Customer Experience specialist Ian Golding, author of Customer What: The Honest and Practical Guide to Customer Experience, writes for Customer Experience Magazine offering expert insight to help businesses improve their CX offering.
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As a smaller business, should I consider customer loyalty schemes as part of my Customer Experience Strategy? Can they add value to my business, or is it common for customers to fail to engage with them?
I have always believed that if done well, customer loyalty schemes can be extremely effective as a way of maintaining engagement with those who interact with your products and services.
By “if done well”, I am suggesting that some are not!
Typically, the domain of large corporations in the travel, hospitality, and retail industries (although not exclusively), if the ‘effort’ is effortless and the ‘reward’ is rewarding, then a loyalty scheme could be a differentiating factor in the mind of your customer.
Personally, as a frequent traveller I will always look to fly or stay with an airline or hotel that will provide me with a benefit for using them regularly. To me, the reward of ‘free’ flights or hotel stays is a worthwhile incentive to keep using certain brands.
However, the loyalty scheme alone must only be perceived as just one touchpoint in the customer journey – if other things in the journey go wrong, I will gladly give up my perceived ‘benefits’ and take my business elsewhere.
There is absolutely no reason why the principle of a loyalty scheme should not be applied by smaller organisations – as long as it is sincere and commercially viable and a way of driving differentiation.
However, there is no sense putting a loyalty scheme in place if it will run your bottom line into the ground! Also, do not forget the ‘sincerity’ part of my statement. If a loyalty scheme is perceived by your customers as a way to try to ‘sell them more’ or spam them, then it may be better not doing it in the first place.