Banks may no longer give away free toasters when you open an account, but there are plenty of incentive programs that keep customers happy and coming back.
Customer incentive programs come in many forms. Buy two and get one free, frequent shopper points, and rebates are among the most common incentive programs. Of course, gifts and gift cards also can be an incentive to shop at your retail location.
To find out how to use gift cards effectively, read Offering Your Customers Gift Cards and Gift Certificates.
Here are some keys to developing a successful incentive program:
- Meet the needs and wishes of your specific target audience. A hobby shop’s giveaway of inexpensive Star Wars memorabilia won’t work in a pet shop as well as a free dog collar might. Give the people what they want.
- Increase customer loyalty. For years, knowing that children outgrow their shoes in a matter of months or even weeks, children’s shoe stores have offered a great discount on the tenth pair you purchase. Car washes and haircutters do this as well. If you sell something that customers need often, you can make sure that they return to your business by providing a similar loyalty incentive.
- Add a service or accessory. If you sell windows, offer a free cleaning. If you’re selling exercise equipment, provide an exercise video. If you sell handbags, you can include an umbrella to fit inside the bag. Low-cost perks can go a long way — just keep a close watch on your profit margin.
- Promote new items. In general, people do not like change. Therefore, if they are reluctant to try something new, add a freebie. This can also serve as a great free promotional gift with purchase.
- Boost slow seasons. Many business owners find that two-for-one specials and various other shopper incentives draw in customers during slower times of year.
- Combine with your marketing efforts. Have customers fill out a short survey to get a free soda, the above-mentioned umbrella, or other appropriate product. Your goal is to get more information on your customers, without crossing the line into personally identifiable information. It’s a worthwhile trade if you can fill your data bank with the likes and dislikes of your customers.
On the Internet, many companies offer incentive solutions to help you to design your incentive program; these solutions are sold for a fee. While these can benefit large companies with numerous locations and tens of thousands of customers, they may not be necessary for the small business owner. Just as you do not need to hire someone just to buy party favors, you do not need to hire someone to tell you what giveaways will work in your store. Having someone design and print coupon books, club cards, or other such materials should be very simple, as is using your own desk top printing program if you have one.
To see how a lumber company uses trips to the Bahamas to deepen customer relationships, read Just Rewards.
Ultimately, the most important part of an incentive program is doing the math and making sure that you come out ahead.
By the way, don’t forget your employees when you’re handing out incentives. To find out how employee programs can boost productivity, read The Power of Incentive Programs.