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BizReport : Loyalty Marketing : September 12, 2006
The Most Effective Loyalty Programs
Customer appreciation – loyalty – programs have been around for about 100 years, but many are seeing an increase in participation as consumers become more savvy about price points, rebates and alternative currency. To get the best return on your program there are two directions to turn your loyalty program toward.
First, Combined Currency. This type of program gives customers alternatives to either/or programs. This is used a lot in the travel industry. According to a study by Wharton Marketing Professor Xavier Dreze and Professor Joseph C. Nunes of USCs Marshall School of Business travelers don’t put much stock in a plane ticket price of $500 or 10,000 frequent flyer miles. But, if you give them combined currency (dollars and miles) they will take advantage of the program. Taking a trip for $400 and 5,000 miles allows them to save money and create memories.
Next, Artificial Advancement. This type of program gives your customers the illusion of a head start. Instead of buying 8 items to get a freebie, require 10 purchases and give them a 2 purchase head start. The customer will still have to purchase 8 items but will participate more often because they are automatically closer to the goal.
Loyalty programs are on the upswing, and more businesses are getting involved. Create your own program, and watch your customer base grow, following these tips.
Tags: loyalty marketing, travel industry
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