Building an Effective Loyalty Program

Brought to you by Genesis Direct

In today’s world, customers are continuously surrounded by choice. With the internet and ease of price shopping, both consumers and businesses are becoming increasingly price sensitive to find the best deals. How does a company or brand with products and/or services win in this competitive landscape? The answer is by creating loyalty at the product, service and brand level. This means that when a customer is presented with many different options, their number one preference is always your brand, product or service. A loyal customer is one that is easier to retain, has a standing relationship with a brand or business and is more likely to be an advocate through word of mouth.

Why is Loyalty Important?

A loyal customer base is a company’s greatest asset. However, companies often disregard the importance of loyalty programs and instead invest in acquisition of new customers – which can lead to a costly mistake. Cultivating and nurturing your loyal customer base is a vital component in getting the most out of your marketing budget.

A good example of failing to value their loyal customer base is the Nordstrom experience. In an earnings call in June 2019, the company reported weaker than forecasted sales. The reason – company co-president Erik Nordstrom attributed the poor performance to the fact that his company stopped sending rewards coupons to loyal customers via a direct mail campaign. Instead, they substituted their traditional direct mail approach with an online strategy, hoping to target and reach customers faster. The numbers revealed that replacing a proven loyalty-driving initiative with a cheaper, less effective digital strategy just didn’t pack the same punch. It was clear that their customers preferred a mailed coupon rather than in their email inbox, much of which was obviously mistaken for SPAM.

How to Create Customer Loyalty?

Frequency + Quality = Customer Loyalty

To achieve loyalty, reach out frequently to your customers with a meaningful, value-driven, high quality touch. In the Nordstrom example, we saw how a high frequency, perceived low quality approach (through their digital strategy) hurt their recurring sales from loyal customers. Conversely, high quality interactions with customers that only happen once a year (low frequency) may also impact sales by not ringing the cash register as often as needed. The perfect combination to achieve loyalty on a consistent basis is high quality and frequent touch points between customers and businesses.

So how do you achieve a high quality, multi-touch campaign with frequent communication to your customer base? The answer is direct mail. Direct mail is the perfect medium for driving loyalty, engaging customers and increasing sales. As seen from the Nordstrom example, neglecting this crucial program led to a pullback in their sales performance. It’s imperative for a business to recognize how important direct mail can be in a digital age. In a time when customers find themselves drowning in options, direct mail cuts through the clutter.

About Genesis Direct

The key to better direct marketing and relationship building is getting the most relevant message to the right people, at the right time. Our integrated variable data printing process does just that. By applying the latest technologies, Genesis Direct is equipped to better understand and more effectively target customers and prospects by spotting trends and cross-referencing behavior patterns. Then, putting this knowledge to use by crafting truly customized one-to-one direct marketing campaigns that inspire action, we reach these targets more meaningfully and more profitably. Waste is minimized and spot-on insights replace CPM guesswork as relevance becomes the key. With our help, you will reach a willing audience that’s most inclined to engage in your offer. For nearly 25 years, we’ve been all about creating better relationships. 

For a free consultation and to learn how we can help your business grow, call or email our Senior Account Executive, Mike McNally at (813) 610-5931, [email protected], or visit us online today.