Loyalty programs begin with wanting to reward loyal frequent customers, however most loyalty programs fail within 2 months of implementation because there isn’t a strategy designed to support them. Recently I attended an event hosted by Spin Pizza where I learned how their loyalty program achieved success.
They started by identifying that they did not want it to be a discount program. Offering frequent discounts tells the customer you’re playing with margin and they are being over charged at regular price. Reward based loyalty performs better than instant discount by more than 42%.
Upon customer sign up they load the users card with points, this kind of “primes the pump” so to speak. The customer then builds additional points per visit, when certain bench marks are reached the customer gets special perks like “Spin Club Dough”, basically cash vouchers that can be used for purchases. Loyalty rewards need to be carefully analyzed to determine how tolerable the reward is to sales. As a customer it would be nice to get paid for eating pizza, but that wouldn’t be the most beneficial business model for a restaurant.
A point of their focus upon signup is to gather the customer’s email. Those willing to provide email addresses receive their newsletter which informs of community events, happy hour specials, featured items and holiday specials. Having customer email provides the opportunity for them to speak directly to customers for things like surprise and delight specials or rewards on their birthday; gestures that add a personal element and make the customer feel important and smart for signing up. Personalization is key to building loyal customers, the major benefit is, loyal customers are easy to sell and cost way less to get in the door.
Spin Pizza explained a few other points to consider for running an effective loyalty program.
- Keep the program easy and flexible, if it’s difficult for customers to earn rewards they walk away. I joined one company’s loyalty program and found out that it required a certain amount of visits per month to reach benchmarks, and at the end of each month your “status” went back to zero. Needless to say I got rid of the loyalty card.
- Open a 2-way on-line communication channel. People do want to provide feedback, sometimes good sometimes bad, but almost always behind the safety of their keyboard. Show gratitude for their communication regardless of the input, even poor reviews are opportunities for improvement and gives you a chance to reel that customer back in for a visit.
- Continuously evolve your loyalty program. Implementing new technologies eliminates errors, can provide hyper targeted messaging and can make the program experience more enjoyable for the customer with things like gamification.
Employing these practical tips kindly offered by Spin Pizza will help build your customer base and increase your long-term income.