Tuesday, 20 August 2013

Rules to consider while designing your customer retention programs

Most of the times, we tend to forget the key elements while designing a retail brand loyalty program. We consider the cost, merchandise but tend to miss out on the key elements of a successful loyalty program. We may think, discounts and offers are the only way of engaging and holding your customers. 

Rather discounting and offers may give you a top line revenue for non-moving items but dilutes your brand value over a period of time, as, you first develop a taste towards discounting and offers and then you discontinue the same for the new product in the same product category. This, in fact, kills your brand perception to an extent. Consider these points before finalizing your retail offers:

1.      The linkage with the customers- consider a continuity in the consumer connect initiative of your brand with your customers. Rather, consider interaction over sale or transaction as this helps you building the linkage.

2.      Avoid short-term discounting: This kills your brand perception. For example a leading retailer sells the products at MRP during the season and during the non-moving product scenario starts discounting it by 40% to 60%- this kills your brand value as the customer buys a product, irrespective of the stock or product newness, starts believing that you offer discounts through your mass selling and holds the purchase the very next time. Rather, reduce your pricing from the start to make it available in the same price band.

3.     Multichannel approach to sell- Distress sales still can happen though but through a different retail point. This helps you in maintaining your Brand image with consistency.

4.       User your social connect to interact with your customer through all possible means: Use all possible means to reach your customers. But you should always avoid brand push as this further dilutes your brand image.

5.       Rewarding of the customers should be strategic to accomplish an everlasting relationship with the customer, not to push product or sell more. Quality, service and Value scores higher than the sale for a long term brand approach

6.       Reduce the frequency of interaction to make it like real-time interaction

7.       Give your customers a compelling reason to associate with your brand- not  let it sound like a compelling sell.

8.    Believe in data while interacting with the customers: consider a case when a tele-caller from your telecom operator calls you to remind for a bill which is paid by you. This happens as the telecom operator has out-sourced the collection process. Maintain your brand image  by making the data available with your partners in such cases to show that you are a brand and you know everything about your customers’ purchasing or billing trends. Never project that you are dependable on individual(s) to service the customers. We have latest CRM tools helping us to restrict third parties to view the personal data but the process data still can be made available and if you don’t trust your partner, may be you have selected a wrong partner.

9.    Know your customers: Most of the times despite of having all the data available, we tend to ignore the data integration between departments. You should have all the relevant information at a place while making the strategies for your brand marketing. The generic data is of no use and don’t expect a specific response out of a generic activity.

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