Building a Loyalty Program

In the CRM course I give in the Istanbul Bilgi University MBA program, when the topic is Loyalty programs, I assign homework to prepare a loyalty program suitable for the sector they are interested in.

“Why are you loyal to your hairdresser? Why do you always go for the same when there are dozens of cheaper or more skillful hairdressers (barbers). He/she does not delay payment. She/he does not say, “If you cut your hair twice, your favorite trim is free.” Don’t design a loyalty program without thinking about the reason why you always go to the same barber. ” I say.

In the lesson, various groups are formed right at the beginning of the year. Each group handles an industry or company and examines all CRM (customer definition, data warehouse, process design, segmentation, campaign management, etc.) issues according to that company or industry. If we find time, groups present their suggestions in class. Thus, everyone in the class gets an idea of ​​CRM applications in many industries.

This time, while giving the loyalty homework, “No discount, installment or payment postponement proposal will be made. Apart from these, you will develop a loyalty program” I said. I also reminded some examples that I liked and published in Turkish. Although I told that “When the customer comes to bribe, he/she leaves you when someone gives the better. You will not gain loyalty, you buy a visit.“… unfortunately it didn’t matter much.  They did not write discounts, installments and deferral of payment, but they could not find a solution other than making proposals based on bribery such as “points, gifts equal to% of turnover, additional services to the high purchaser“.

I tried to explain in class that they put the customer in the place of a donkey when they said “to offer carrots”..  Everyone focuses on making more favors to their customers to whom they sell a lot.

Then they cannot get rid of the “points, discounts, favors, gifts” cycle. They hardly ever think of…

• enabling infrequent customers to come more frequently,
• encouraging low-purchasing customers to buy more,
• directing them to cross-selling and enabling the customer to try a product / service that has not yet been purchased,
• providing information or content that the customer needs,

… thus increasing the lifetime value of the customer .

I am not blaming MBA participants. I see that many people who have been in business for years do not have different suggestions.

However, if you put yourself in the shoes of a customer… If you think about why you frequently go to that cafeteria, find the reason for buying your white goods from that shop, question why you prefer that dietician, examine the reason why you go that hotel not someone else, if you only understand the reason for trusting that mechanic … maybe you will have more consistent suggestions to increase loyalty of customers.

Etiketler: bonus points, bribe, customer, customer experience, discount, installment, İstanbul Bilgi Üniversitesi, life time value, loyalty, MBA, offer carrot, private label cards

Kategori: CRM