The majority of customers that visit your shop for the first time will never walk into your shop again.
As business owners, we do our best to offer the best customer experience and after the purchase takes place and the customer leaves our shop we pray for the customer to visit again.
I am Alex Kassab, a serial entrepreneur and one of the founders of Morelia Gourmet Paletas, a personalized and unique ice cream experience. We currently have 11 locations in the US and we are expanding. We use Como for our customer engagement and loyalty and our numbers speak for themselves: we count 100k members in our database, have a 40% loyalty penetration rate and the average spend of members is 10% higher than non-members.
Having a robust loyalty program, or what I call it rewards program is the best way to open a communication line with your customers and tell them about your story, brand, and value proposition.
Starbucks is known to have one of the most robust loyalty programs in the world with nearly 25MM active users which represent 53% of the total spend in their stores.
In this post, you will learn the Top 5 Strategies that helped (and still help) my business grow using our Loyalty Program – based on data and powered by Como.
1. Use RFM Segmentation to personalize your message
A customer that visits your shop every 2 weeks is different from a customer who visits you every 6 months. Also, someone who spends $150 per visit and someone who only spends $10 per visit is very different customers.
Many businesses send the same exact communication to both examples, which is a mistake and has an opportunity cost.
RFM helps you segment and identify your customers based on behavior.
But, what does RFM stand for?
RFM stands for Recency, Frequency, and Monetary. Explaining each component:
Recency: How long has it been since the last customer activity or transaction? In our case we measure purchases. Typically, the more a customer interacts with your brand, the more loyal the customer is.
Frequency: How often a customer has interacted with your brand within a specific time frame, for example, a year.
Monetary: This refers to the amount of money the customer has spent. The monetary value of the transactions.
After identifying each customer and assigning a value, we can assess what type of promotions or messaging each customer will be more likely to react to.
Luckily CRM’s like Como has this feature automated so you don’t have to slice your data. You can simply target the type of customer you want and personalize the message for each individual persona based on behavior.
2. Use SMS Marketing with Email Marketing
As business owners, we need to use the database we have of our customers with responsibility. Your customer is giving you permission for you to send your marketing communication and we ought to honor that permission by sending only relevant information.
This is violated by some marketers that send massive emails without any personalization and affects all of the industry.
I have received many customers saying thank you for reminding me to visit the shop this weekend, or thank you for sending me my favorite dipping. We know this based on customer behavior.
Having a mix of automated messages based on customer behavior and some messages with new product launches or new store openings or promoting a specific event is the perfect way to keep customers engaged and always looking for your communications.
3. Promote Products that incentivize the purchase of your core product
We never discount our main product. Similar to what Apple does, your main product should never be discounted to avoid eroding your brand. In our case, we sell Paletas (Ice Pops). We give away free dippings and free toppings but we never discount the Paleta itself.
Customers love free, and in order to receive free Dipping and a free topping, they need to buy a Paleta. Apple does the same with its iPhones and Macs. They discount the Airpods, not the iPhone or the Mac.
4. Get an app and use Push Notifications
We all have phones and today they have become an extension of ourselves. Having an app is important – no wonder we have brands like Starbucks with an amazing app that helps keep the brand top of mind.
We use Push Notifications and they are very efficient as they communicate the most important announcements and activities.
I have seen customers walking to our stores saying the app notified them about a new flavor and that was the reason they decided to visit.
5. Test, test, and more testing
Sometimes we don’t get offers or promotions right. Sometimes new flavor announcements don’t go as well as we planned.
But we are OK with that as the only way for us to learn what works and what does not work is by doing.
We test every day and we document every promotion or communication. This way we can go back and understand what happened to either repeat it or do some tweaks and try again.
These 5 strategies help us stay in touch with our loyal customers and get feedback on the spot and drive sales.