Eight types of loyalty programs that work. Loyalty programs for corporate clients Loyalty programs for corporate clients

26.04.2020

How to make buying coffee in Casboutique even more profitable? Loyalty program

All promo codes with discounts on your next purchases you can find in coffee card, - a leaflet with a list of your current order, which will be in your order along with the coffee that you purchased.

For all our customers who have made at least one purchase with us, the following applies:

permanent discount 15% for the entire range of coffee beans and coffee capsules for Nespresso coffee machines;

additional discount of 500 rubles. on all offers with coffee machines, including promotions, where there are already discounts on sets with coffee machines.

Every 2 weeks, in the middle and at the end of the month, for all our customers who make purchases with us, we update promotional codes for a 30% discount in your coffee cards, which are valid for the next 2.5 months. These promo codes are in the sheet with the order(A4 paper in your order). Therefore, in order to retain discounts, you must make one purchase every 2 months (30% discount) without limiting the minimum purchase amount, i.e. generally for any amount.

Or you can always take advantage of 30% discount for the whole and by promo code SKIDKA30 if the total amount of your order is 10 thousand rubles or more. This discount is not valid for the offer only. Please do not try to use the promotional code in the basket with this promotional offer for 1 ruble. Such an incorrect order will be canceled by the operator upon confirmation of your order.

Promo codes are reusable and can be used multiple times during their validity period by you or your friends. Feel free to share discounts with your friends, and they can then reciprocate by sending you their promo code if suddenly you decide not to buy coffee in the next two months.

Following is an example of usage:
Vasily and Peter are friends. Vasily bought a large supply of coffee and received promotional codes with discounts for subsequent purchases, but because Vasily took coffee in reserve, then he no longer plans to buy coffee in the next 3 or more months. Vasily liked the coffee and advised his friend Peter to also buy coffee at Capsboutique, and told what promotional code Peter would need to enter in the basket on the site so that he would receive a 30% discount, despite the fact that Peter would make a purchase for the first time. Petr heeded his friend's advice and bought coffee at a 30% discount. Vasily is now a client of our online store. Peter promised Vasily that he would tell what promotional codes he would receive for subsequent purchases. Therefore, Vasily, despite the fact that he will not buy coffee in the next 3 or more months, will be able to use Peter's promo code and get a 30% discount when he needs coffee again.

You will learn:

The essence of the loyalty program on the example of a dialogue with the buyer.
Popular types of customer loyalty programs.
Development and implementation of a loyalty program in stages.
What to look for when creating the conditions for a loyalty program.
6 ways to evaluate the effectiveness of a company's loyalty program.
Examples of unusual loyalty programs from around the world.

Marketers are well aware that it is much more profitable to retain an existing customer than to attract a new one. The difference in costs for these activities can be up to 10 times! In addition, statistics confirm that a regular customer spends 67% more than a new one. Therefore, all efforts should be aimed specifically at retaining customers and stimulating repeat sales. To this end, the vast majority of companies implement loyalty programs in their activities, but few people know what is really important for consumers.

Expert opinion

The essence of the loyalty program on the example of a dialogue with the buyer

Egor Chemyakin,

Both executives and employees of marketing departments are constantly thinking about how to prevent their client from becoming a buyer of another company. The most common solution that comes to their mind is the use of discounts. Moreover, according to many, their regularity and significant size is the only way to retain a client. At the same time, the losses that accompany an incompletely thought-out discount policy are often not taken into account. As a result, such a system can hardly be considered effective and, most importantly, beneficial for the company.

For example, let's analyze the model of interaction between the seller and the buyer, when the client expects to receive a discount and unambiguously makes it clear that otherwise he will turn to another supplier of goods or services.

Bad option:

What discount will I get?
- There are no discounts for this product.
- In this case, I will order from your competitors!
- Okay, I can arrange a 5% discount for you personally, but this is between us.

A good option:

Can I get a discount?
- Of course, if the purchase amount exceeds 10 thousand rubles, your discount will be 5%.
- Well, such conditions suit me.

The best option:

Will there be a discount?
- Oh sure. Moreover, your personal discount will grow along with the number of your purchases. If you purchase goods for 10 thousand rubles, you will receive a 5% discount, and if the purchase amount exceeds 20 thousand rubles, the discount will be 10%.
- That is, if the price of this coat is 22 thousand rubles, I will pay 19,800?
- Yes, that's right.

These dialogues fully reflect the essence of the loyalty program for customers, which is widely used by small businesses throughout Russia. If you want to radically differ from your competitors, it's time to think about how to do it.

The loyalty program includes a whole range of activities, each of which is aimed at retaining existing customers and creating long-term mutually beneficial relationships between customers and the company.

The goal that the seller seeks to achieve using loyalty programs is repeat sales. Such programs are invariably marketing strategy organizations and are aimed at increasing profits, increasing sales, retaining old and attracting new customers. The effectiveness of a set of measures is measured using indicators such as:

acquisition of new customers;
increase in revenue from repeat sales;
increase in the frequency of purchases (increase in the number of receipts);
expansion of the list of goods purchased by one consumer (diversification of purchases);
decrease in the level of customer churn;
shift of buyers' interests towards more expensive goods.

So if you have not yet thought about implementing a customer loyalty program, now is the time to start using this powerful tool to take your business to a new stage of its development.

Restaurant loyalty program: practical recommendations from a practitioner

8 Popular Types of Loyalty Programs for Customers

Discount Loyalty Program

By far, the most common way to retain and attract customers, not only in Russia, but throughout the world, is to provide discounts. They can be both one-time and cumulative. The client receives a discount card, the presentation of which, with each subsequent purchase, entitles him to a certain discount - either a fixed amount or increasing over time.

The essence of a cumulative discount is that by crossing a certain threshold set by the company, the consumer has the opportunity to save even more, that is, the size of his discount grows along with his loyalty. Some firms even "punish" customers who visit the store irregularly, lowering the percentage of the discount and returning it only at the next purchase.

The advantages of such a system:

Everyone loves discounts, especially Russians in the context of a protracted economic crisis and reduced purchasing power.
This type of loyalty program is simple in terms of organization and control of its implementation.

Cons of the system:

Discount cards of two or three competing companies are in the wallet of each buyer, and the size of the discount that he can count on, as a rule, does not differ. Therefore, it is a stretch to assume that this tool really works.
The client is interested in constant purchases only as long as his discount has not reached its maximum value.
Any discount is a reduction in the company's net profit.

This is easy to verify in simple example. Imagine that the price of one of your products is 9,000 rubles. The markup you made is 30%. By implementing it under the loyalty program with a 5% discount, you lose 450 rubles. At first glance, compared to the amount of the sale, this is a small part of it. But not everything is so simple.

Each product or service has a cost that you cannot change. The discount you give to the customer is subtracted from the profit you could have made. Let's say in this example it is 2700 rubles. Minus the discount, you will be left with only 2250 rubles.

Thus, giving the buyer 5% of the retail price, you yourself lose 17.5%. As you can see, not so little. Well, if you can afford a markup of 100-200%. What if we increase the discount?

Remember this point, we will return to it a little later. In the meantime, let's look at what loyalty programs exist for customers, in addition to the discount one.

Loyalty bonus program

Discounts in this option of customer retention are not provided, they are replaced by bonuses. The fundamental difference is that, by leaving a certain amount indicated by the company at the checkout of the store, the consumer receives a certain amount of bonuses that can either be used as a partial payment for the next purchase (for example, up to 20% of the cost), or be exchanged for goods valued in the number of bonuses. Various companies use bonuses in the form of points, stickers, rubles or local currency that is in circulation within the same trading network.

The advantages of such a system:

The loyalty bonus program is effective where it is possible to make regular purchases.
A client can become the owner of a decent amount of bonuses if he constantly purchases and for impressive amounts.
As a mandatory condition, the company may put forward a requirement for a certain period of validity of bonuses, after which they expire, which will encourage consumers to make an unplanned purchase.
Having received bonuses, not all customers will use them, therefore, the company does not lose anything, and the product is eventually sold at full price.

Cons of such a system:

When it comes to a very expensive, and therefore rare or one-time purchase, implement bonus program loyalty makes no sense. The client is unlikely to return to you again, despite the benefits offered to him.
If the rules for accumulating and using bonuses are too complicated, consumers simply will not understand them, and as a result, the loyalty program will not fulfill its function.
Bonuses are a more complex option than discounts. To control the correctness of their accrual and use, as well as compliance with the validity period, a special program will be required.

There are two ways to quickly increase the profits of any company - to raise prices for goods or services, or to replace the discount loyalty system with a bonus one.

Let's return to our example about a 5% discount for a product worth 9,000 rubles. Let's see how it works for bonuses. The client made a purchase, for which he was awarded bonus points in the amount of 5% of the value of the goods. He can spend them when he completes the next one.

1st purchase - 9000 rubles.
2nd purchase - 9000 rubles.

Bonus from the first purchase (located on his card) - 5%, or 450 rubles.

So 2700 (your net profit on the first sale) + 2700 (second sale) - 450 (first purchase credits written off) = 4950 (your net profit minus the discount).

Thus, with the loyalty bonus program, the profit discount was 8.5% versus 17.5% in the first case.

Of course, you can argue that the customer is entitled to another 5% on the next purchase, which again adds up to 17.5%. However, practice shows that not everyone will return for the next product, but someone will come when the validity period of the accrued bonuses has already expired. And only after the completion of the next transaction, the buyer will receive bonuses for the next purchase.

It is quite possible that you will have a question, will you lose all your customers by replacing discounts with bonuses? You shouldn't be afraid of it. Probably, some share will refuse your services, but in return you will receive an increase in profits.

So you have nothing to fear. The small number of customers who leave due to a change in the loyalty program would never become your loyal customers. There are always people who are constantly looking for the best deals and therefore do not fall into the group of main consumers for any company.

Nevertheless, we will make a reservation that, of course, the choice of a loyalty program must be approached, taking into account many different factors. There is no one universal recipe that suits absolutely all types of businesses.

And one more piece of advice. Do not ask customers what suits them more - bonuses or discounts. The answer is so clear - a discount. The benefits that can be obtained here and now, always better than that what will happen in the long run. Therefore, choose a loyalty program based on the interests of your company.

Tiered loyalty programs

This customer retention system is simple in essence, but rather difficult to implement. It is based on a direct relationship between how much a client spends on paying for goods and services in your company, and the privileges that he receives as a result. These include Additional services delivery type or longer warranty. By demonstrating loyalty to your firm, the consumer secures a higher status for himself. Such a system works effectively in the banking and insurance sectors, and it is also a favorite airline loyalty program.

System advantages:

The driver of this loyalty program is ambition, the desire to take a more advantageous position compared to ordinary customers, so a person is ready to spend more and more.
It is in demand in areas where there are clients of the VIP and Double-VIP segment.

Cons of such a system:

Implementing this program makes sense only for goods and services high level cost.
Bonuses must be very significant.
Since the system requires an individual approach, it may be difficult to implement it. Naturally, one cannot do without a computer program specially written for these purposes.

Paid loyalty program

In this case, the client simply buys the right to receive any bonuses and privileges. Usually it looks like a fixed subscription fee, for which access to additional features, limited resources, special terms of service is provided.

The advantages of such a system:

Easy to organize.
Ideal for regularly purchased goods and services.
Customers willingly pay for access to such a loyalty program, but do not always actively use it (that is, the company receives money, but does not give anything in return).
You can calculate the cost of bonuses in order to fully comply with your interests.

Cons of the system:

If, from the point of view of customers, the benefit of a paid subscription is below the price they have to pay, such a model is doomed to failure.

It should be recognized that this is the most effective loyalty program for individuals, because it allows customers to receive tangible benefits compared to buyers who do not participate in it. But in order to bring it to life, you must reach a certain level of development in your segment. As an example, consider large retail chains- "Okay" and "Tape". The cards they offer to their customers are inexpensive, but the difference in price between some items for cardholders and non-cardholders can be very significant.

Loyalty programs with intangible rewards

When you understand what is truly valuable to your customers, building a long-term motivational model will not be difficult.

It is possible for almost any company to launch a loyalty program based on discounts or prizes, but one that can offer its consumers privileges that cannot be measured in money will move to the next level of customer relations.

The coup was conceived by the marketers of Patagonia, an outdoor clothing brand. Equipment for active rest often in need of repair. It was this service that was offered to customers instead of points and discounts. The concept is called "The Stories We Wear" and connects extreme sports enthusiasts with clothing from this brand on an emotional level.

Affiliate Loyalty Program

As in the previous case, we are talking about the need to find out the needs of your customers that are not among those satisfied by your company, but no less important to them. Your task is to find partners for whom your consumers are also customers.

Loyalty programs based on strategic partnerships can enable rapid business development and growth client base. For buyers, they serve as an indicator that you understand their needs well and are doing everything possible to help them.

An example of advanced affiliate marketing is American Express. The company cooperates with Macy's, AT&T, Rite Aid, Enterprise Rent-A-Car and Hulu. By participating in the loyalty program, customers receive points that can later be used to pay for the services of a partner company. By renting a car at Enterprise and earning a certain amount of bonuses, the buyer can use them to pay for communication services at AT&T.

Loyalty programs with elements of gamification

The use of gaming mechanisms in the loyalty program allows you to interest customers and achieve significant results.

The first thing that comes to mind in this case is the holding of various competitions. This technique, of course, has the right to exist, but the programs must be very carefully designed so that customers treat them with the proper level of seriousness and enjoy participating in a show that brings variety to the daily shopping procedure.

To achieve this, it is important to offer consumers benefits that are really in demand and at the same time realistically achievable. The conditions of the competitions must be worked out to the smallest detail - this will minimize the interest of prize hunters. Launching a new game program must be preceded by detailed informing of all departments, so as not to create a situation where customers know more about the ongoing promotion than store employees.

An example of a company that successfully uses the element of the game as a loyalty program is GrubHub. Since 2011, this food delivery brand has been giving customers the opportunity to win a dessert or drink during the order, and every fourth buyer has a real chance to do so.

Natural Loyalty Programs

Since loyalty programs are so widespread today, coming up with a new method of customer retention is not an easy task. However, the lack of a system for attracting and retaining customers can also be considered an innovative approach.

It can be afforded by those companies whose product or service is distinguished by its uniqueness. And the point is not in the high price category or undeniable quality, but rather in the direction of the industry as a whole. In this case, there is no need to encourage customers with loyalty programs, because they receive a product that has no equal.

Let's take Apple. With millions of devoted fans of her products, she does not consider it necessary to give prizes or discounts to anyone. The main priority of this brand is a unique product that meets the expectations of customers as much as possible. It is this loyalty program that is considered natural.

Examples of loyalty programs

Family Team (Rosneft)

Anyone who purchases a bonus card. Its cost may vary slightly in different regions, but the maximum figure is 250 rubles.

Bonuses are credited as follows:

for the purchase of petroleum products - 1 bonus for every 10 rubles;
for the purchase of related goods and services - 3 bonuses for every 10 rubles.

After accumulating a certain number of bonuses, you can exchange them for products with company symbols (t-shirts, baseball caps, bags, and similar items). You can also purchase fuel for bonuses.

The biggest prize of this loyalty program is Formula 20 - 20 liters of any fuel. It can be obtained by those clients whose bonus account accumulates 3999 points. This can be achieved:

When buying fuel: you need to spend 39,990 rubles. As a result, the loyalty program card will return to the member 1.7% of total cost his purchases.
When purchasing related products and services in the company's mini-markets: you need to spend 13,330 rubles to get 20 liters of bonus fuel. In this case, the refund will be 5.1% of the purchase price.

Thus, by participating in the Rosneft filling station loyalty program, customers have the opportunity to return from 1.7 to 5.1% of the purchase amount in the form of bonuses.

Other examples of loyalty programs see the article in the magazine "CEO".

Development of a loyalty program in stages

Stage 1. Analysis and division into segments of the customer base (for wholesale companies) or target audience(in retail). This stage involves making adjustments to the standard loyalty ladder depending on the specifics of your company's business processes. It is necessary to check the client base for relevance. Among those consumers with whom there is no interaction for more than two purchase cycles, it is necessary to single out lost ones (passed over to competitors) and closed ones.

Stage 2. Distribution of customers by loyalty levels, clarification of their needs and expectations from interaction with your company at each stage. Identifying consumer concerns at each rung of the loyalty ladder.

Stage 3. Monitoring the actions of competitors. What are the offers coming to customers from other companies at each stage of interaction? Definition strengths your organization and competitors. The purpose of this stage is to find out how stable your position in the market is, due to what advantages competitors will be able to lure away your customers, and, conversely, what will allow you to get other people's buyers.

Stage 4. Development of an interaction plan with each customer segment. At this stage, loyalty programs are formed for a particular group of consumers, taking into account the forms of encouragement that work in your market and are typical for your type of product or service. A separate action plan is being developed to return lost customers identified during the database audit. For the most attractive customers, special forms of incentives are introduced.

What to look for when creating the conditions for a loyalty program

To launch a truly successful loyalty program, company management must have a good idea of what customers really need, what conditions will make them stay loyal to your brand, and not look for profit from competitors.

What does that require?

Put yourself in the shoes of your client. Let's say you run a company that deals with wholesale trade. What is more important for your client - to accumulate bonuses in order to receive some special service conditions in return, or is it more important for him to buy at a discount in order to be able to retail at a higher profit? Put yourself in the place of your customers and the answer will come by itself.

Analyze competitors and act completely differently. For example, competitors apply a progressive discount. So, in contrast to them, you should choose a bonus program, and prepare very good prizes that will attract customers.

Take as a basis the loyalty program of competitors, but make your own improvements to it. However, you should first make sure of its effectiveness by analyzing the state of affairs of rivals. It is quite possible that it does not bring the desired result, so copying it is pointless.

3 Examples of Unusual Loyalty Programs for Loyal Customers

Tip #1: Offer something really useful.

A loyalty program will only work if you offer customers what they really need. A useless gift will simply be thrown away, and your goal of motivating customers will not be achieved.

Let's take the Raspberry bonus program as an example. Its participants were offered to accumulate points by making purchases in various outlets. Subsequently, bonuses could be exchanged for some cheap trinket. Of course effective this program loyalty could not be named, and it was on the verge of extinction. But after some time, the organizing company managed to understand the needs of customers, and buyers had the opportunity to exchange their accumulated points for useful goods and services.

Tip #2: Gently Remind Your Loyalty Program

To be successful in reaching your goal, keep your customers informed by keeping them informed about marketing promotions. Today, there are many convenient ways to do this - from Email to messengers like Telegram, Viber and WhatsApp.

True, marketers disagree on what frequency of sending informational messages is considered optimal. Someone thinks that twice a month is the limit, while others are sure that it is permissible to send three messages daily.

Following two conditions will help to establish the most acceptable touch frequency:

The point of view of the subscribers themselves: how often would they like to receive information?
The frequency with which customers use your product.

If we are talking about beauty salon services or consumer goods, mailing lists can be quite frequent. When offering a non-standard product or b2b service, you should not be too insistent.

Tip #3: Keep terms simple and clear.

The key to the success of the loyalty program is its availability for understanding by all customers. Formulate its terms, using no more than 50 words, and ask the driver or security guard working in your company to read them. If he did not understand the essence of the program or interpreted it in his own way, your work is no good. This does not mean that complex calculations should not be used in the calculation, but the mechanism of action should be completely transparent and understandable.

Carefully follow the wording that you use when describing the rules of the loyalty program. Some marketers, unwittingly, mislead customers by saying: “Collect 10 beer caps - get the 11th for free!”. A thoughtful consumer rightly decides that he does not need another cover, and will not take part in the loyalty program.

Other attempts to deceive customers, such as using microscopic illegible font to indicate important conditions for a prize, will only result in you permanently losing customers by pushing them into the arms of competitors with your own hands. Believe me, the buyer will forever remember how you did not live up to his expectations, which means that you missed the only chance. To avoid such problems, make sure that the rules of the loyalty program are extremely simple and do not require additional explanations.

Tip #4: Never cheat on customers.

Remember that all promises you make to your customers must be kept. If you doubt that you will be able to do this, do not promise. Thus, Aeroflot air carrier once launched a loyalty program, under which they issued co-branded cards together with many banks. It was very easy for customers to accumulate points, they only needed to use their cards and buy plane tickets. That is, in order to gain access to award flights, no special loyalty had to be shown.

As a result, people were given away so many points that entitle them to free flights that the company had to urgently revise the conditions of the program, namely, to reduce the number of seats for its participants and increase the amount of points. Aeroflot began to suffer losses as it became difficult for new customers to purchase tickets, and after all, sales growth is the main goal of any loyalty program. As a result, those passengers who were entitled to a free flight, but could not make it, considered themselves deceived, and this negatively affects the company's reputation.

Council number 5. Don't offend regular customers.

The company's attempts to attract new customers often result in offering them special gifts for participating in a loyalty program. At the same time, those buyers who have long been devoted to the brand are out of work.

Imagine that a firm you use all the time announces very attractive conditions for newcomers, while not rewarding their loyal customers in any way. It is clear that the company is interested in expanding its customer base, but this is no reason to offend those who bring it regular profits. A better option can be considered the "Bring a friend" program, which is successfully used by many sellers. At the same time, the number of buyers increases, and the bonus is received by a regular customer who has already proven his loyalty to the brand.

The director turned a boring pass to work into a loyalty program

6 Ways to Evaluate the Effectiveness of a Company's Loyalty Program

Launch of the pilot program

When starting to implement a loyalty program, no company can be completely sure of its effectiveness. It is quite possible that the reality will be very far from the plans. To assess how correctly the main provisions of the program are defined and what its approximate results will be, a pilot project will help - testing the system on a small business segment.

This approach is very convenient for retailers with an extensive network located in several regions of the country. The pilot launch of the loyalty program for stores is carried out in a single subject of the Russian Federation, in the process, identified shortcomings are corrected, and only after a successful check, the system begins to work in the entire network. Although the fact that different regions may have their own nuances should not be overlooked.

Analysis of program results before and after launch

To have an accurate idea of how effective a loyalty program is, it is necessary to regularly monitor its main indicators, as well as compare them at the time the program starts and after its completion. The most important parameters include the size of the average check, the frequency of purchases and the churn rate. All of them should be observed in dynamics and in parallel comparison with similar indicators of buyers who do not participate in the program.

Cohort analysis

Cohort analysis is used to measure the impact of a loyalty program on different groups of its participants, taking into account the duration in time and a specific stage of the life cycle.

In this case, a cohort means a group of clients that are united by common feature and period of action. The value of the result of the analysis directly depends on the degree of homogeneity of the group members. So, if you include young people from 20 to 30 years old in the cohort, the results of the study will be too general. It is better to combine young people with the same age interval, but with higher education and living in Volgograd.

Cohort analysis allows you to track the dynamics of consumption, namely its growth that occurs after the start of customer participation in the loyalty program. Ideally, every month the expenses of buyers should increase, but in reality the result may not be so straightforward and stable. This type of analysis is aimed at identifying patterns of consumer behavior depending on the duration of participation in the program. The results of the study allow us to find points that require adjustment and improvement for different types of customers and stages of the life cycle.

Cohort analyzes are performed on programs that are longer than one year and have not undergone major changes. For companies that have recently launched new loyalty programs, this type of research will be useless.

Look-alike analysis

An equally effective strategy is to compare participants in the program with those who do not participate in it, within the same socio-demographic segment. This type of research is called look-alike analysis.

Many marketers believe that those who have expressed a desire to participate in the program are already loyal customers, and by joining it they do not change their consumption pattern. Look-alike analysis allows you to test the truth of this statement and quantify the value of the system. Another positive moment is the ability to attract new customers to participate in the loyalty program, relying on those mechanisms that have already proven their effectiveness.

Control groups

An effective method that allows you to measure the results that have been achieved during the implementation of individual stages of the loyalty program is considered to be work with control groups.

A control group is a randomly selected group of customers who will not be the subject of marketing influence. The main requirement for the composition of its members is representativeness. The group should include all segments of consumers in the proportion in which they are included in the customer base.

On the control group individual marketing techniques and mechanisms of the loyalty program are checked. It is practically impossible for the program as a whole to create such a group: its members should not have access to information about the current program, and this is absolutely impossible, because its promotion is carried out publicly.

NPS - customer loyalty index

The most reliable way to measure customer loyalty is a direct survey. Net Promoter Score (NPS) allows you to assess, with the greatest possible accuracy, the likelihood of a repeat sale to a given consumer and his recommendations to his friends. The NPS method is based on a single question, the answer to which can predict the possibility of both a repeat purchase and a recommendation. The question is formulated very simply: “On a scale from 0 to 10, what is the probability that you would recommend us to a friend or relative?”.

Customer responses are categorized as follows:

0 - 6 = "Critics".
7 - 8 = "Neutrals".
9 - 10 = "Promoters".

The NPS index is calculated by subtracting the percentage of respondents classified as "Detractors" from the percentage of respondents classified as "Promoters": % Promoters - % Detractors = NPS.

It makes it possible to evaluate the results of the loyalty program for customers from various angles:

The loyalty of program participants and those who do not participate in it is compared.
The dynamics of changes in the index among program participants is tracked over a certain period of time.
NPS indicators are compared among various segments of loyalty program participants.

The main advantage of the NPS index is its simplicity. However, he is not able to answer the question about the reasons for customer loyalty or its absence. A complete picture of the effectiveness of the loyalty program can be obtained by applying NPS in conjunction with other methods of analysis.

Everyone regards marketing as customer acquisition. Kind of like an advertisement. Marketing = advertising. Attracted customers, they bought.

Everyone is satisfied: the head of the company, the customers themselves. The only thing is that it has long been proven that selling to a regular customer is 5 times cheaper than to a new one. And that's the problem with most leaders.

They do not think about how to retain a client, although there are simple and unobtrusive marketing tools for this. For example, a customer loyalty program.

Marketing and discounts

Although no, I'm wrong. Managers and marketers think like . But usually, the maximum they think of is discounts.

Those same banal discounts and, moreover, the greater the discount in their opinion, the higher the probability of retaining a client.

There is definitely truth in this. Only now they forget what discounts mean in business and how much it hits their margin. And all this as a result is very far from a working customer retention system.

And how do you keep...

Let's take as an example a classic situation in any business when a client asks you for a discount and at the same time subtly hints that if you do not give, then the consequences may be irreversible.

Bad option:

- Will you give me a discount?
We don't have discounts.
- Then I'll go buy from competitors!
- Well, I will give you my personal discount of 5%, but only to anyone about it.

A good option :

- Will you give me a discount?
– Yes, if you buy more than 10,000 rubles, you get a 5% discount.
- Okay, I'll buy it then.

The best option :

- Will you give me a discount?
- Of course. Moreover, the more you buy from us, the more discount you get. When buying for 10,000 rubles you will get a 5% discount, and when buying for 20,000 rubles you get a 10% discount.

- Nuuuu, okay, then let's get this coat for 22,000, then it will cost me 19,800.
- Yes that's right.

I think you have now learned the model of the loyalty program for customers, according to which more than half of small businesses in Russia work. And now is the time to change your business and stop being like 99% of your competitors.

If you do not have a loyalty program for customers, it's time to break the system and start it immediately after reading the article, especially since you will learn chips and life hacks that work in modern realities in Russia.

And even more so, if you have exactly the way I described in the examples, urgently fix it!

And if you are lucky and you are not so, I congratulate you, but I still strongly recommend reading the article in order to understand what to add / improve in your loyalty system.

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Three tasks - one way

So. What is a customer loyalty program? In short, it is a way to motivate your customers with three main objectives that most managers forget about when developing it:

To retain customers (Will you go to organization B if you have the maximum discount in organization A?!);
To increase sales (Will you buy just another 2,000 rubles to get an 8% discount?);
To (Remember before everyone went to Letual or Ile De Beaute with other people's cards to buy at the maximum discount?).

And in fact, all customer loyalty programs revolve around two simple actions (I would even say arithmetic operations) - write off or accrue, that is, plus or minus, that is, a discount or accumulative program.

It is them that we will now consider and get to the thought “Which is better - a discount or bonuses?”. If you do not want to read the article further, watch the video:

In general, there are more than 4 loyalty programs, but today we will study only these 4. And yet, get ready that while reading the article, you will have thoughts of changing the old one that works well / poorly for a new one that you will learn literally within 3 minutes.

Discount Loyalty Program

As I wrote earlier, this is the most common of the loyalty programs, and not only in Russia, but also in the world in general.

Expressed either in a one-time or cumulative discount. As a rule, this is a discount card that gives a certain percentage discount when buying. Why certain?

Because discount cards come with either a fixed or a cumulative discount.

The cumulative discount is due to the following function - when buying at certain price thresholds, the client receives an increase in percentage as a reward for loyalty to the company.

Some are sophisticated and come up with conditions that if the client does not appear with them, for example, once a month, then it goes down a step and so on until he comes to his senses and comes again.

Pros :

Customers love discounts. In Russia especially. In the conditions of this time is very special.
Such a program is simple and clear, so it is easy to organize and control.

Minuses :

Now any person usually has at least 2-3 discount cards of companies in the same field.
And usually the amount of the discount is the same everywhere. Therefore, in competitive areas, one might say, “loyalty” is more like a word than a really working tool;
As soon as the client stops growing in the process of winning the maximum discount, his interest to progress in purchases also begins to fade;
The main disadvantage of discounts is that they are given from net profit (example below).

Let's give an example about the loss of money from net profit due to discounts. Let's say you sell some product for 9,000 rubles. Your margin is - 30% Discount - 5% or 450 rubles. It seems to be a little, BUT!

You have the cost of a product / service that you will not get anywhere, and accordingly you give a discount on your net profit.

Thus, you actually lose 450 rubles not from turnover, but from your net profit, which, for example, is 2,700. It turns out that at the output, taking into account the discount, you earn 2250.

The total size of the discount (if calculated on net money) is not 5% at all, but as much as 17.5%. And this, you see, is essential. Of course, this will not be so noticeable if your margin is 100-200 percent, but what if the discount is larger?

Loyalty bonus program

In this program, the client no longer receives discounts. They magically turn into bonuses. But the principle is the same.

When making a purchase for a certain amount, you receive a certain percentage of bonuses from the transaction amount on your account/card, which you can spend on your next purchase (even exchange for a free product).

The bonuses themselves can be in any form: points, stickers, rubles. Yes, even the fictional currency of the store (not the worst option, by the way).

Pros :

If you mean repeat purchases, then the system can work for quite a long time and successfully without unnecessary troubles;
To accumulate a decent number of bonuses, the buyer must buy constantly or in large amounts, which is extremely beneficial for the business owner;
Bonuses may tend to burn out, which means that this will be an additional incentive to come to you as soon as possible and spend them;
Not all customers come to spend bonuses, so you can say that you leave this money with your company and end up selling without a discount at all.

Minuses :

If the purchase is one-time or very expensive / rare, then such a loyalty program will not work. The client simply has no interest in participating in it, since he will not come to you again;
If you make tricky / complex rules for a loyalty program, buyers may get confused or not understand it at all, which will completely destroy the whole idea of \u200b\u200bcreating it;
More difficult to control than discounts, so special software may even be needed.

Which is the second most fast way increase profits in any company? Have you thought about the first one? Don't think it's a price hike. The second is to switch from discounts to bonuses.

Remember our example about a product worth 9,000 rubles and a 5% discount? Let's apply it to bonuses. All the same.

You accrued 5% to the client on his bonus card at the first purchase, which he will be able to use at the next purchase. We consider.

1st purchase - 9,000 rubles
2nd purchase (also) - 9,000 rubles
Bonus from the first purchase (lies on his card) - 5% or 450 rubles.

Thus, 2700 (first purchase) + 2700 (second purchase) - 450 (rewards deducted from first purchase) = 4,950 (your net profit minus the bonus discount). The total discount from your profit was 8.5% versus 17.5% in the first case.

Particularly attentive should have noticed that from the second purchase the guest will still receive another 450 rubles to the account and it turns out, as a result, we will give out the same 17.5 percent. And they will be right.

Only if we return to the advantages of this system, we must remember that half of the people will not come, half of the bonuses will burn out and these bonuses will encourage the client to come again.

And also answering your question right away: “What will happen if we cancel discounts and introduce bonuses, will all customers run away?”. Nothing will happen! Yes, some part will leave, but its departure is compensated by an increase in your profit.

Oh, calm, only calm

In general, it is not dangerous. We checked repeatedly. And by the way, the part that will leave is the most unreliable and few customers who are ready to go to the other end of the city if they find a product/service 10 rubles cheaper. You don't have to rely on those.

Although, of course, in order not to be guilty later that your company has ceased to be profitable, I will still make an amendment.

And I have a request for you. No need to ask customers: “Which would you choose: discounts or bonuses?”. The customer will always respond with a discount.

This is how our psychology works - “Good now, bad later”. Therefore, take yourself for ... willpower, cancel discounts (if any) and introduce bonuses.

Life hack. If you want to get finished program loyalty, I advise " ". Very cool functionality and flexible settings. And with the promo code "INSCALE" - a 10% discount.

Tiered loyalty programs

It is quite simple and at the same time a complex system. The more money a person spends in your company, the more interesting group of customers he gets and the more interesting bonuses he gets.

For example, it may be some additional free services (free shipping, extended warranty, etc.).

That is, by spending more money, the client raises himself in status. Often such loyalty programs are used in banking, insurance or airlines.

Pros :

Such a program is built on pride, since the more a person spends, the more interesting group he will fall into, which positively affects the client’s desire to spend more;
Ideal for the segment of VIP and Double-VIP people (double-VIP).

Minuses :

It is both a minus and a plus. Such a system is ideal only for expensive goods and services;
You need very strong bonuses when you reach one or another bar;
Quite difficult to implement and track. Again, you need special software.

Paid loyalty program

Or getting some bonuses / privileges / goodies for a subscription. That is, the client pays money (usually a fixed subscription fee) and as a result of which it receives privileges.

This may be an increased service, additional services, access to some closed resources, and the like.

Pros :

Very easy to organize;
Ideal for products that are bought frequently;
Clients buy access to such a loyalty program, but often do not use it (that is, “free money”);
You can work out the cost of bonuses so that they are the most profitable for you in terms of money.

Minuses :

If the value (perception) of a paid subscription is below the price, then the whole program may fail.

Let's just say, this is the coolest and strongest loyalty program. The one you get paid for, but let's be realistic.

For this to happen, you need to be a very popular company in your sales territory.

How to choose a loyalty program for customers?

This is very important point. Since a manager or marketer always perceives his business in a special way, so to speak, “in rose-colored glasses” (this is a fact that is also relevant for us), it is very difficult for them to understand what his client wants.

Yes, to realize everything as in the popular proverb - "Eat the fish and do not wash the pan after yourself." Duck what to do?

Trite, but you have to put yourself in the place of the buyer. Let's imagine that you have a wholesale organization.
What do you think your favorite (for you) client wants? Accumulate bonuses to exchange them for something free? Or does he want (and is used to) getting discounts here and now?
Therefore, you take the side of buyers, analyze your range of goods / services and find the answer to these questions.
Ask customers who already buy something from you what they want (but remember the stop question: discounts or bonuses?). You can post a survey on the website, in social networks, networks or in your office.
As a rule, the answers will be from the series “lower prices, more discounts”. But sometimes adequate people will come across who can tell interesting ideas, this is the essence of this action.
Do a competitor analysis and decide on one of two strategies:
3.1 Go the other way. If the client gives a progressive discount, up to the maximum, then it may be better to refuse discounts altogether and switch to a bonus program, just with very interesting prizes.
3.2 Model it and improve it. Just remember that everything can be ambiguous.
After all, maybe a competitor miscalculated, introduced a discount loyalty program, now he doesn’t earn anything at all and grieves from it at night, but you didn’t analyze it and decided to copy it.
And the last step, when you have thought about everything except yourself, ask the same question as in the first paragraph, only to yourself: “What do I want?” or “What benefits me?”.
Sometimes it is better to make a system with discounts, and sometimes with bonuses. As I wrote above, there is always a factor in the market that can change everything.
Therefore, calculate under what scheme your company will grow in profit (or in your case it may make sense to grow in turnover to capture market share now).

And finally, a few life hacks that will make your customer loyalty program even more interesting:

If you decide to switch to a discount loyalty program, then make it progressive.
Buying for 10,000 rubles - a 5% discount, for 20,000 rubles - a 7% discount, for 50,000 rubles - a 10% discount.
The more a customer buys, the more big discount he receives. The only thing is that discounts should not be just crazy on an ongoing basis (from 20%), this can play a cruel joke and scare off buyers.
If you have a catering or a store, and you count bonuses manually, then rather go to turnkey solutions that don't cost a lot of money.
For example, such as Plazius (for catering) or Bazaronline (for retail stores). They already have everything you need. You only need to connect them, calculate the amount of bonuses based on your marginality, and put them into action.

Briefly about the main

Video in the end, how stupid the picture as a whole can look when you complicate it too much and stop understanding yourself 🙂

And a small summary of the article: if you just want to start a customer loyalty program because you need to quickly increase profits, then ... No, it will not help you and you do not need it.

A customer loyalty program is just one of the marketing tools, which can make your buyer (sorry for the tautology) more often and more, but in the long run.

And one more parting word - do not complicate. I remember we decided to introduce a loyalty bonus program for one client in the catering.

We've been counting it for about a month. Well, for a very, very long time. He called me constantly and offered new mechanics. Confusing both me and myself, and even future guests of my institution.

In the end, I spat and introduced the following conditions: 20 percent of each check was accumulated for the next visit. Once the guests are accustomed to new system, we began to gradually complicate it.

Everyone regards marketing as customer acquisition. Kind of like an advertisement. Marketing = advertising. Attracted customers, they bought.

They do not think about how to retain a client, although there are simple and unobtrusive marketing tools for this. For example, a customer loyalty program.

Marketing and discounts

Although no, I'm wrong. Managers and marketers think like . But usually, the maximum they think of is discounts.

Those same banal discounts and, moreover, the greater the discount in their opinion, the higher the probability of retaining a client.

And how do you keep...

Bad option:

- Will you give me a discount?
We don't have discounts.
- Then I'll go buy from competitors!
- Well, I will give you my personal discount of 5%, but only to anyone about it.

A good option :

- Will you give me a discount?
– Yes, if you buy more than 10,000 rubles, you get a 5% discount.
- Okay, I'll buy it then.

The best option :

- Nuuuu, okay, then let's get this coat for 22,000, then it will cost me 19,800.
- Yes that's right.

And even more so, if you have exactly the way I described in the examples, urgently fix it!

And if you are lucky and you are not so, I congratulate you, but I still strongly recommend reading the article in order to understand what to add / improve in your loyalty system.

WE ARE ALREADY MORE THAN 29,000 people.
TURN ON

Three tasks - one way

So. What is a customer loyalty program? In short, it is a way to motivate your customers with three main objectives that most managers forget about when developing it:

To retain customers (Will you go to organization B if you have the maximum discount in organization A?!);
To increase sales (Will you buy just another 2,000 rubles to get an 8% discount?);
To (Remember before everyone went to Letual or Ile De Beaute with other people's cards to buy at the maximum discount?).

It is them that we will now consider and get to the thought “Which is better - a discount or bonuses?”. If you do not want to read the article further, watch the video:

Discount Loyalty Program

As I wrote earlier, this is the most common of the loyalty programs, and not only in Russia, but also in the world in general.

Expressed either in a one-time or cumulative discount. As a rule, this is a discount card that gives a certain percentage discount when buying. Why certain?

Because discount cards come with either a fixed or a cumulative discount.

The cumulative discount is due to the following function - when buying at certain price thresholds, the client receives an increase in percentage as a reward for loyalty to the company.

Pros :

Customers love discounts. In Russia especially. In the conditions of this time is very special.
Such a program is simple and clear, so it is easy to organize and control.

Minuses :

Now any person usually has at least 2-3 discount cards of companies in the same field.
And usually the amount of the discount is the same everywhere. Therefore, in competitive areas, one might say, “loyalty” is more like a word than a really working tool;
As soon as the client stops growing in the process of winning the maximum discount, his interest to progress in purchases also begins to fade;
The main disadvantage of discounts is that they are given from net profit (example below).

You have the cost of a product / service that you will not get anywhere, and accordingly you give a discount on your net profit.

Thus, you actually lose 450 rubles not from turnover, but from your net profit, which, for example, is 2,700. It turns out that at the output, taking into account the discount, you earn 2250.

Loyalty bonus program

In this program, the client no longer receives discounts. They magically turn into bonuses. But the principle is the same.

The bonuses themselves can be in any form: points, stickers, rubles. Yes, even the fictional currency of the store (not the worst option, by the way).

Pros :

If you mean repeat purchases, then the system can work for quite a long time and successfully without unnecessary troubles;
To accumulate a decent number of bonuses, the buyer must buy constantly or in large amounts, which is extremely beneficial for the business owner;
Bonuses may tend to burn out, which means that this will be an additional incentive to come to you as soon as possible and spend them;
Not all customers come to spend bonuses, so you can say that you leave this money with your company and end up selling without a discount at all.

Minuses :

If the purchase is one-time or very expensive / rare, then such a loyalty program will not work. The client simply has no interest in participating in it, since he will not come to you again;
If you make tricky / complex rules for a loyalty program, buyers may get confused or not understand it at all, which will completely destroy the whole idea of \u200b\u200bcreating it;
More difficult to control than discounts, so special software may even be needed.

What is the second fastest way to increase profits in any company? Have you thought about the first one? Don't think it's a price hike. The second is to switch from discounts to bonuses.

Remember our example about a product worth 9,000 rubles and a 5% discount? Let's apply it to bonuses. All the same.

You accrued 5% to the client on his bonus card at the first purchase, which he will be able to use at the next purchase. We consider.

1st purchase - 9,000 rubles
2nd purchase (also) - 9,000 rubles
Bonus from the first purchase (lies on his card) - 5% or 450 rubles.

Oh, calm, only calm

Although, of course, in order not to be guilty later that your company has ceased to be profitable, I will still make an amendment.

And I have a request for you. No need to ask customers: “Which would you choose: discounts or bonuses?”. The customer will always respond with a discount.

This is how our psychology works - “Good now, bad later”. Therefore, take yourself for ... willpower, cancel discounts (if any) and introduce bonuses.

Life hack. If you want to get a ready-made loyalty program, then I advise ““. Very cool functionality and flexible settings. And with the promo code "INSCALE" - a 10% discount.

Tiered loyalty programs

This is a fairly simple and at the same time complex system. The more money a person spends in your company, the more interesting group of customers he gets and the more interesting bonuses he gets.

For example, it can be some additional free services (free shipping, extended warranty, etc.).

That is, by spending more money, the client raises himself in status. Often such loyalty programs are used in banking, insurance or airlines.

Pros :

Such a program is built on pride, since the more a person spends, the more interesting group he will fall into, which positively affects the client’s desire to spend more;
Ideal for the segment of VIP and Double-VIP people (double-VIP).

Minuses :

It is both a minus and a plus. Such a system is ideal only for expensive goods and services;
You need very strong bonuses when you reach one or another bar;
Quite difficult to implement and track. Again, you need special software.

Paid loyalty program

Or getting some bonuses / privileges / goodies for a subscription. That is, the client pays money (usually a fixed subscription fee) and as a result receives privileges.

This may be an increased service, additional services, access to some closed resources, and the like.

Pros :

Very easy to organize;
Ideal for products that are bought frequently;
Clients buy access to such a loyalty program, but often do not use it (that is, “free money”);
You can work out the cost of bonuses so that they are the most profitable for you in terms of money.

Minuses :

If the value (perception) of a paid subscription is below the price, then the whole program may fail.

Let's just say, this is the coolest and strongest loyalty program. The one you get paid for, but let's be realistic.

For this to happen, you need to be a very popular company in your sales territory.

How to choose a loyalty program for customers?

This is a very important point. Since a manager or marketer always perceives his business in a special way, so to speak, “in rose-colored glasses” (this is a fact that is also relevant for us), it is very difficult for them to understand what his client wants.

Yes, to realize everything as in the popular proverb - "Eat the fish and do not wash the pan after yourself." Duck what to do?

Trite, but you have to put yourself in the place of the buyer. Let's imagine that you have a wholesale organization.
What do you think your favorite (for you) client wants? Accumulate bonuses to exchange them for something free? Or does he want (and is used to) getting discounts here and now?
Therefore, you take the side of buyers, analyze your range of goods / services and find the answer to these questions.
Ask customers who already buy something from you what they want (but remember the stop question: discounts or bonuses?). You can post a survey on the website, in social networks, networks or in your office.
As a rule, the answers will be from the series “lower prices, more discounts”. But sometimes adequate people will come across who can suggest interesting ideas, this is the essence of this action.
Do a competitor analysis and decide on one of two strategies:
3.1 Go the other way. If the client gives a progressive discount, up to the maximum, then it may be better to refuse discounts altogether and switch to a bonus program, just with very interesting prizes.
3.2 Model it and improve it. Just remember that everything can be ambiguous.
After all, maybe a competitor miscalculated, introduced a discount loyalty program, now he doesn’t earn anything at all and grieves from it at night, but you didn’t analyze it and decided to copy it.
And the last step, when you have thought about everything except yourself, ask the same question as in the first paragraph, only to yourself: “What do I want?” or “What benefits me?”.
Sometimes it is better to make a system with discounts, and sometimes with bonuses. As I wrote above, there is always a factor in the market that can change everything.
Therefore, calculate under what scheme your company will grow in profit (or in your case it may make sense to grow in turnover to capture market share now).

And finally, a few life hacks that will make your customer loyalty program even more interesting:

If you decide to switch to a discount loyalty program, then make it progressive.
Buying for 10,000 rubles - a 5% discount, for 20,000 rubles - a 7% discount, for 50,000 rubles - a 10% discount.
The more the customer buys, the bigger the discount he gets. The only thing is that discounts should not be just crazy on an ongoing basis (from 20%), this can play a cruel joke and scare off buyers.
If you have a catering or a store, and you count bonuses manually, then rather switch to ready-made solutions that do not cost a lot of money.
For example, such as Plazius (for catering) or Bazaronline (for retail stores). They already have everything you need. You only need to connect them, calculate the amount of bonuses based on your marginality, and put them into action.

Briefly about the main

Video in the end, how stupid the picture as a whole can look when you complicate it too much and stop understanding yourself 🙂

And a small summary of the article: if you just want to start a customer loyalty program because you need to quickly increase profits, then ... No, it will not help you and you do not need it.

A customer loyalty program is just one of the marketing tools that can get your customer (sorry for the tautology) more often and more, but in the long run.

And one more parting word - do not complicate. I remember we decided to introduce a loyalty bonus program for one client in the catering.

We've been counting it for about a month. Well, for a very, very long time. He called me constantly and offered new mechanics. Confusing both me and myself, and even future guests of my institution.

In the end, I spat and introduced the following conditions: 20 percent of each check was accumulated for the next visit. As soon as the guests got used to the new system, we began to gradually complicate it.

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“Changes in the marketing environment have an immediate impact on prices and technology, but strong relationships are not subject to them.” - Regis McKena

Regardless of the size of the company, its most reliable weapon in competition- long-term customer loyalty. In this article, we decided to cover the topics of customer loyalty management and customer loyalty formation - how to win and retain customer loyalty by offering them the optimal combination of tangible and intangible privileges. The main goals of the loyalty program, how to evaluate the success of loyalty programs, pricing in loyalty programs. As well as customer loyalty programs, examples of the most successful companies in the world, including Volkswagen Club, Kawasaki Riders Club, Swatch the Club, Porsche and others.

How to evaluate the success of a loyalty program to build customer loyalty

The success of a loyalty program, like any other marketing tool, must be measured accordingly. Profit or loss ratios should be measured, as well as factors that can be assessed automatically: the speed of response to program promotions, brand loyalty.

Practical experience shows that the introduction of a loyalty program brings a tangible effect: sales growth can range from 6 to 80%!

Hierarchy of goals for loyalty programs

What do you offer to build customer loyalty?

Instead of just offering discounts to your customers, have them earn them themselves as a loyalty reward. This will create a favorable situation both for the company and for the customers. preliminary analysis and calculations are necessary for the competent organization of the strategy, but efforts will certainly be rewarded.

Key Points of Customer Loyalty Programs

Not all loyalty programs on the market are really effective. In order to increase the likelihood of success of the loyalty program implementation, it is necessary to take into account a number of factors:

Offer something that is truly valuable to the client.
Monitor alternative offers.
Make your customers feel unique.
The investment in a loyalty program and the profit generated by its implementation must be balanced.
Build a close relationship between the company and the client, beneficial to all involved.
Loyalty program should be part of existing marketing plans companies.
Most effective program loyalty program for interacting with customers - omnichannel (for example, a customer loyalty program).
The loyalty program should be integrated into the corporate culture of the company, be clearly planned and easily managed.

A well-designed loyalty program is effective tool, which results in:

- Building strong relationships with customers

- customer interest

- encouragement of regular customers

— efficient use of the budget

- loyal customers

A customer loyalty program is not a way to achieve instant results, it is a long-term scrupulous work. A loyalty program can add value to a product, but not create it.

Already attracted or potential customers?

According to the 80:20 rule, 20% of a company's customers account for 80% of its sales. Based on our own experience, we also believe that the main target group of the loyalty program is regular customers companies.

Let us give an example of airlines to organize loyalty programs for frequent flyers. The British Airways Executive program ranks as a Blue Class Passenger, then Silver and Gold. US Airways took this concept a little further with the launch of the Dividend Miles program, which also gives customers three statuses, plus Chairman's Preferred status for passengers whose annual flights exceed 100,000 miles (this theme is also beautifully played up in the movie “I Would Like to sky"). The German airline Lufthansa only awards Hon Cards to celebrities.

Pricing in consumer loyalty programs

It is important to remember that giving discounts is the most significant factor in reducing a company's profits.

Turning a loyalty program into a program low prices as a result of discounts

Giving discounts means giving away donations that you can recoup by increasing sales. For example, a company retail provides a 10% discount to all members of its loyalty program. Buyer John Doe, one of the participants in the loyalty program, chose a product for 100 pounds in the store, and the company's markup is 45% of the price of the product, that is, 45 pounds. However, John took advantage of the 10% discount and paid only £90 to the cashier. The company's profit from this purchase will be 35 pounds instead of 45. In order for the company's profit after the discount to not decrease, John's purchases must increase by 26.6%. Even if that customer's additional purchases increase, the company will only make up for what it lost by providing a discount. That is this approach does not bring profit to the company.

Multi-stage discounts

A multi-stage or incremental discount strategy involves increasing discounts depending on the volume of the purchase. For example, a manufacturer of industrial lighting lamps, which sell for £10 a pack, offers the following rebate scheme on annual purchases: The first 100 sets of lamps are sold at full price; all the following purchases - from 101 to 200 packs - 5% cheaper, from 201 to 300 packs - 10% cheaper. Purchase more than 300 packs and pay 20% off the original price. That is, with an increase in the number of purchases, the discount also increases. The effect of such a pricing strategy is that it encourages increasing purchases, the new level is more and more achievable.

Multidimensional pricing scheme

A multidimensional pricing scheme uses two or more pricing approaches (for example, an upfront payment and subsequent discounts for a certain period of time). The most famous example of such a scheme is the BahnCard of Deutsche Barm AG (the German national railway company), which became a huge success for the company for many years. At the time of the introduction of the new price system, the ticket price was 24 pfenig per 1 kilometer. The new strategy was for buyers of the BahnCard to pay a flat fee of DM 220 for the card, which entitles them to a 50% discount on any train ticket for one year. The more often the card is used, the cheaper the fare becomes, as the advance payment (220 marks) is spread over more kilometers.

This strategy has significantly increased the company's profits and greatly expanded the customer base. Similar multidimensional tariffs are offered by operators mobile communications, telecommunications companies.

Pricing based on time and loyalty

Time-Based and Loyalty Pricing provides discounts based on the length of time a consumer is in the program. For example, the Bell South's President's loyalty program, developed by one of the mobile operators, Bell South, offers its members to accumulate points, the number of which depends on the state of the consumer's accounts, the services he uses (voice mail, for example), and also on how how long he remains her client. The accumulated points are returned to the consumer in the form of various goods and services. Time and loyalty pricing is ideal for building a long-term relationship between customers and a company when it is based on a contract, the duration of the relationship can be measured and appropriate discounts offered. Regular payments by consumers help to pay off the discounts provided.

Discounts for multiple people

Discounts for several people are provided not for the main buyer, but for an additional attracted, if their purchases are connected. Southwest Airlines' Free Partner Flights and Trips and MCI's Friends and Family Programs are excellent examples. The purpose of these programs is not only to retain regular customers, but also to attract new members. This arrangement is often used for profit maximization and is ideal for companies and industries where variable costs are very low and costs are very high. fixed costs. Many companies involved in the organization of events use these schemes in their work.

Price Guarantees

A not-so-common mechanism in some retail stores where a company guarantees a customer a refund if they make a purchase and then find a similar item cheaper elsewhere.

Examples of successful loyalty programs

Company loyalty program Kawasaki Motors

Kawasaki Motors has been successfully operating in the UK market since 1974. She managed to win success and a stable position in the industry by offering a variety of motorcycle models, as well as other products. To differentiate the business, the company's leaders decided to invest in the creation of the Kawasaki Riders Club loyalty program to win the trust of customers and as a powerful tool for promoting products in the company's multi-level distribution system. In March 1993, the loyalty program was officially launched.

As a result:

– the desire of the participants to use their motorcycles as often as possible has increased

— 54% of customers are considered regular (before the launch of the loyalty program, this figure was only 30%)

- the opinion of the program participants is formulated as follows: "If Kawasaki was a guy, I would buy him a beer!"

Many companies are trying to replicate the success of Kawasaki Motors and its loyalty program. For example, Triumph built its Triumph Owners Club program around the principles of the Kawasaki Riders Club. And Honda has launched its Honda UK Riders Club loyalty program with benefits already tested by Kawasaki Motors.

club card Porsche card

Porsche stands not only for prestige and exclusivity, but above all for quality, technical innovation and design. In 1995, Porsche created the Porsche Card, which is restricted to Porsche owners only. Now only in Germany it is 120 thousand people. The club card is subject to the standards of the No Compromises company and guarantees an exclusive relationship with each owner, and also provides:

- Porsche Traveler Service

- Miles&More award miles

– emergency support service

- business service

- admission tickets cultural events

- gift service

- gourmet service

- car rental

- parking and car wash service

– insurance services

— financial benefits, information about the status of accounts

– telephone service 24/7

Club Volkswagen Club

In an ever-increasing competition, direct contact with the customer is becoming a necessity. Volkswagen is the first company that has managed to satisfy customers. Customer Club GmbG was created solely to manage the customer loyalty programs: the Volkswagen Club and the Audi A plus program.

In an effort to emphasize the VIP status of the participants, a complex package of privileges was created, including automobile and travel services, developed modern system accumulation of points, selected partners. Over the five years of its existence, 1.5 million customers have become members of the club, among the dealers of Volkswagen and Audi 95% are active partners of the Volkswagen Club and Audi A plus clubs.

All activities are focused on the main task - to satisfy the client. It is the devotion to customers that makes the concern constantly grow and develop.