Want to Sell More? Try Customer Loyalty Programs
Last week, FEI marketing whiz Marka gave savvy salesperson Zoot a tip for increasing FEI’s share of customer (SOC). This week, Marka offers Zoot one last piece of advice for selling more to customers. Remember, fire = print.
Marka and Zoot went toga shopping at the mall one Saturday afternoon. As they headed out of Togas Aplenty with bags in hand, Zoot stopped Marka.
“I’m craving froyo,” Zoot said. “Let’s stop at Grape Leaf Frozen Yogurt.”
“That’s on the other side of the mall!” Marka said. “GrapeBerry’s right next door.”
Zoot brandished a ticket. “But I’m only two purchases away from getting a free froyo at Grape Leaf!”
Marka raised her golden eyebrows. “Clearly, Grape Leaf’s Customer Loyalty Program is working.”
“Should we do start one at FEI?” Zoot asked.
“Hades yes!” Marka said. “According to Fire Business magazine, it costs a company about five to 10 times more to acquire a new customer than it does to sell to an existing one. On average, current customers also spend 67 percent more than new ones. Bottom line: we should be doing everything we can to grow our share of customer. And loyalty programs that reward frequent customers are a vital arrow in our quiver.”
“What would such a program be like?” Zoot asked.
“Let’s keep it simple,” Marka suggested. “We’ll create a system in which customers receive points for every purchase—say one point for every $100 Drachmas spent. Customers get rewards and perks based on the points they accumulate.”
“What kind of rewards?” Zoot asked. “Free froyo?”
Marka rolled her eyes. Zoot wasn’t quite getting the picture. “The point of a customer loyalty program is to get more business from existing customers. Giving customers free froyo is a nice token gesture. But will it really persuade them to buy more torches, matches and kilns? Instead let’s offer benefits to frequent customers that make it more attractive for them to work with us.”