The Customer Loyalty Solution : What Works (and What Doesnt) in Customer Loyalty Programs

Overview

The best response to a promotion is a sale. Typically, you want customers to visit a store and buy your product or service. In the absence of this fruitful response, until recently there were four other ways in which customers could respond to a promotion. They could

• Call on the phone

• Send a letter through the mail

• Send a fax

• Send an email

These four methods are still used for both consumer promotions and business-to-business marketing. They work well, and they will continue to be an important part of direct marketing. But all four have a drawback: They are moderately expensive two-step procedures that require additional effort to complete the sale.

In the last few years, Web response has been developed. It has many advantages over these four methods. With Web response, the customer goes to a Web site, gets more information about the product, and places the order personally. This method swamps all the others in terms of

• Reduction in fulfillment cost

• Capture of data along with the sale

• Immediacy of response information

• Personalization and speed of response

• Accuracy of the data captured

Here is how the process works. In the promotional message, the customer is given the name of a Web site to contact. If the promotion is an email, the Web site address can be contained in the message itself. All the user has to do is to click where it says click here, and she jumps to the site automatically. Once she arrives at the Web site, if the process has been set up correctly, she sees a greeting: “Welcome, Susan” or “Welcome back, Susan.” She also finds information about the product that was featured in the promotion. At that point, she can

• Buy the product directly on the site or make a reservation (rather than a sale)

• Get the names and addresses of local dealers who sell the product

• Talk directly to a local dealer

• Talk to a live operator

• Get detailed answers to her questions about the product or service

• Answer some survey questions designed to help her make a decision about which product is best for her needs

• Complete a personal profile that provides her preferences and some demographics

• Provide her address, email name, and credit card number

• Send messages to friends about the product or service

• Learn about other products sold by the supplier and order them

• Provide permission for further correspondence

• In fact, in many ways, her visit to the site is better than a visit to a local store. If the site is set up properly, it provides the supplier with a wealth of information about the prospect or customer that would be difficult or impossible to get during a store visit or with any of the other four response methods except the phone call.