loyalty program: What incentive are you going to offer? Points? Cash back? Gifts? Starbucks uses points that can be redeemed for free drinks, food, discounts – provides flexible options. Surprise gifts can be a great builder of loyalty. What behaviors are you trying to drive? If you want customers to interact via an App, reward them for using the App. Regular purchases? Consider a higher reward for those customers who repeat a purchase within a certain time frame. Think of your ideal customer and personalize your loyalty program for them. Sephora’s loyalty program has a three-tier program. You can join for free and as you get more points you progress up the tiers you get access to better rewards. Give back to the community in a way that is meaningful to your customers. Patagonia, the outdoor clothing company, gives 1% of its sales to environmental causes. If you are selling books you could give to literacy charities.