This blog is part 3 of a 3-part series: Maximize New Opportunities Through Current Customers. Catch-up here: Part 1 – Is Your Print Business Maximizing the Value of Your Customers?, Part 2 – How A Customer Reference Program Can Help You Sell More Print
As consumers, most of us are happy when we “earn” a bonus from buying stuff from a vendor. Whether it’s frequent flyer miles loyalty programs or cashback on credit card purchases, it feels good to get something extra for our purchase even if we know the cost of the “bonus” is hidden in the price we paid.
But does such a loyalty program work for B2C or B2B print sales?
Sure. Motivational incentives, positive reinforcement, and gamification are powerful psychological drivers of human behavior.
Offering customers something of value in exchange for their specific actions can build greater engagement, loyalty, and value. This objective should be one of the pillars of your company’s marketing strategy. With such rewards programs, incremental profits come from:
• Higher-order frequency
• Higher-order value (volume purchases, up-sell, and cross-sell)
• Increased retention/loyalty
Loyalty and reward programs can increase customer retention by 5%, which can boost profits by 25% or more. These programs open opportunities for cross-selling and up-selling, which not only builds higher order values but may also create new loyalties for multiple products or new applications. Greater brand advocacy by customers is also a benefit. Referrals and references also result because the rewarded customers feel good and may be more likely to share their experience with a friend or colleague.
Research data shows that 84% of buyers say they’re more likely to stay with a vendor that offers a loyalty program. Two-thirds say the ability to earn rewards changes their spending behavior. And 56% say they are willing to spend more with a vendor even if cheaper options exist.
Customer loyalty/rewards programs also help by creating a brand community for customers to feel a sense of belonging. As a bonus, customers may be motivated to provide contact info and relevant data for future marketing communications.
No business owner ever argued the claim that it costs less to sell to current customers than to acquire new ones. Current customers already know and like your offering so with greater incentives and recognition they may spend more with you.
If you don’t have a customer loyalty reward program, you may as well begin now.
There are several types of programs for you to consider, ranging from very basic to those fully integrated into your CRM or POS systems.
If your print shop serves individual consumers, consider a point-based loyalty program in which points can be redeemed for freebies, perks, or swag. Customers earn points from their purchases but also from sharing a post on social media, leaving reviews on Google, or just having a birthday. There’s a certain behavioral driver that comes from gamification and rewards points can work where there is a certain level of frequency of your buyers.
One of the advantages of points-based programs is that there is low risk and a low barrier to entry. They are fairly simple to implement, track and manage. They are also great for starting to collect permission-based data about your customers. A disadvantage is that there may not be enough value to attract top-tier customers and there is no instant gratification that some consumers demand. In addition, purely transactional benefits don’t build true loyalty.
A better option for your print business may be a tiered loyalty programs in which customers get different benefits depending on their volume of purchases and engagement. Customers earning into higher tiers get greater rewards. The main benefit of this approach is that it rewards your higher-value customers with better experiences than traditional programs. It encourages additional purchases as members want to achieve more exclusive status. You can customize the tiers any way you like.
Finally, a premium (fee-based) loyalty may also be attractive, especially for B2B print customers. With this strategy, customers get immediate and ongoing benefits for a participation fee. Think Amazon Prime.
Research shows that consumers are 62% more likely to spend more on a brand after joining a paid loyalty program. Sixty percent of buyers say instant discounts are a perk that motivates them to join premium loyalty programs. About 51% percent of retailers with premium loyalty programs consider program members to be at least four times more valuable than non-members.
Overall, loyalty programs can have relatively low risk and significant upside to capturing customers’ share-of-wallet and long-term retention. With a customized design, you can implement either a B2B or B2C print buying program that can drive more value and profit.
David Murphy is the founder and CEO of Nvent Marketing, a marketing agency specializing in digital marketing for the print industry. David has 30+ years of experience in the graphics and document print production industry. He has served as a board member and advisor to print organizations and associations including Sustainable Green Printing Partnership (SGP), Print Industries of America (PIA), Association for Print Technologies (APTECH), and Electronic Document Scholarship Foundation (EDSF). David was also awarded the Idealliance Soderstrom Society Award for Print Industry Leadership. David can be reached at email@example.com.