Five Loyalty Best Practices That Every Small Business Owner Should Know - MarketWatch

Five Loyalty Best Practices That Every Small Business Owner Should Know - MarketWatch

July 26, 2010, 4:35 a.m. EDT

IRVINE, Calif., Jul 26, 2010 (BUSINESS WIRE) -- You're settling into your seat on JetBlue Airways, and the flight attendant makes an exciting announcement on how to earn rewards points by enrolling in the TrueBlue program. Or, you're at Starbucks and the barista is happy to refill your coffee knowing you're a Green Level Reward member in the My Starbucks Rewards program. Finally, you're at the checkout counter at Best Buy, and the associate redeems your $50.00 Rewards Zone certificate on your current purchase.

It seems every time you turn around a new customer loyalty program emerges in the marketplace. There must be a good reason why loyalty programs have grown in popularity, right? Of course there is. Reason being--customer loyalty programs are the next-generation marketing strategy. It is a viable and measurable marketing tool that small businesses can use to retain their customers and grow their business.

'There is a common thread when it comes to perfecting a loyalty program strategy," explains Roger Brooks, loyalty strategist and author of The Power of Loyalty: 10 Essential Steps to Build a Successful Customer Loyalty Strategy. "If you dig deep into the best practices used by loyalty-leaders such as Starbucks, Best Buy and JetBlue, you'll find there is a 'one-two punch' needed for success. The first punch is to deliver a 'jab,' which is a philosophical transformation in the way loyalty-leaders treat customers. Each loyalty-leader treats their customers like they're made of gold--meaning there is a deep level of respect and courtesy given to customers at every touch point. Having a friendly and polite staff is numero uno. The second punch is a 'straight punch,' which is delivering the proper marketing message and seamless technology to loyalty members. This allows you to identify customers, track spending, motivate behavior, reward performance, and measure results."

Brooks explains that once small businesses are able to effectively combine the one-two punch, they'll be on their way to delivering a "knockout" program.

He also offers the following five loyalty best practices that every business owner should include in their loyalty strategy:

1. Do unto others.

Yes, it's the loyalty program golden rule. Give customers a reason to be loyal, because if you don't, your competition will.

2. Clearly disclose all program benefits and rules (including potential restrictions).

Remember to put all rules out in the open. Dedicate space on the company website, or have printed material available that is easily accessible to website members. Keep your customers well informed.

3. Offer attractive redemption options.

The goal should be to motivate customer behavior. To do so, offer redemption benefits that are relevant and very attractive to your member base--not par for the course.

4. Communicate with customers.

When the customer enrolls in your business' program, ask them to opt-in to your newsletter or promotional e-mail updates. If e-mail is not an option, try communicating through receipt messaging, statement inserts, or other potential touch points such as social networking. You'll see that communicating stimulates activity.

5. Empower employees.

Train your employees to fully embrace the loyalty program as they hold the keys to the loyalty kingdom. Your loyalty members will buy-in if they see your employees have bought-in.

Brooks encourages small businesses to emulate their favorite loyalty-leaders and look to them for assistance while building their program and vetting strategic concepts, and design. In addition, he advises small business owners to commit to embracing loyalty program best practices as a way to set their program apart from the start. Finally, he says that understanding the philosophy, embracing the technology, and employing advanced marketing methods will assist small business owners in carrying out a customer loyalty strategy to dominate their marketplace.

Roger L. Brooks is a respected loyalty strategist with more than 15 years of experience in developing, supporting, and implementing customer loyalty and rewards programs. He is the author of The Power Of Loyalty: 10 Essential Steps to Build a Customer Loyalty Strategy, available from Entrepreneur Press. He has worked with esteemed companies such as Verizon, Sam's Club, and Chase Universal MasterCard, and he currently serves as the vice president of loyalty marketing for ValueCentric Marketing Group, Inc., managing growth for new and existing clients including GE Capital, SAKS FIFTH AVENUE and Bank of Montreal.

SOURCE: Entrepreneur Press

Entrepreneur Press
Jillian McTigue
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