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Golf Clubs and Loyalty Programs

The Loyalty Program: a key CRM element

Nearly 75 percent of shoppers belong to at least one loyalty program. Does your club offer such a patronage incentive plan as a means of maintaining customer relations management (CRM)?

Loyalty programs are extremely important: A retail loyalty program study done by Carlson Marketing in 2007 showed that 63% of customers are more likely to use a particular firm’s products and services more frequently. One way retailers are hoping to get customers back into their stores, is by offering all sorts of rewards programs and in-store bonuses to their most loyal customers.

In 2008, coffee giant Starbucks rolled out a rewards program that offers members all sorts of extras, including free coffee refills and two hours of in-store Wi-Fi wireless Internet access, among other perks. Lodging chain Red Lion Hotels recently launched a loyalty program, offering 10 points per dollar spent on room rates and in-room charges. [Members who rack up 10,000 points will get a free night at the hotel.]

Loyalty programs come in many forms: frequent-buyer programs, frequent-player cards and frequent-dining coupons are just a few examples used by golf clubs. It’s a loyalty craze, and done intelligently, it’s great way to reward golfers and guests while also integrating a method of keeping your database up to date. Here are six steps from Marketing Sherpa to help you assess the value of your loyalty program from a customer’s perspective:

Step #1. Research your customer base Emotionless as raw data is, it can reveal some truths and trends about a customer’s buying behavior and inspirations. This requires effective database analysis and segmentation. But companies often fail to ask their customers enough questions. Even a range of traditional marketing research tools—like focus groups, short online polls and surveys—fail. What customers say and do often don’t correlate.

Step #2. Capture qualitative data Examine your customers’ actual behavior to determine relevancy and value. Loyalty is not just transactional. Captured data must go beyond an analysis of sales figures. The emotional triggers that lead to a particular buying decision are just as important as the hard statistics. For instance, you should know how a customer perceives your loyalty program from inception to the end of its lifetime and how a customer interacts with your brand. Knowing the treatment and experience customers have when engaging with the company’s employees, partners, products and services is vital. Supported by quantitative data, it’s possible to find the overlap between what a customer says and does. You need to know each customer as an individual. Some customers may have higher expectations than others, such as frequent-flier programs. Higher-value customers, for example, won’t necessarily want to receive discounts like those typically offered in retail outlets at the point of sale. Marketers need to become each customer’s best friend and capture personal data that reveals more about each individual.

Step #3. Maintain ongoing dialogues It’s not possible to know anyone well without having some form of continual dialogue with them. Encourage your customers to interact with you frequently. They might prefer to speak with a rep in a contact center, or communicate with you via the Web, or through a brick-and-mortar outlet. Each interaction presents an opportunity to gain more information about them, to find out about their lifestyles and what they value. It helps you to personalize the communication process. Indeed, the ideal discussion should feel like a one-to-one dialogue. Some companies make the mistake of using customer data aggressively. Loyalty programs should pull customers toward the brand by adding perceived value. A push model will often put customers off; they will tell you to go away and perhaps leave for a competitor. Give customers more control over the preferences, frequency, timeliness and means of dialogue.

Step #4. Make program simple Loyalty programs need to be easy to join and understand. They should be accessible across all the relevant touch points with customers. The programs should encourage consumers to join and remain loyal to that program only—not several at a time. “Too many organizations require the customer to provide all of the input upfront, and the customer does not see any value-add,” says Patrick McHugh, Executive VP, Email Marketing and Loyalty Specialist, Neolane. “Marketers view loyalty cards as a way to get to know the customer better, but they need to use it for the benefit of the customer as well as for that of the business.” Make it easy for everyone to redeem rewards, as well, and offer alternative rewards available if you run out of promoted ones. Otherwise, customers might become disgruntled rather than loyal.

Step #5. Reward Any loyalty initiative should be seen as a bonus. People generally like the idea of being loyal to successful brands, but much depends on how value is delivered and attained. Be careful -- rewards and incentives can also be seen as bribery, particularly in the B-to-B sector. In some cases, like banks, new customers are often treated better than older ones, whose value is seen as less. The loyalty of older customers should never be overlooked. Customers know it costs them something to be involved. Make rewards attainable and justifiable. Make them fair. Points aren’t always seen as valuable. Higher-spending customers may be influenced more by softer benefits. For instance, a B-to-B customer may respond more to free delivery of services, while a B-to-C customer might appreciate an upgrade from economy to club class on an airline.

Step #6. Monitor and review Establish performance levels and targets, based on your customer information. Needs and perceptions of value and expectations will change over time. Then stay dynamic, innovative and in step with your customers.

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