This lesson is my continuing look at the 30 year list selected by DMNews. The strategies we discuss are in no particular order.
Loyalty programs are well known and clearly successful. Best Western is one of the oldest at 20 years, but most big hotels and airlines now have some sort of a program.
One of the interesting things about these programs is how they expand and contract over the years and how they are also adaptable to any kind of business – national or local. On the expansion level, Delta just announced that you can trade in sky miles for many other things instead of just flying. Miles can be redeemed for gift certificates to national restaurants and retail merchants. These expanded offerings were resisted for a long time but I think they will find it makes the use of the miles accumulated easier and members will think of the airline more often and more favorably when they can use the miles for items they might otherwise have to pay cash for.
Loyalty programs are also adaptable. We use a variation program in our Kennedy’s Barber Clubs. If you are a member, you are given a business card with your own name on it and are invited to hand them out to your friends with a free “haircut and Shave” coupon on the back. If the coupon is redeemed and the customer becomes a new member then the member who passed out the card gets a free month of service. It is a great deal for everyone. Members have an opportunity to do a favor for a friend and at the same time get real value awards for the gesture. The Club benefits in the form of referrals which we all know are one of the strongest methods of marketing.
Cross promotions between merchants also work. Examples are easy to see on a national level with American Express cross promoting with airlines but down at the local level the idea can be adapted too. A men’s retailer can cross promote with a woman’s retailer to provide gift opportunities to their clients and the gift doesn’t compete or hurt their own sales since it is to a different gender.
How can you use a loyalty program in your business? What steps need to take place to implement quickly?
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