For today’s consumer, loyalty programs are a given. When we use our credit cards, when we fly, when we frequent a particular chain of hotels, we expect to collect points toward a reward some time in the future.
This May will mark the 30th anniversary of the first loyalty program in the travel industry: American Airlines AAdvantage, the original frequent flyer program. This gives us an opportunity to think about loyalty initiatives and how they can help us build relationships with our clients. (Hint: there’s more to it than simply rewarding repeat customers.)
1. Customer retention: This sort of goes without saying. Rewarding your customers for coming back is an effective way of keeping them around.
2. Customer Relationship Management (CRM): Loyalty programs allow you to implement broad strategies that can integrate large amounts of information and help you know your clients more intelligently.
Most agencies do well with the former, but how are you doing with the latter?
If you don’t have an effective CRM strategy, it’s worth taking the time to improve. Efficient use of CRM data gives your business two huge advantages in the long run.
Firstly, it helps you to quantify your clients. For instance, how quickly and easily can your agents quantify past information about customers, such as the history of past sales? A good CRM strategy puts this information at an agent’s fingertips.
Secondly, and most importantly, successful CRMs help businesses market themselves more intelligently. For example, let’s say one of your clients is a family of 4. The parents are in their 30s, and the kids are 5 and 7. You have stored in your CRM that they recently purchased a Walt Disney (don’t sue us!) vacation package. Well and good. But ten years from now, based on the change in their ages, will your CRM be able to market more appropriate vacation options to them?
If the answer is “yes”, it will foster greater and longer-lasting customer relationships than any reward program can on its own.
Sadly, superefficient CRMs don’t grow on trees, but this is a case where the old adage proves true: the cost of keeping a client is less than the cost of attracting a new one.