When I was working retail, my store was suffering from a market who increasingly wasn’t interested in buying our product: books. The internet, electronic reading, and the ever-shortening attention spans of our customers made selling books in a bookstore hard work.

While people still loved books, what reason did they have to visit our store to buy them?

Big box store to big box store, mass merchandiser to mass merchandiser, indie to the library, Amazon to Alibris, you could get books anywhere.

I remember the first day we heard about our new “loyalty program.” It was free and involved a “simple” registration process that resulted in a mostly unnecessary litle red card. We had conversion goals, use goals, and scripts. We had training and conditioning.

Like much of what my company did, it didn’t go over well. Customers didn’t understand the program. They didn’t understand how it benefitted them to carry the card in their wallets bulging with other mostly forgettable cards. They didn’t appreciate us asking every time if they had their card.

The card created a lot of things… but loyalty wasn’t one of them.

A recent study by ACI Worldwide, a marketer of electronic payment solutions, found that nearly a quarter of Americans have received a customer-loyalty reward they considered too small to take seriously. Only about a third had received a reward or promotion that prompted them to return to the store that offered it. And a stunning 44 percent said they’d actually had a negative experience with a loyalty program.
— Randy Myers, Loyalty Programs & Perks That Work

There are only two loyalty cards I carry now: one for my grocery store, the other for Starbucks.

But is it the card that fosters my loyalty… or something else about the experience?

I don’t “do the shopping” at any other grocery store. It’s the chain that I grew up with and it’s the biggest, nicest, and well-stocked store in our area. It also carries the widest selection of organic food products this side of our not-so-full-of-farmers farmer’s market.

I use the loyalty card… and I use its rewards. But I’m not sure if that’s a product of the card itself or just a part of my already present loyalty to that company.

I’ve only just begun using the Starbucks loyalty program. Their “card” is different in that it is also the form of payment. Easy. Their rewards system is based on “stars” (drinks) not dollars and plays like a game. They also make it all too easy to refill my card, making it feel like the money I spend there is just play money.

Yes, I am buying more coffee since I started using that program.

But what about you, dear entrepreneur?

How are you cultivating loyalty in your business?

It’s a widely known fact of business that it costs a heckuva lot more to find a new customer than it does to retain an old customer. But it’s easier than ever to lose your customer in a sea of competitors and ever-changing needs.

Most of us don’t sell products that “run out” and require restocking. Jewelry, art, clothing, and home decor are all things that require a conscious decision to buy not just an impulse to refill. Even services like coaching that can entail multiple sessions or work over time can appear to fulfill a finite need.

How can you as a business owner retain your customers, continually delight them, and create products that keep them coming back for more?

Clearly, a “loyalty program” is not the way to go (unless it is – by all means, you people are creative!). A punch card isn’t going to work for your handmade jewelry.

Understand that your customers are not just fly-by-night buyers, they’re collectors.

Treat your work and the people that buy it with the same respect a gallery treats its patrons. Entertain them, communicate with them, offer them bonuses, exclusives, and above & beyond service.

Help your customers feel special while at the same time helping them to see buying your work as an opportunity.

Take your customers on a journey.

Look at the first purchase a customer makes as a starting point. Where would they like to go next? Where should they go next? How can you take them there?

If you make a product, look for ways to round out the experience with add-on sales down the line. Also look for opportunities to take your customer from casual users to power users (simple earrings to statement necklace, for instance).

If you’re a service provider, pay attention to the new needs that “graduates” of your service have. Can you fill those? Can you create a next-level experience?

Incentives might work – but they’re not the only way.

Notice that neither of the strategies I provided are incentivized. You could easily create a discount or value-add make your offerings more enticing. But is it necessary? Is it even desired?

Your customers already know & trust you, many times all they need is the opportunity to stay loyal to you. Are you creating that chance?

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