Creating Loyalty Out of Free Offers & Coupon Programs

  • Dec 8, 2011

aim for loyal customers, not price shoppersAustin, Texas:  Anyone who has read my blog posts over the past few years knows that I am not a big fan of using coupons to attract a loyal customer base.

Coupons may be an ideal way of introducing your company or moving slow-sellers, closeouts or year-end merchandise, but it attracts the wrong type of customer for which you can build a successful business.

 

Coupon offers tend to attract:

1) Price shoppers.

2) Bargain hunters.

3) Coupon Cutters.

4) Low-Profits.

These are all nice folks, but you need loyal customers, not someone that only buys from you when you have the lowest price and offer merchandise at below-cost prices.

You need profitable customers.  Not just customers.

That being said, many companies are still offering coupons and free offers as a marketing opportunity–in the newspaper, on websites, Facebook pages, Twitter, etc.

If you will be using couponing or free offers as a way of building traffic, at least put a loyalty program vehicle into your customers’ hands.

Make it the focal point of the transaction.  For example, “Thank you for trying our sub.  Here is a loyalty card to encourage you to come back again…and here are three free punches to get you started.”

Or, “Thank you for ordering XYZ online.  Please click here to enter our Frequent Shopper Program.  You will be awarded with 20 Free Points just for enrolling….”

Do not let this opportunity pass you buy.  You are paying dearly for this trial usage.  You might as well capitalize on it..and give yourself a shot at creating loyalty.

One division of our company has done thousands of grand openings for convenience stores in the past, and too often the stores would fail to utilize a loyalty program at this time.  They might have spent thousands of dollars on radio spots, free hot dogs and cokes, clowns, raffle prizes, decorations, newspaper ads, etc. – but many would come up short in offering these customers an opportunity of coming back with a loyalty reward.

When we had tracked the stores that ran a loyalty program at the time of the grand opening to those that didn’t, and same-store sales increases were over 22% for the first six months of the store’s opening vs. the stores who did not run a loyalty at the time of opening. Why run a slow opening when you can have immediate impact on your bottom line?  Your rent and labor costs are the same whether you have a line of traffic or none at all. 

Think loyalty from the start.

Encourage trial of your product or service…but without loyalty, your business is doomed for failure.

Happy Promoting!


  • Category: Blog, Loyalty Marketing/Frequency Programs
  • Tags: customer loyalty, grand opening ideas, ideas to attract more loyal customers, increasing consumer loyalty, loyalty incenitves, loyalty programs