You know it costs far more time and money to acquire a new customer than to retain an existing customer. You also know that a customer loyalty programme could enhance the customer experience, company brand and drive repeat transactions. But as a marketeer, how do you get your CEO and Board, to think about customer loyalty and a formalised programme? To start with, it’s worth recognising that CEOs will inevitably have different priorities and preoccupations and you need to couch the key facts so that they address the preoccupations of CEOs, Financial Directors … and other colleagues.
Here are some things you may find useful to keep in mind;
1. Assemble a due diligence pack of useful information. Include widely recognised data about the cost comparison of keeping customers loyal verses new customer acquisition. Include a list of companies with loyalty programmes and those in similar sectors / industries. If possible, talk to counterparts in some of these companies. As a starting point;
2. Don’t confuse customer loyalty with sales promotion / retention. Customer loyalty programmes are about planning and securing growth – changing and positively influencing the propensity and value of purchase from a customer or a basket of like-minded customers. Retention programmes are about preserving the customer and often involve discounts or rebates.
3. Try seeing things from alternative perspectives common among colleagues
|Financial Director perspective
|Marketing Manager perspective
Colleagues will view sales performance, financial results, marketing and business development support differently – and by recognising their priorities, you can more effectively build a case that addresses their concerns / interests first time.
4. Plan meticulously
A good plan will include the following basics;
- What are the company level objectives (starting point, intended impact, KPIs to indicate if you are hitting the desired objectives)
- Desired impact on number of active customers, overall sales and profit
- Segment your data by customer type (lapsed, occasional, low spender vs average, high spender…) and calculate what would happen if just 10% of groups at the bottom hit target
- Demonstrate that you have carefully researched loyalty programme strategy and potential ROI
- Incorporate case studies and relevant benchmarks
- Work with colleagues from different departments (Operations, Stock Control, Sales, Finance etc) to ensure that key areas of business are considered
- Be clear about whether you have one (Open) programme or a tiered (Closed) programme segmented by type / interest of customer and how it will work and how ROI will be judged
- Be upfront about how reporting will look, what it will cover and how financial risk (programme expenditure) can be managed and capped
- Be prepared to be flexible to meet different stakeholder needs
- Keep it simple (you can always add layers after initial ROI is recognised)