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How to attract new clients by using an engaging loyalty program

How to attract new clients by using an engaging loyalty program

Reward customers for staying with you through COVID-19.

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Last year in Austin, TX, I was on stage at MITCON, positing how in the short term, payments would evolve away from paper currency, paper checks, and even plastic credit cards into digital and app-based mediums. I was thinking three to five years. Little did I (or for that matter, most people) project that in a few months, a global pandemic would cause consumer reluctance in using cash or handing someone their credit card for processing.

No one knew that in a few short months, we would change the way we as consumers do pretty much everything. We would be ordering take-out and delivery for meals instead of eating in; working out at home with videos from our trainers; working full-time from home; and performing significantly more repair work around the house, since we are seeing the flaws more often and have more time to meet the craftspeople who carry out the work.

If you follow me on LinkedIn, you have likely seen my regular updates on the state of franchising from a payments standpoint that we see at POLN8’s sister company, Franchise Payments Network (FPN). Most recently, as I am writing this, we are experiencing a 16.5 per cent increase in same-store processing dollars from our portfolio of franchisees in October 2020 compared to October 2019. Additionally, the average guest ticket has increased from $63.39 to $78.12, representing a 23 per cent increase in transaction size.

Touchless technology

The above growth numbers are being driven by helping merchants shift their technology to touchless methods. Service franchises who traditionally have taken checks or credit cards in front of their customers at time of deposit for new jobs or at completion are now employing methods where electronic invoices or payment pages are sent via text or email to the customer, even if they are standing in front of them.

“Be sure to sincerely thank your customers for coming in and sticking with you, especially when it was not always the easiest option to purchase from you”

Restaurants are using mobile apps and online ordering platforms so customers can order ahead and pay in advance for curbside pickup or delivery. Pay-at-the-counter restaurants are using mobile apps to pay via bar and QR codes that can be scanned at the POS, while dine-in is moving more to kiosks and mobile devices at the table.

On the loyalty side of the equation, we are advising franchisors to maximize their loyalty offerings. Just as franchisees want customers to be loyal to them, customers want to feel appreciated for sticking with the brand and changing their behaviors during shut-downs. Now is the time to thank the customer who stuck with the brand while also attracting new customers who may be unhappy with who they frequented before COVID-19.

From passive to active promoters

I am sure you have heard of the Net Promoter Score. The basic premise is to survey your customers and find out how likely they are to recommend your business to their friends and family (but, you don’t truly know if they do).

With a robust loyalty program, we turn Net Promoters into real promoters, rewarding customers who are loyal to you for bringing in their network of friends and family as new customers.

In one year, we have seen an increase in new loyalty members in one chain as high as 250 per cent, while totals of loyalty members show average ticket sizes to be 17 per cent higher than non-loyalty members. Loyalty members also shop 50 per cent more often to spend those extra dollars.

Most loyalty programs out there today are passive; meaning, they reward customers for their current behavior. Giving the customer a reward for coming in on the 10th visit is an example of just sitting back and waiting for them to come in. In this instance, you are simply giving away profits.

You want to change the customer’s behavior and reward them for doing something they are not currently doing (as in the above, for introducing friends and family to a brand). You want to get them to purchase something from you they have not thought of before (enter the 17 per cent average ticket growth). You want to lock them into your brand and come to you instead of your competition (the 50 per cent increase in frequency of visit).

Be loyal to loyalty

All of this can be done by tying your entire consumer marketing efforts into the loyalty program. Think of loyalty as the hub from where everything flows and is tracked back through actual purchases at the point of sale, no matter where it is (online, curbside, tableside, invoicing, or at the register). All of this can be accomplished with touchless technology at the POS or via a robust loyalty app that includes a payment feature.

With loyalty programs, you are trying to get customers to do more. Increase your share of their spending in your category. If you are a men’s hair salon and know your customers always get a hair cut every three to four weeks, set automated triggers as an example to send a message or coupon out three weeks after they missed you, as you know they went somewhere else last time and you want to make sure they return to you this time.

One last thing you should always do – and is sometimes the one thing that seals the deal – is to be sure to sincerely thank your customers for coming in and sticking with you, especially when it was not always the easiest option to purchase from you. Your customers are coming in because they like your product or service, but they are also coming in because they like you. Make sure they know they are appreciated.

THE AUTHOR

Tom Epstein is the CEO of Franchise Payments Network and POLN8.

AT A GLANCE

Established: 2006

Contact: Tom Epstein, tomepstein@steinhouseholdings.com

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