Know-How Exchange : Advertising/PR

Dear Tatiana

since there is not enough info on what type of business you are in i would assume several possibilities.

1) You have to determine HOW are you going to determine which customers are loyal (METRO - more you spend more loyal you are to them - give more discounts for loyal customers; M-TEL the more you are with this company the more you are to them - special process for points awarded only loyal customers can receive points)
2) what data do you have in your data bank - name address years you are doing business with that person. if you have enough info you can approach them by sending loyalty card over mail
3) determine not only the loyalty system but also you have to think how would you encourage them through this programme to do even more business with you. Meaning that this system is not only for sending christmas gifts because someone has been with you for some time but give them something extra in order for them to come back again and again
4) how much would it cost for you to implement it - even though this is an accountants job you must have it in mind
5) monitor the success - see how sales, profit whatever numbers you need to compare how are you doing before and after - you need to report to someone i guess people like numbers :)

Hope that helps
TM

Hi Tatiana,

In addition to the detailed response above, I would also suggest that you seriously consider doing some primary market research among your target market concerning this program before it is launched. I have worked with companies who put a lot of money in loyalty programs and their rollouts, and do market research after the fact. In some cases, the target market can be very put off by loyalty programs and rather than building loyalty, then have engendered customer dissatisfaction. This doesn't mean that all loyalty programs are problematic or bad ideas - only that you should research the progam among your target first. They can provide you with valuable insights concerning program structure, incentives that have real value, and how to promote it.

Good luck!

- Joy

hey,

to create a loyalty program u need to look at something called the RFM model. this is nothing but looking at the
- Recency of the customer visit (when was the customer's last visit to the store)
- the Frequency of the customer's visit (how often does he visit the store in a particular period of time identifed by u, say a month)
- the Monetary value that the customer contributes on an average to the store ( how much does he spend when he is in the store).

All the customers cannot be treated alike and u will have to make slabs , giving the most preference to that customer who comes the most to your store, to that customer who probably doesnt come that often but lands up spending the most every time he comes.

create a little grid identifying the RFM of each of the customers and this will give u a clearer picture of the types of customers that are coming to ur store.

hope this helps,
rgds,
miloni