Last Christmas Eve, I was surprised to find a package in my mailbox from a large company that I had done quite a bit of business with earlier in the year. Inside were a Christmas tree ornament and a card thanking me for my business, which was hand-signed by a number of staff members. I have no idea how many customers received such thank-you gifts, nor do I know the criteria the company used to decide which customers would receive them.
What I do know is that it made an impression on me. While I would never base a spending decision entirely on an inexpensive gift, if all else is equal between a company and its competition, a small sign that one of the companies truly appreciates my business could tip the scales in their favor.
It’s common business practice to offer free gifts, discounts and other incentives to new customers to get them in the door. It makes sense, and it works. The downside to such offers, however, is that it can leave your best longtime customers feeling unappreciated and left out of a good deal.
For the past decade or so, a growing number of retailers have implemented customer loyalty programs that not only offer incentives like discounts and coupons, but also gather customer contact information and buying habits.
Many of us have a growing number of loyalty program cards in our wallet or key tags attached to our key chains. They’re from supermarkets, drug stores, bookstores, coffee shops, restaurants and department stores. Every time the bar code is scanned, not only are points credited to some future reward, but information is also recorded on what items have been purchased.
Loyalty programs don’t need to be that sophisticated, though. I’ve seen some fairly low-tech methods at farmstands and other types of small retail outlets, including paper cards that get punched or stamped, and wooden “nickels” that can be redeemed for a future purchase when a certain amount is accumulated.
Some simple loyalty programs aren’t based on how much a customer buys, but rather on their willingness to provide an e-mail or mailing address so that you can send them coupons on a regular or intermittent basis.
Loyalty programs are two-way: they convey the company’s loyalty to the customer and foster the customer’s loyalty to the company.
As a consumer, I have mixed feelings about these customer rewards programs. With some of them, it seems like the company is just gathering my buying data time after time and I never see any rewards. Either the dollar threshold before they send a reward is too high, or the reward is in the form of a discount taken automatically at the register that may go unnoticed.
The good ones, however, send a reward often enough to keep me interested and of significant enough value to make it worth my while to redeem it. The best, I think, are the rewards that have a set dollar value rather than a percentage off a purchase. It’s more compelling to think that I could walk in the store with a $10 reward certificate and walk out with a $10 item for free. The reality is – and the retailer knows this – that I will probably find more that I want to buy once I’m in the store and spend more than the $10.
Whether you’re going to provide monthly coupons to hundreds of customers on an e-mail list or year-end gifts to a few of your very best customers, you’ll need to collect some type of information. At the very least, you need contact information. At the higher end of the scale, you need to keep track of how much customers spend and set criteria for who will qualify for recognition.
Recognizing your best customers doesn’t have to be in the form of a program, of course. A simple greeting when they stop by your farmers’ market booth or farmstand or a thank you as they’re leaving goes a long way. Remembering someone’s name, what they like to buy and maybe something personal about them, like their favorite sports team or how many kids they have, is huge. That also requires gathering information, but not through a survey or using technology; it involves talking to people and remembering something about them. It may be old school, but it still works.
The author, a freelance writer, is public affairs specialist for the USDA Natural Resources Conservation Service in Amherst, Mass., and was previously director of communications at the Mass. Dept. of Food & Agriculture. Comment or question? Visit www.farmingforumsite.com and join in the discussions.