THE TRUTH WE KNOW: It costs more to acquire a new customer than to retain an existing one.

THE CHALLENGE WE FACE: Growing business in spite of increasing product parity and intensifying competition.


  • Enhance existing brand loyalty
  • Improve customer retention and lifetime loyalty
  • Increase dollars spent by customers for your brand

Putting it simply, we seek short term gain in sales but we are also laying the foundation for long-term profits.


  • You brand enjoys a certain amount of loyalty already.
  • Your products and services satisfy customer needs most of the time.
  • Offering a loyalty program will give you an advantage over competitors.
  • You know which customer segments you want to target for retention.
  • You have determined success benchmarks for each segment.
  • You are prepared to invest the time to develop, test and analyze a formal loyalty program.
  • Operationally you have the resources to manage a formal program.
  • Implementing a formal loyalty program is recognized as a long-term strategy.

If you answered yes to the above, a formal loyalty program is the best approach for you.


Once you've decided to make the commitment to a formal loyalty program, there are key issues to consider.

  • Fees or Automatic Enrollment
  • Fees
  • Annual or One-Time
  • Fee guarantees the value of membership
  • Strong guarantee overcomes customer hesitation
  • Rebate of fee if customer expectations are not met
  • Automatic Enrollment
  • After specific number of Purchases
  • All subscribers
  • Terms of membership
  • One year
  • Brings more revenue
  • Risk of attrition because customers must decide wherever to continue
  • Lifetime
  • Less revenue but potential members view them as less risky and more likely to provide them with their money`s worth
  • Renewals
  • Automatic
  • Reminder notices
  • Hard Benefits
  • Discounts
  • Free or upgraded shipping
  • Free gifts
  • Special payment plans that are not offered to nonmembers
  • Discounts on all items
  • Discounts only on selected items: must be sufficient number and must include popular items
  • Soft Benefits
  • Available only to members or only to members without charge
  • Toll free service lines
  • Private early announcements about sales
  • Previews of new merchandise
  • Extended guarantees
  • Newsletters or magazines
  • Anything of value to customers that is service oriented
  • Fast delivery
  • Special treatment and recognition when they call
  • Logistics
  • Track points for redemption at a later date
  • Requires software
  • Discount purchases immediately
  • Has immediate impact
  • Membership Tiers
  • One tier
  • Two tier
  • Move customers up step by step
  • Ensures customers that you consider them extra special.
  • More complex to oversee

After you have determined the strategy for your loyalty program make sure that it is clear and understandable. It is counterproductive to excite your customers and then have their enthusiasm turn cold because of confusing or complicated rules. Make sure the terms and policies are simple and straightforward. Most of all make sure that you have offered real value in the benefits offered. You want your targeted customer segments to feel that they'll be missing out on something great if they do not become members.

With all your ducks in a row, now is not the time to rush in and make a blanket offer to every customer and prospect you come in contact with. Once you announce the program in every catalog and on your public Website you will not be able to withdraw it should you decide that the program is not working for you in terms of achieving your sales, profitability, and increased customer lifetime value goals. Execute a test by segmenting a portion of your targeted clients. Set up a control group – those who won`t be offered the loyalty program. There are different ways to run a test but the bottom line is that you want to be confident in the results BEFORE you set the date for a full-scale rollout.

Formal loyalty programs can be challenging to implement, and they may not be the optimal way to achieve your retention and profitability goals. But when they are done right, loyalty programs can help you convert more prospects to buyers and encourage more of your buyers to behave like your best customers.

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