Playing games with customers, building customer loyalty

Updated: 7 days ago




Author: Lenka Dzadonova

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Date of Publication: 22/10/2022





What type of business do you support? Why do you prefer one company instead of another and how are you choosing the best product or service? What about getting something for free and getting an extra discount? All of us love it right? In a world full of information and advertisements, building long term relationships is more important than ever. But how can we get all these loyal customers? How can we attract customers' attention?


The answer is playing games in many cases. All of us have that small child inside who loves playing. I miss one more stamp and I will get a present or I’m collecting points there because of the discount later. We love collecting and playing with the price at the end. So, in marketing these games are called loyalty programs.


The loyalty programs

The loyalty program is a marketing tool designed to reward existing customers and ensure their loyalty. As a result, you gain the trust of future customers. So, the goal of the loyalty program is to induce a customer who once bought or used the company's services. In this way, they become a permanent and loyal customer or stay with a certain product for a longer period. We have a lot of different types of these loyalty games. Yet based on your business you have to think what is the best for your specific business.


Types of loyalty programs

  • Gift loyalty programs – free gifts and samples.

  • Discount loyalty programs – discount for the next purchase, discounted offers, vouchers for purchase of goods at a certain price, products at reduced prices, premiums.

  • Discount loyalty programs – a discount for the purchase of goods of a certain value.

  • Combined loyalty programs – The consumer receives a loyalty card that puts them in the loyalty club. Thus they become loyal customers. In particular, points are collected on this card. Hence, the consumer can choose whether to take a gift for the saved points, use up the discount, or use the points for another purchase. This is the most frequently used form. But what are the advantages of giving something for free or giving extra discounts?

There are a lot of benefits of loyalty programs such as:

  • Strengthening good relations with existing customers.

  • Building trust and a permanent business relationship with customers.

  • Acquisition of new customers who otherwise show no interest in products or services.

  • Increasing the consumer's motivation to buy and thereby supporting the sale of products.

  • Strengthening the market position.

  • Gaining a competitive advantage.

  • At the end when you look at the market everyone is using some type of loyalty programs.. So if you don’t have any of it, your competitors are already one step in front of you. In fact, it’s so common and so popular. Just think about your purse and all those loyalty discount cards. I think we all know them. Actually, you’re playing and collecting as well. However, it looks easy but there are a lot of things that we should focus on.

Not all customers are equal

Important part of loyalty programs is also understanding of the fact that not every customer is spending the same amount of money. So different types of customers should have different advantages.Therefore, customers shouldn’t be treated equally in this case. If you reward your premium VIP customers with perks and new program members, existing loyal customers can feel unappreciated. Many brands divide their loyalty programs into more groups and levels with different advantages for each group, from new customers to VIP. Some even charge annual membership fees for the highest level, but offer many more benefits to make those customers feel valued.


Understanding that not customers are equal is important.


But there is much more!

Maintaining good loyal customers isn’t only about good strategy and loyalty programs but also about factors which need to be optimised.



For example:

  • Convenience - Customers stay loyal when they have easy access to products and services.

  • Availability - If the product is not available, customers will switch to another provider. Companies must have visibility into supply chains and minimum inventory levels for high-volume and high-margin products.

  • Alignment with social causes - In many privileged demographics, social causes can play a role in consumer preferences and loyalty. Such causes are from the environment to diversity, equity and inclusion. These markets are less value and price sensitive and more cause driven. So, organisations should respond to the latest trends to gain positive customer sentiment.



To sum up, good customers are your biggest asset and it's important to build relationships with them. Doing so, you motivate them to come back. Therefore, you have to create a good way, how they can spend their money and enjoy it at the same time. In addition, it's important to think about all different types of customers and give everyone something. When you want to be better than your competitors, you need to have your loyalty program. Just pay attention and enjoy the creation of this game as well. Enjoy it, do it with love and focus on your customers' needs. In this way, you will get the real profit and loyal people who support your idea.


 

Reference List:

  • PALATKOVÁ, Monika. Management cestovních kanceláří a agentur. Praha: Grada, 2013. 217 s. ISBN 978-80-247-3751-5. (Česky) [dále jen PALATKOVÁ, Monika].

  • MATULA, Vladimír. Věrnostní programy (loyality programs) [online].[dále jen MATULA, Vladimír].

  • Brad Davis - October 13, 2019, https://www.stampme.com/blog/10-biggest-loyalty-program-mistakes

  • Wang, R. "Ray". "Long-Term Customer Loyalty Is Long Gone: Having the best product or service is not enough; loyalty pros need to focus on other factors." CRM Magazine, vol. 25, no. 8, 2021,. [online]

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