In an increasingly digital marketplace, customers have the ability to conduct online research and explore various buying options before making a purchase decision, now more than ever before. These buying choices have led to a generation of very finicky consumers, who expect not only a quality product or service at an affordable price but good customer service. Implementing a Customer VIP Program caters to those who are looking for that little extra special treatment.
However, to retain customers and gain their loyalty, customer satisfaction is no longer sufficient. As customer service expert Shep Hyken so aptly states it:
“There is a big difference between a satisfied customer and a loyal customer. Never settle for ‘Satisfied’.”
In other words, while customers do expect a great service experience throughout their buying journey, the extent to which they feel appreciated and rewarded for their business, combined with the values your company reflects, will determine their level of loyalty. Before we go into ways to gain a customer’s loyalty, let’s define customer loyalty and understand why it’s so important.
What is Customer Loyalty?
Customer loyalty indicates an ongoing positive relationship between a customer and a business. It’s what drives repeat purchases and prompts existing customers to choose your company over a competitor that is offering similar, if not identical, benefits.
Why is Customer Loyalty Important?
Here are few reasons why customer loyalty is important for the growth and success of your business:
Repeat Business – Loyal customers typically spend close to 70% more on products and services than new customers. This stems from a sense of trust that has developed over time. Once a customer likes and trusts the quality of your brand, they’re more likely to purchase in higher quantities.
Main Source of Revenue – Even though your most loyal customers only make up 20% of your audience, they provide up to 80% of your revenue!
Reduced Customer Acquisition Cost – It is 5 times easier to retain a current customer than acquire a new one.
Customer Marketing and Referrals – Not only do loyal customers keep coming back, they will spread awareness about your brand through word-of-mouth marketing. Existing customers also help bring in new customers, making them brand ambassadors for your company.
Protection from Competitors – When loyal customers choose to stick with your brand, it is money not spent with your competitor. No amount of paid advertising can replace a loyal customer.
Bottom line: Be sure to keep your loyal customers happy so they continue to purchase from your business and not your competitors. One of the ways you can ensure customer loyalty is by creating a tiered customer loyalty, aka VIP customer program.
Give Your Loyal Customers A VIP Program
Since as many as 84% of consumers say they’re more likely to stick with a brand that offers a loyalty program, you want to make sure to create a loyalty, appreciation, or VIP program if you don’t already have one. For customers who shop more frequently or spend higher amounts, your reciprocity should be both generous and personalized.
There are many models out there for rewarding customers, such as a points system, tiered rewards, punch-cards or a hybrid approach. Regardless of your business sector, a gesture that customers always appreciate is a custom, branded gift. Examples of this include:
A Holiday Greeting – A customized holiday greeting card or ecard that thanks a customer for their business throughout the year, combined with a branded gift set or gift certificate is always a very welcomed gift.
New Year’s Gifts – A new year’s business gift such as a branded calendar or planner, notepad and pen set or coffee thermos or mug, will keep your business top of mind throughout the year.
Hospitality/Spa Packages – If you’re in the hospitality, spa or beauty care business, a gift package with your company logo that includes an assortment of toiletries, personal care products and/or sundries that also provide a taste of the local culture are a great way to make a client feel valued and welcome. For VIP guests in higher spending categories, a customized robe or throw would make a great complimentary gift.
Medical/Dental Freebies – Popular freebies at medical offices include branded toothbrushes and paste or mouthwash samples, branded hand towels or neck rolls, free cream or lotions samples or free samples of new products that would encourage purchases in the future. For VIP customers, these gifts could be combined with restaurant gift cards or free admission to local events.
Business Traveler Gifts – Discerning business travelers are always on the lookout for not only useful products but products that are cool and trendy. Relevant gifts could include a messenger or laptop bag with a built-in device charger instead of just a tote bag, or an insulated bag that holds mugs or cups with reusable straws.
These are just a few tips that should set you on your way to thinking of your own creative ways to show your appreciation to loyal customers or clients. The sky’s the limit when it comes to sourcing branded and/or personalized gifts that are just right for your business and customers. It is well worth the investment when you provide gifts that reflect your particular industry and company brand, combined with a special “added touch” that will make even your most loyal supporters feel both valued and special.