Combating the Decline in Customer Loyalty
By Jared Markham
Studies have shown that customer loyalty is becoming a thing of the past. 30-40 years ago, those that bought Tide laundry detergent, for example, would never think of switching to another brand. Today it has been found that customer loyalty has declined significantly. People will switch cell phone carriers in order to get a new better plan that includes a flashy new phone. When consumers go to the grocery store, they will shop based on a combination of factors. They no longer care as much about brand loyalty. Sure, everyone has a company or product that they champion over others, but the decision to purchase has become more complicated. Better offerings have become king in decision land.
When people choose a restaurant to eat at, they will base their decision on price, how busy the restaurant is, the quality of food/service, the atmosphere, and what they get for free. Many restaurant chains have figured out that their customers like to have extra incentives to eat somewhere. Some incentives may include a free dinner on the customer's birthday or the more they buy the more rewards they get, such as airline or cruise miles. These incentives make consumers want to visit that place more or use that credit card more than any other.
Most customer loyalty programs have been found to take at least 18 months to take full effect. While some start working much quicker. A company that has a relatively fast acting customer loyalty program would be Hitcents.com. They work on the digital side of marketing, using email as a means of building loyalty. Opt-in loyalty programs like theirs have been found to increase restaurant sales in a matter of hours or days, instead of waiting weeks or months for the effects to take place. Restaurants like The Melting Pot and Firehouse Subs have used Hitcents.com's marketing campaign and found it to be quite effective for increasing sales in a short amount of time.
Customer loyalty programs are quite effective when applied to products or services that are used by consumers on a daily or weekly basis. The incentive must also be appealing enough to the consumer, in order to make it worth their while. Companies like Kroger and Speedway have found that offering a few cents off each gallon of gasoline along with in-store discounts by using their rewards card has been quite effective at keeping customers loyal.
All companies should strive to keep every customer that has ever done business with them. It is much less expensive to keep a customer than it is to get new ones, even if you have to give extra incentives to keep them coming back for more.
About the Author
Jared Markham has a marketing degree from Western Kentuck University and is actively involved in serveral marketing camaigns at any given time.
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