Purpose:

Consider reasons to set up a program. Remember, the purpose of a frequent Buyer Program is not to discount, but to reward good customers, depending on their frequency or spending levels. Your purpose should be to reward the behavior you want: LOYAL TV, FREQUENCY and INCREASED SPENDING.

Goals:

Decide what you want to accomplish. Here are a list of goals you may want to consider:

  1. Encourage customers to become members of your new program.
  2. Remind customers to use their cards.
  3. Reward customers for their frequency and increased spending.
  4. Design a tier structure that will reward heavy buyers with privileges, un-announced specials, surprise gifts and preferential treatment.
  5. Shift the pattern of frequent buyers’ behavior by offering incentives and rewards for buying on off-peak hours or days.
  6. Use frequent Buyer to get new customers by advertising the effects of the frequent Buyer Program by advertising or word-of-mouth.

Enrollment Tactics:

If you want to collect information for marketing or analyzing purposes, you can use these ideas to get people to enroll in your program:

  1. Use a simple enrollment form that also collects buyer information such as addresses, phone numbers and email addresses, employer, spouse and kids’ names, hobbies. Include a temporary membership card if one will be mailed to them.
  2. Create a “New Membership Kit” which includes rules, awards, points, privileges, etc., if your program will be more complex.
  3. Make enrollment easy and attractive to the buyer by offering an incentive to join, such as a free small gift, lO’}’o off first purchase, or 50 points towards a prize.

Types of Program Structure

There are several ways to structure your frequent Buyer Program. You want to reward the behavior you desire, not just what the customer desires, like 2 for 1 specials, etc. Set up your program structure to reward different customers for different spending levels.

  1. Purchases: Reward customers based on the dollar amount of purchase. This is great to build sales during a certain period of time, like a slow season or a few weeks before a busy season (with the reward being an offer during a slower month). Spend $250 in the store between July 1 and July 30 and receive a gift certificate worth $10 off any purchase in August. Or a Mother’s Day Special: Buy two baskets before April 30th and receive a Mother’s Day basket for free or 50% off.
  2. Points: Point systems allow you to beat the competition without giving away the “store”. Buyers earn points for every dollar they spend in the store. You then determine what aware they receive at each point level. For example

    - 100 points – Free dessert
    - 350 points – $25 gift certificate from you or a Program Partner
    - 900 points – $50 gift certificate (like above)
    - 1000 points – Membership in your VIP Club
    - 1500 points – One night stay at a bed & breakfast 2500 points – Free round trip airfareYou can also design the point system to give 1 point for every visit to your store. Then for every $100 they spend, they get another 34 points, etc.

  3. Partnering: Ask for other companies to join you as Frequent Buyer Partners for two reasons: 1) It makes your program more exciting and interesting to your customers and 2) It serves as a new customer service vehicle where the customer learns about you from your Partner’s program.
  4. Privileges: You now possess an invaluable source of customer information in your Frequent Buyer Program. By offering privileges to membership you not only build customer loyalty, your profits are enhanced by the low cost of offering privileges instead of discounts.

Here are examples of privileges you could offer:

  • Free promotional items for opening up a new membership.
  • Free birthday cake, balloons, etc. for special occasions.
  • Donations to buyer’s favorite charities.
  • Personalized service: personal shopping questionnaire, reminders, etc.
  • Free shipping or special occasion cards.
  • Surprise privileges: Send an un-announced special offer to a good customer who happens to like something new you’re carrying (free scented candle, etc.)
  • Newsletters published quarterly that make your buyers feel like “family.” Sneak previews before offering items to the public.
  • Special shopping hours.
  • Free gift-wrapping.
  • Celebration of store anniversaries with wine and cheese, etc.
  • Discounts or special prizes for referring or bringing in friends.

Courtesy of Hight Performance Group, Inc.
Performance Improvement Solutions
(720) 304-0747, cathi@hightperformance.com