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Restaurants. Telephone companies, cell phone providers, and long-distance carriers. Credit card providers. I have three credit cards from Citibank that award American Airlines miles. I use them instead of cash or checks whenever I can. What do you need in order to get started A valid idea for some easy way to award points when customers spend money with you. This may take some doing in the retail area. At present, most people s wallets are crammed with various plastic cards. Few people will want to add more. How, then, can you award points My suggestion is the iDine method discussed in 9: by getting people to register their credit cards with you. Then you can award them points whenever they use these cards with you. Some practical plan for providing bene ts. There are really two types of bene ts: Immediate rewards, sometimes including preferred treatment Long-term rewards (like air miles), where the customer is saving toward an achievable long-term goal A lifetime value analysis that permits you to determine in advance whether the plan will make you more pro table or make you go broke. Some stores, like supermarkets, operate on very thin margins. They can t afford to give away anything substantial. Yet they have made loyalty programs work very well for them, as we will see. Some sophisticated software that maintains the points and redemptions, handles monthly reports to the customers, and reports to you. In most cases, companies have outsourced their loyalty programs. You really should work with a rm that has been through this process before and knows what can go wrong. A Web bene ts microsite where customers can come to see what they have earned and redeem points for rewards. Try, if possible, to use this Web site for your loyalty program instead of live operators. The customer service costs can eat up the pro ts from the program if you are not careful.
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Reports to the members that are made available on the Web, or sent by email if your customers prefer it. If you send monthly statements, your report can be printed on the statement. Airlines send statements through the mail and have found them to be quite costly. They are all trying to shift to Web-based reporting. A clear expiration date that is announced when your program begins, so that if it is not working out, you can gracefully exit. You can always extend the deadline, but you can get in real trouble if you try to cancel a program while many customers are holding onto hard-earned points. A promotion plan that aims at a very high utilization rate. The place to start is with your employees. Enroll them in the plan from the start with special bene ts. You want all your employees to look the customer in the eye and say, You really should be in this program. It is great. I am in it myself. Promote the plan in every possible way. The purpose of the plan is to modify customer behavior. You can do that only if customers are enrolled. Status levels, if appropriate, with appropriate status rewards. The reason for status levels is to get customers to work hard to achieve them. The Platinum program for American was 50,000 miles in a calendar year. I used to go crazy trying to meet this goal. I would take two legs on an American ight when a direct ight was available on other airlines just so that I did not end the year with 46,000 miles. Let s look at some examples of nonairline loyalty programs.
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