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In today’s competitive world the real question should be “How could you NOT have a loyalty rewards campaign”?
Now before we get into all the “stats” let us examine the common place example below.
Customer A is a patron of Restaurant A and Restaurant B. The restaurants sell a similar product, the price points are not too far apart, the service is acceptable and the food for the most part is satisfying. Customer A slightly prefers Restaurant A over Restaurant B, and for this reason Customer A visits Restaurant A more frequently.
One day, Restaurant B enrolls all their customers into a program which over time gives them access to extra food, food vouchers, VIP delivery service, personalized interactions, access to new product launches, group discounts, a birthday club, grand prize draws and more. Restaurant A does nothing and continues to run their business as per usual.
Now based on what we know about consumer behaviour, should we be surprised if suddenly Customer A finds himself at Restaurant B more than he had been in the past?
Things are looking good for Restaurant B
If Customer A starts spending more with Restaurant B, then what happens to the revenue of Restaurant A? Restaurant A may still do well; however, it is impossible for Customer A to be eating in Restaurant A and Restaurant B at the same time.
In addition to gaining new customers, Restaurant B gains something even more important. Restaurant B gains the goodwill of its customers, who will appreciate the treatment they are receiving from Restaurant B. When a customer feels valued/appreciated it will spur them on to become the biggest advocates for your business. Restaurant B currently resides in an exceptionally good place.
Things not the best for Restaurant A
Restaurant A is now in a ticklish situation, as even if they adopt the current strategy of Restaurant B it still will not have the same effect.
Why is this? Well, some customers will not see Restaurant A’s efforts as being genuine, as they will believe they are only doing it in order to compete with Restaurant B. Of course, customers will be more attracted to Restaurant A should they implement such a system, but it would have been better if Restaurant A made such a decision before Restaurant B.
“The customer experience extends far beyond the initial purchase”
Businesses are always ready to invest, but ever so often they forget to invest in the most important aspect of their business – Their Customers.
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