Vol. 8 No. 2

How to convert occasional customers to loyal members through direct mail
The rule of thumb in marketing is that 20% of your customers generate 80% of your business. Customer Relationship Management (CRM) programs were designed to target those top customers. Loyalty clubs, member cards and newsletters are some of the tools that are used for marketing to this customer segment. Airlines, chain stores and credit card companies are big users of loyalty marketing.

So how do you go about developing a loyalty program if you’re not Mastercard? The fact is any size or type of business can build a successful loyalty program. The first step is to grow your in-house database. Getting a customer’s name, address and phone number is only the beginning. You need to know more about each customer so you can communicate on one to one basis with relevant information. You want to make a customer feel they are special. This triggers one of the strongest emotional motivators…exclusivity.

Here are some ideas on how to turn customers into members who buy from you becuause of loyalty.

Birthday Clubs and reward cards are great ways to build customer loyalty.
Start a birthday club. One of the most exclusive days to anyone is their birthday. Most people don’t share the same birthday with somebody they know. It’s special to them. They’ll share it with you if you ask.

Design a postcard for signing up new birthday club members. Make an offer of a free gift or discount during their birthday month. The card can be mailed to target customers or handed to them at the point of purchase. It should capture name, address, phone, e-mail and birth date. You might try to learn about their job, hobbies or favorite food for more personalized communications. Include a privacy notice that promises not to share this data.

Enter the information into your database. If you don’t have the time or expertise for data entry, hire a vendor that does. Then once a month download a file of upcoming birthdays and send out your birthday gift cards. The gift or reward you choose should be relevant to your brand and valued by the customer. It should also increase the potential profitability of doing business with them.

One national restaurant chain has created a successful kids club. They offer a free kids meal during the child’s birthday month. Birthday postcards are timed to arrive in the mail just before the first of each month. On average, three to four full paying guests will accompany the birthday child for the free meal.

The cards are redeemed at above average response rates of 8-10%. They generate repeat customer sales even during slow months. The kids club database can be used to target their families for other promotions throughout the year. Similar programs could be used for adult birthdays or wedding anniversaries.

Reward your customers. Create a member card that tracks purchases. It could be as simple as a punch card – the type used by many coffee shops - or a plastic version with a barcode that can be scanned. Assign a member number to each customer so they can be easily searched in the database. Cards can be personalized, numbered or barcoded with inkjet or laser image technology. Sophisticated database software can help you capture lifestyle and buying information that can be used to personalize future marketing efforts.

Rewards can be based on dollars spent, store visits, years of membership. Mail a reward coupon or gift card that can be easily used and enjoyed by the individual. Over 50% of incentive programs now use a gift card or certificate to reward top customers.

Delight your top customers. A delighter is one of those things that a customer doesn’t expect but that can provide a great deal of customer satisfaction. They work best if you can identify what your customer really values. You could capture this data from lifestyle questions on your initial member sign up form or a follow up survey. Examples of delighters are baked cookies, fresh flowers or a favorite music CD.

Building a better database is the key to starting any CRM/loyalty program. It can be as rewarding to you as it is to the customer.

For more information about developing a member card program call 608-884-3452 or e-mail info@ammailing.com.