This article is contributed by Dittman Incentive Marketing (www.dittmanincentives.com).
In today’s competitive marketplace, the race to increase profits by cultivating customer loyalty is going at full speed. Customer retention is not only a cost-effective and profitable strategy, it is a necessity for businesses wanting to stay ahead of the pack.
As consumers are spending less thanks to soaring fuel and food costs, companies are more reliant than ever on the loyalty of a dedicated customer base to maintain a competitive advantage. Following the Pareto Principle, 80% of your sales come from 20% of your customers, and in a recession the numbers are closer to 95% and 5%, says Ajit Maira, senior vice president of the Information Technology Services Marketing Association. Since these returning customers cost less to reach, are less vulnerable to ploys from the competition and buy more over time, companies need to give customers an incentive not to go elsewhere for the same product or service.
One of the most successful ways to achieve this cost-effective retention is through the use of customer loyalty reward programs. By rewarding the ongoing purchase of product or services, companies achieve long-term relationships with customers. With a variety of loyalty programs available to companies, the key is discovering what works best for your needs and goals.
Build a Strong Foundation
Successful loyalty reward programs are built from a working knowledge of your customer base. To create the foundation, you must first identify the type of customers you want to retain and understand the types of products and services they value most. This information can then be used to determine the kinds of rewards programs that will appeal to them.
To obtain this level of understanding about your customers, it’s vital to conduct targeted research. In an article in the Harvard Business Review, authors Thomas O. Jones and W. Earl Sasser, Jr., suggest utilizing a combination of customer satisfaction surveys, customer feedback and market research. Together, these three tools can help businesses better grasp the wants and needs of the customer to build stronger brand loyalty.
Establish Winning Relationships
While good service is the key to earning customers, it’s not enough to maintain their long-term loyalty. In his book How to Win Customers & Keep Them for Life, author Michael LeBoeuf states, “Smart companies go the extra mile for the customer and show them just how dedicated they are to making sure that they feel good about doing business with them.”
To prove to your customers that your company is going that extra mile, you must show them you are doing just that on a regular basis. For example, Ben McConnell, co-author of Creating Customer Evangelists: How Loyal Customer Become a Volunteer Sales Force, suggests showing customers they are valued by inviting them to lend their opinions on new products and ideas, or invite them to your company’s conferences or meetings. These offers to participate in your company’s operations will promote a feeling of value and inclusion.
It’s also vital to maintain open lines of communication and always treat customers with courtesy. Loyalty is established over time, and customers need to believe that your company values them.
Give Them Incentives
Giving customers incentives to let their purchases be tracked allows you to base loyalty programs on very specific requests and needs. The incentives can help your business to increase customer traffic and sales, and most importantly—allow you to measure the effectiveness of the incentive.
The incentives can vary, and can include immediate rewards like free long-distance phone calls for hotel guests, targeted deals such as exclusive “friends and family” sales events, valuable membership cards offering extras like bonus spending points. Other options are also successful, like manufacturer rewards for items such as brand merchandise and discounts, and point-earning partnerships between retailers and online shopping sites.
Offering these loyalty incentives, also know as frequency marketing, allows your business to build a database of loyal customers that you can target again and again, and with precise tracking.
Follow Through
To reap the rewards of a customer loyalty programs, it is vital to maintain a consistent approach and follow through with your strategy. By staying the course with targeted research, communication and incentives, you can establish a loyal customer base yielding great results.
It’s important to remember that customer loyalty can’t be established overnight, but the investment required to create a satisfied customer is always worth the effort. Establishing long-lasting, loyal relationships with clients should not be an afterthought in the current market; it’s now a fundamental necessity on the road to achieving higher profits and business longevity.
About Dittman Incentive Marketing
This article was provided by Dittman Incentive Marketing (www.dittmanincentives.com), a quality leader in the field of people performance improvement. Since 1976, Dittman has helped companies achieve critical corporate goals via original, one-of-a-kind customer loyalty programs and motivation programs that inspire a sales force to sell more and customers to buy more.
R.L. Fielding Bio
R.L. Fielding is a freelance writer who has written on a wide variety of topics, with special expertise in the education, pharmaceutical and healthcare, financial service and manufacturing industries.
Category: People & Relationships
While research shows that most people believe they can’t be sold, the fact is those same people can indeed be persuaded if they don’t recognize that a sales technique is being used.
The trick lies in the different persuasive strategies used then and now. Lets use a car salesman this time since they top the list as the people you absolutely cannot trust in a poll.
Then: They go on downloading information in you, telling you EVERYTHING you need to know AND don’t need to know. Basically, its like taking a shotgun with pellets in it, hoping that one of them will hit the target. This doesn’t work anymore!
The following are strategies for you to adopt as you attempt to persuade your audience, be it one or many.
1. Aiming at the Target
Have you been in a situation where a salesman or saleswoman was trying to sell you something by giving you the 4-1-1 of what he or she is selling while you absolutely couldn’t wait to get away from the guy? That he or she was boring you nuts with all the information?
You felt like running away as soon as he turns his head because he never found out what was IMPORTANT to YOU.
Ask a simple question : “What’s most important to you when you buy a car? ”
“What’s most important to you when you enroll your kids to a programme? ”
“What most important to you when you look for a life partner…( ok you get it by now don’t you? ) ”
This simple question is what gets you the most answers. So for example, if I’m going to go buy a car, what’s important to me is the price.
So if you’re going to sell me a car, you should immediately address my pricing concerns and not go rambling on how energy-efficient and how many awards the car has won. This saves your breath and of course, time spent.
2. Never start your questions with ” WHY? “
Not only is it annoying but you get only excuses.
Lets use an example: If your kid comes back from school with his report card dominated with D’s and E’s and (God Forbid, F’s ), You’ll probably be in a rage and ask ..”WHY did you get D’s and E’s ?? ”
And the answer (or rather, excuse) that you’re going to get is:
“My teacher ate my test paper.”
“My teacher doesn’t really like me.”
“The kids bully me if I get A’s.”
So how can you ask the same question but get solutions instead?
Start your questions with “What” or “How”. These 2 words empowers action in people. You’re still asking the same question, but you shift its mode and then you start to get changes!
3. Use STORIES to convey your message.
Its important to highlight before I continue with how we can use stories that people tend to be too obvious when they use their stories. As a result, they shift back into a sales mode.
Most people cannot come up with a story on the fly. Even Paul suggested practice and fine-tuning our stories to ensure an impactful message and one that really sinks into the human psyche. Remember? Stories, like humour is a process. Your stories are not going to come out fantastic the first time you tell them. Hence, you must be willing to let your stories develop over time.
Eric Feng is the go-to guy if you want to learn how to impress your investors and customers through public speaking. For more tips and tactics that you can use immediately in your next presentation, visit The Public Speaking Blog.
While some guys lose their heads when faced with a tough business environment others stay cool, survive and prosper.
OK,Ok, the sky is falling so stop running around and instead use that energy and money to survive and to improve on how things are done and on how to prosper from the coming upturn…yes in time the sky will right itself.
Have you ever seen any business consultant’s card that didn’t claim that they could lead you to the pot of gold buried under the employees’ parking lot? But here’s where it gets funny…they can.
In a book he wrote in the early 60s…1960s not 1860s…Bucky Fuller writes that humans adapt quickly to change and soon space out the past. Bucky didn’t write this but I think that humans have limited RAM, and that many business managers are overloading the RAM they have …so they stop thinking about things and fall into habits and patterns…no thinking required. The name of the book? Spaceship Earth.
And to further muddy the water, humans don’t operate at their highest potential when stressed.
I’m tempted to start pointing out specific things a business should do during a hard economic time, but I’ve done that in other articles. This article is about new training and new thinking. The following is from an article I wrote during the last economic downturn.
A sales vice president of an international company had referred me to his region’s CFO. He encouraged me to contact this woman and explain the scope of my consulting and training services.
After leaving three messages over a two week period, I got a call from the regional A/R Manager, the CFO’s subordinate. I started to explain what I do when the man cut me off. “We just had the very prestigious firm from the U.K., Robem, Blind & Howe, do an evaluation of our business functions and with the exception of a few minor items, they validated our processes” .
On hearing the word “validation” the picture that comes to my mind is finding the right guy to stamp your parking ticket. Or maybe, if you’re lucky enough to still have her, calling your Mom for some kind words and reassurance. But to pay a consultant to come in and pat you on the back, or wherever, and tell you you’re doing good…never.
School Ties and the Intellectual Gene Pool
Keeping my thoughts to myself I said to the regional A/R guy, “That’s great, it’s always a good idea for a company to have an outsider come in and take a fresh look at things.” I then asked how my firm could participate in providing them with their next evaluation. “Oh no, we’re having R.B. & H. back again.” , said the regional A/R guy. After a few more minutes of conversation it was clear to me that I was wasting my time. You see, I learned from the A/R guy that his boss, the regional CFO used to work at R.B.& H. and that she was not interested in working with any other consulting or training firm.
When everyone sitting around the conference table went to the same school, has a common life experience and understanding of things; you’re not going to get a lot of new ideas, solutions and improvements. In fact, this kind of corporate inbreeding will limit the intellectual gene pool resulting in more of the same thinking. “Insanity is doing the same thing and expecting different results.”
We Don’t Know What We Don’t Know
Mohandas K. Gandhi was once accused of having said something that conflicted with a prior statement. His response was something like, “I will not waste my time apologizing for what I’ve said in the past. I can only seek to be faithful to the truth as it reveals itself to me.” We don’t know what we don’t know.
No matter how smart a manager or management team , there’s no way he/she/they know it all. Sometimes the true value of having an outsider review how things are done is that they ask dumb questions, because they don’t know how things are done. Hiring a consultant who knows how you do things limits the potential payback. this excerpt is from an article titled “Corporate Inbreeding Hurts Profit”
An other thing to consider is how you spend the training budget, and if you don’t have a training budget get one. How to spend the money? Try something new like video training, or teletraining. I still think that the best training takes place face to face but airfares are, excuse the pun, going sky high. And not having to spend time traveling reduces the cost of the training and wear and tear on the trainer. And some of those guys are not as young as they use to be.
Recently a man in Dallas asked if I remembered him , that we had met 17 years before. And then he went on to say, “When we met I had hair and your hair had color.” And yes I did remember him…thanks for asking.
By now some of you may think that being that I’m a business trainer and speaker myself I have a vested interest in companies not cutting their training budget and you’d be right…but it’s still true.
When things slow down it’s time to prune and prepare for the next season. And it’s time to see some new faces around the table.
Abe WalkingBear Sanchez is an International Speaker / Trainer / Consultant on the subject of cash flow / sales enhancement and business knowledge organization and use. Founder and President of www.armg-usa.com, WalkingBear has authored hundreds of business articles, has worked with numerous companies in a wide range of industries since 1982 and has spoken at many venues including the Shakespeare Globe Theater in London.
For four years I did a conference where I invited business owners to tell us what they right in their business. We picked the top 12 stories and these successful business owners were given an opportunity to tell their story to up to 300 conference attendees.
While promoting the last conference, I sent faxed invitations to business owners who I thought would enjoy the positive press and would be interested in promoting their company to 300 people.
Several asked that I remove them from the list and I did so.
Four of them engaged a lawyer and filed a law suit.
Apparently there is a law that says you cannot fax someone unless you have written permission. This puzzled me especially since the names and fax numbers came from a public list I acquired from Reference USA.
The law states you cannot sell a product or service via fax without written permission (there is more but that is the highlight).
Since the fax I sent invited the business owner to a networking event where we could talk with them about their story and the role the conference would play in helping them grow their business, we were not in violation of the law.
The Cleveland based lawyer filed the lawsuit for a Cleveland based heating and air conditioning company. Apparently this lawyer files lawsuits when people receive an unwanted fax. As I talked with people about this lawsuit, I learned I was not the only one he has extorted money from. His reputation is less than stellar.
I am sure this lawsuit was not the intent of the fax law and our law makers really should fix this law to prevent this abuse.
According to my lawyer, the lawsuit is “legalized extortion” but his suggested was to settle the suit because of the cost of going to court and the difficulty in counter-suing.
It cost a lot of money and time to run this conference to promote good news in NEO. It cost a lot of money in legal fees to settle this law suit.
It is hard to plead “not guilty” when I clearly broke the law – even though I did not know the law existed. Sometimes we try to do something positive and it backfires. The backfire is what I call the law of unintended consequences.
There are two lessons to be learned: 1. Continue trying to do good but have a good lawyer. If you need a good lawyer let me know (email only please), I have more experience than I care to admit and I would be willing to share the names of the people who helped me.
Asking a question to your lawyer before is always easier that dealing with a suit after the fact. 2. It doesn’t say much about our business owners if they cannot pick up the phone and ask to be taken of the list. To file a stupid and frivolous lawsuit to raise money is the ultimate in stupidity. The business owners who filed suit should be taken to the woodshed. It took a while to get my PMA (Positive Mental Attitude) back but I did. The essence of the second lesson is to trust your lawyer and stop worrying. Worrying does no good. All the sleep I lost did not change the outcome of the suit. Not counting legal fees the total settlement was for $750.
I will not reveal this company in this post and I suspect he has more problems that receiving a fax he does not want. He apparently has little regard for his business or his business reputation to get involved in this nonsense. The other four who had their name on this lawsuit did not do their business a favor.
I was bummed for a while about this law suit. I am over it now but I am saddened that our business community has to waste time, energy and money over something this stupid.
Check out the long term consequences with a group of trusted advisors. After all, many minds and many experiences are far more effective in the decision making process than any single mind or experience.
Our friend at YoungEntrepreneur.com, Evan Carmichael, alerted us to a really insightful post written by Anthony Mora for his weekly Entrepreneur University feature. Its about having 20 ways to have a successful Media Interview.
Review the following checklist:
1) Review the two or three primary points that you want to get across during the interview.
2) Make sure you’ve checked yourself in a mirror before you go on camera. Is your hair in place? Is your tie crooked? Is your lipstick smeared? Give yourself the basic once-over.
3) Remember, you don’t have to force the information; weave your points into the interview. If you spend your time forcing an issue, it will come out sounding strained and stilted.
4) Relax. You are there to have a conversation. Well, at least you want it to look like a conversation.
5) No slouching. Sit erect.
6) Focus on the interviewer. The camera and crew is part of the furniture as far as you’re concerned.
7) Start off with your most important information. Interviews can be very short. If you don’t lead with what’s important, you may have missed your chance.
8) Breathe. People have a tendency to hold their breath when nervous, which only creates more anxiety. Remember to breathe.
9) Smile. I’ve seen more media opportunities ruined by people who have refused to smile during their interviews. Looking grave does not make you appear more profound, it makes you look dull and somber.
10) Listen. Don’t anticipate questions. Don’t think that you know what the interviewer is asking. Wait until the question is asked and then respond.
Learn more for the rest of the 10 ways now at YoungEntrepreneur.com’s article: 20 Ways To A Successful Media Interview – Entrepreneur University.