As consumers, we may feel that customer clubs have been around for as long as we can remember, but in fact, the idea of customer clubs first became a reality in the late 70s in America. American Airlines was a pioneer in customer club when it launched its frequent flyer program. The program was launched in the late 1970s when the US government took steps to reduce airline barriers created by federal regulations through the Airline Deregulation Act. As a result of this deregulation, competition increased and airlines sought improvements to increase their market share. In May 1981, American Airlines took a step that made this big difference, launching its Customer Club, which allowed passengers to accumulate miles and exchange them for tickets and other benefits. This program currently has more than 67 million members.
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What is a customer club?
A customer club is a program that provides benefits to a special group of customers from among the business’s current customers in exchange for customer loyalty to the business, and that is why these programs are called loyalty programs in America. The aforementioned benefits can be provided in the form of coupons, free products, benefits that can be obtained through other companies, etc. A customer club encourages your customers to continue buying from your business, regardless of whether you have a physical store or an e-commerce website.
Why is starting a customer club good for your business? If we analyze the data related to returning customers, we will reach a simple answer.
Did you know that the cost of acquiring a new customer is 6-7 times the cost of selling to an existing customer? In addition, an existing customer buys almost 60% more than a new customer! Of course, this data is about all customers of a business, when we talk about customer club members, the data gets even better. On average, a business that can successfully increase the return rate of its customers by only 5% will enjoy a 95% increase in profits.
Is your business suitable for setting up a customer club?
When we check the numbers, it’s clear that starting a customer club is a positive and profitable endeavor, but are all businesses suitable for this? There are cases in which setting up a customer club will not be effective, these are businesses whose customers make their purchases intermittently. In these cases, the business cannot keep its customers coming back and thus be able to provide benefits to its customers. Examples of businesses that are not suitable for setting up a customer club are businesses in the field of home renovation, lawyers, etc.
Initial collection of information and setting up a customer club
An important step in creating the best customer club is the initial planning stage. Collecting data about the buying habits of your current customers is very important. The first step is to find your most profitable customers, which usually make up 10-20% of your total customers, which according to statistics provide almost 80% of your business’s total profit. If your business uses a CRM system, your initial research will be much easier. After you’ve developed a profile of the type of customers you’re interested in, you need to create a program that fits their needs. For example, if a jewelry store finds that its best customers buy a particular diamond, then the business’s customer club benefits should be tied to that product.
In terms of customer club structure, it is suggested to use a simple and structured point system. As soon as the customer reaches a certain number of points, he will get the benefit defined by you. The simpler the system is to understand, the better it will work. You need to think carefully about what your customers will get in return for their loyalty to your business. A customer club that does not provide real value to its customers cannot keep them coming back and buying again.
Note: It is highly recommended to create partnerships with other businesses and companies in this field. Offer your customers a joint club that allows them to use their points in one way and receive benefits from other businesses. Of course, this requires thinking and organizing before implementation, but the value provided to your customers in this way will be great. Naturally, it is a big advantage to partner with businesses that can complement your product, such as a car dealership and a gasoline brand.
The customer must be aware of the customer club and its benefits
The customer’s awareness of the existence of the customer club and the value it can provide to them is the basis of the success of all types of customer clubs. Supermarkets and fashion chains, for example, tell their cashiers to ask customers if they are members of the customer club, and if they are not, the cashier tries to convince the customer to join the customer club by explaining It will have benefits that they will benefit from.
Use all your business tools to remind customers about the existence of the customer club and its relationship with them. Some of the tools you can use for your customer club include your business website, your distribution list, voice messages, etc.
Learning buying habits and constant improvement
One of the clear benefits of a customer club, in addition to the high value in directly increasing profitability, is the large amount of data collected on the purchasing habits of your best customers. It is a goldmine of information that allows you to make business decisions that can pay off in the short term. You can see, for example, how supermarket chains use the information collected about their customers by sending personalized coupons to the most valuable customer groups.
After setting up a customer club in your business, it is very important to continuously learn the buying habits of customers and to spend time continuously to optimize the routines.
Club of customers of large companies
There are many examples of customer clubs in the world that can be inspired, from large and well-known businesses to start-ups and small businesses. In this section, we want to take a look at some customer clubs of large companies, which are also called loyalty programs, as mentioned earlier, around the world.
In the Starbucks Rewards program, every purchase brings customers closer to a free meal and drink. To get Starbucks loyalty stars, you must order your product or pay using special applications.
Using related mobile apps to manage customer loyalty programs is common among many stores today, but when Starbucks first launched Starbucks Rewards, they were considered industry leaders.
If your business can have a customer club app, it can be a great way to collect and centralize customer data and transactions. This way, you’re not only making it easier for customers to order and pay without having to wait or sign up each time, but you’re also collecting data about customer behavior and preferences that can be They are used for marketing activities.
2- Virgin Atlantic Flying Club
Earning kilometers (or miles) while flying and using them for future flights is one of the customer club programs that all airlines do, but some companies go beyond this.
Virgin Atlantic, for example, has introduced a flight club as its loyalty program that allows customers to earn Tier Points. Tier is a category that has three types; Red club, silver club, and gold club. Each of these categories offers different benefits to the most loyal customers.
To make sure their customers know exactly the requirements and benefits of each level, they have created a page dedicated to this topic. Of course, the main reason behind this loyalty program is to get the customer to use your service by offering different benefits in the early stages.
3- Amazon Prime
Amazon Prime is a premium membership on the Amazon platform that offers various benefits to its regular buyers and costs $119 per year, along with free 2-day shipping on various products. Although this doesn’t sound like a loyalty program, since it still involves a paid membership, Amazon Prime is a great example of providing enough value to repeat customers in a way that benefits them. to follow
From Amazon’s point of view, although their Prime program causes them to lose something like 1-2 billion dollars a year, they make up for this amount of money through continuously increased shopping transactions, so On average, a Prime member spends approximately $1,500 per year, while a non-Prime member spends approximately $625 per year.
4- The North Face VIPeak
The North Face, an American clothing store, has a VIPeak Rewards program that allows its loyal customers to “turn their passion for adventure into real rewards.”
This loyalty program traditionally gives customers points with every purchase they make. For example, for every $1 you spend on their site, you get 10 Peak Points. If you buy from their rhinestones, you will get less points.
In addition to points based on purchases, you can also earn points by attending special events held by The North Face, such as attending specific locations, downloading their app, and the like. The points you earn can then be redeemed for unique travel experiences, who hasn’t been craving trekking in Nepal?!
Why does The North Face Customer Club and Loyalty Program work? First of all, the scheme does not offer any blanket discounts on products but rather speaks directly to their loyal customers and offers them a personalized experience that exactly suits their individual needs.
5- Sephora Beauty Insider
There is no doubt that customer clubs and loyalty programs are very popular in the beauty industry. One of the most popular in this field is Sephora’s Beauty Insider Rewards program.
It is a traditional points-based system where customers get points for every purchase they make. The main reason for the success of this scheme is that it allows members to decide how to use their points. There is a section called Reward Bazaar, where every Tuesday and Thursday there are different prizes to receive in this section.
6- Annmarie Gianni Skin Care Rewards
When you are one of the giants of the industry like Sephora, launching and succeeding a customer club seems to be an easier task, but what about businesses that have a smaller scale? How can they benefit from the customer club? Let’s take a look at Ann Marie Gianni, a small beauty and skincare business.
They have created a customer loyalty program based on a series of attractive offers offered to customers who take a quiz on their website called “What is your skin score?” Among other things, they’re offering a sample kit for the price of your purchase with free shipping, a free e-book, a $10 coupon code for your next purchase, and a money-back guarantee.
As it turned out, the combination of a quiz and an attractive offer can be powerful, because they were able to earn $200,000 and get 20,258 new leads within 2 months.
7- Uber Rewards
From UberX to UberLUX, UberBLACK, and UberSUV, Uber offers a wide range of options for its customers, all tailored to their individual needs. Another critical part of Uber’s marketing strategy is Uber Rewards.
This loyalty program allows Uber users to earn points to use on several rewards, ranging from meals to free rides. It’s a program carefully designed to give Uber customers benefits that give them more time, flexibility, and control.
For example, some of the rewards offered by Uber include flexible cancellation, price protection, priority rides and support, etc. Get an overview of all the benefits you get with each level of membership. So far, we have learned many things about customer clubs and loyalty programs and we have seen examples of effective customer clubs from famous brands in the world. Now it’s time to see how we can implement a customer club and loyalty program that is suitable for our business.
How to create a customer loyalty system
Customer loyalty is not easily established. Customers are motivated by their goals, and for this reason, they will be loyal to a business that can best help them achieve their goals. It doesn’t matter if they have a positive past with your brand, if one of your competitors puts a better offer on the table for them, you will lose your customer. The following items can help your business stay ahead of the competition and build a large group of loyal customers.
1- Create a multi-channel customer service system
If you want your customers to be loyal to your brand, you must be able to align with your customers’ needs. Having a multi-channel customer service system is one of the best ways to stay connected with customers, especially when they need help. Customers will have more access to customer service teams, which will lead to more interaction with them. The more you interact with your customers, the more chances you have to influence their customer experience.
Using multiple channels for customer service also allows you to create an Omni Channel experience. Omni-channel experiences occur when the brand user experience is consistent across different user interfaces and devices. This increases customer satisfaction because it makes your customer service more user-friendly, which is exactly what you should want when your customers are helpless and need help.
Consider using help desk and live chat tools that can help your customer service team cover multiple channels simultaneously. For smaller teams, artificial intelligence software such as chatbots can do the bulk of the work of organizing and distributing recorded requests without the need to hire someone.
2- Raise your credibility through meaningful communication with customers
Research shows that approximately 60% of customers stop doing business with a brand after a poor customer service experience. In comparison, 67% of customer churn can be reduced by solving a customer service problem in the first contact. This means that your business can do no wrong, and if it ever does, you need to fix it quickly.
Loyal customers expect a positive experience every time they interact with your brand. They want to feel that you value them a lot (more than they value you). Any time they feel your business doesn’t appreciate them, you run the risk of losing them to competitors who are more than happy to do so.
A CRM is very useful in these cases because it can record the past experiences that the customer has had with your brand. The system stores messages such as emails and calls, along with personalized notes that contain specific information about the customer. This helps create a more personalized experience because employees can use important historical data collected from past interactions with customers.
3- Create added value
You’re not the only one looking for customer attention, your competitors are looking for the same thing. All your competitors are in a race to show your customers that they can best meet their needs. So how can you overcome them? Put your feet beyond the expectations of customers.
thinkJar research shows that 55% of consumers are willing to pay more for a guaranteed good experience. In addition to offering customer club benefits, you can do this by building a relationship with customers that goes beyond the moment of purchase. Adding value beyond the purchase shows your customers that you are invested in their lifestyle, not just their money.
One of the ways your business can add value to the customer experience is to hold events or contests that your target audience is interested in. For example, the energy drink brand Redbull has gained a lot of customers by sponsoring major sports events as well as different sports teams.
Another way to add value is to build a community of customers. This can be as simple as a knowledge base or forum for the discussion of ideas, or as complex as having a network of loyal customers. Take Harley Davidson for example. They have created a community of loyal customers and fans who recommend their brand across America and in all businesses and transactions. These communities make customers feel that they are members of a population that has a special social status for members of this group.
4- Share positive customer experiences
If you’re doing a good job of creating a positive customer experience, why not tell people about them? Collect customer feedback and publish your comments to inform others about the benefits your business can provide. Use your omni-channel communication system to communicate these stories through multiple mediums. Customers typically trust other customers more than your ads, so leveraging positive interactions is critical to maximizing customer value.
If you’re not sure where to find feedback, members of external review sites like Yelp give you access to tons of customer feedback in one thread. Consider using NPS and other feedback tools that can help you gather quality information about your brand. You can also encourage customers to share their testimonials, which can then be uploaded to your website for exposure.
5- Reward your customers
Customers who are loyal to your brand are also the most valuable customers of your business. Studies show that customers who have an emotional connection with your brand have 4 times more lifetime value than your average customers. These customers spend more time with your business and should be rewarded for this. Whatever it is, you need them the most.
This is where customer clubs and loyalty programs become vital to building customer loyalty. Research shows that 52% of loyal customers will join a loyalty program or customer club if offered. Customers who join the program pay more for your business because they get various benefits in return. They already enjoy buying from your business, so why not give them more reasons to continue doing so?
A simple answer to this question is that the cost of providing benefits without directly receiving anything in return can be very high. To be fair, this seems to be true when looking at individual purchases, but loyalty programs offer benefits to your business that go far beyond just one or two transactions. If you’re wondering if their costs are worth it, just take a look at the key benefits that customer clubs and loyalty programs can bring to you.
Customer club benefits and their loyalty programs
After you have created your products or services and started making money from your customers, you might think of starting a customer club. No matter what your business model is or what industry it operates in, you can always find a way to reward your loyal customers with additional and exclusive benefits.
You may already be a member of several customer clubs, for example, an airline customer club or a business referral program, but you may not know how to create one for your organization. In the ever-increasingly competitive and crowded business environment, a loyal customer club can be what sets you apart from the competition and keeps your customers buying from you. Brand customer club members typically buy 18% more than other customers, but that’s not the only reason you should start a customer club.
1- Customer return
Customer loyalty programs help keep customers engaged with your business, which plays a huge role in how likely customers are to stay and how much money they’ll spend.
In today’s era, customers don’t make their buying decisions based on price alone, they make their buying decisions based on the shared value, interaction, and emotional connection they share with the brand. Customer Clubs are a great way to engage with customers beyond the point of purchase to connect based on shared value and to provide more value to customers, something that makes them happier and more likely to buy from you. continue
2- More customer referrals
If your customers enjoy the benefits of being a customer club member, they will tell their friends and family about it, a more reliable advertising model than you! Referrals lead to new customers that are free for you to acquire and can generate more revenue for your business, as customers referred to your business by customer club members have a 37% higher return rate.
Keeping your business customers happy is much more cost-effective than churning and trying to acquire new customers it costs 5-25 times more to acquire a new customer than to retain an existing customer.
4- Content generated by users and reviews
Online customer reviews are almost as reliable as recommendations from friends and family. Customer clubs that use reviews and ratings on websites and social networks lead to trustworthiness and user-generated content from customers.
Setting up and designing customer club and customer loyalty program
1- Choose a good name
The first step in creating a successful customer club is choosing the right name. The name of this club or loyalty program should create a sense of curiosity and interest among customers and encourage them to join, at the same time, it should be different from other customer clubs and loyalty programs that customers are likely to belong to.
Your title should go beyond simply explaining that customers are getting a discount or bonus; The name should be able to create a sense of excitement in the customers for being part of it. As some suitable names in this field, the Beauty INSIDER program from the Sephora brand and the vegetarian food brand Vega under the title Rad(ish) Rewards can be mentioned. These unique and clever names point to various benefits but do not reveal them, thus making customers curious about them and interested in becoming a member.
2- Create a deeper meaning
Customers are skeptical of customer clubs and loyalty programs, thinking that they are just another way to trick customers into spending more for the business in question. Even if that’s the main goal of your customer club (because that’s the goal of most businesses, to make money), your job is to make it look like you’re about more than just money and get people thinking about your value proposition. To excite your customers.
Address the “why” behind your products or services to make your customer club as appealing as possible. The Amazon Prime membership we talked about earlier costs roughly $100 a year, but the value proposition of paying more isn’t just two days of free shipping. Amazon also offers its members many other related rewards, such as free TV series and movies or free shipping on various groceries from popular grocery stores, these are things that add more value to the customer than the money they pay. They bring
3- Reward different activities from customers
Another way to illustrate your commitment to the customer club beyond just purchases is to reward other customer activities. Customers who watch product videos, interact with your mobile app, follow and share your social media content, or subscribe to your blog are all valuable signs that a customer is engaging. They are with your brand, so reward them for doing this. This is what 75% of customers who are members of customer clubs want.
HubSpot’s customer advocacy program, HubStars, allows customers to earn points by completing various activities throughout the week, such as reading and responding to a blog post or engaging with a video on Facebook. For more challenging activities, customers can then exchange their points for the rewards they want.
4- Offer different prizes
Another way to provide more value to your loyal customers is to offer different rewards besides discounts. Customers who spend at a particular event or earn enough loyalty points can be rewarded with free tickets to various events and entertainment, free memberships to additional products and services, or even donations to charities of their choice. Exchange their names.
Lyft does this perfectly with its Round Up & Donate program. Riders can top up the cost of their ride by up to $1 and donate the extra money to a charity of their choice, making an impact while still using their services as normal.
5- Make points valuable
If you want customers to perform various activities to improve your customer club, you need to make these activities valuable in terms of points earned. Just like inbound marketing, if you’re asking customers for more money, you need to offer something of value in return to make sure the reward matches the expected activity and effort.
For example, if you include cashback as a reward in your loyalty program, assign a monetary value to your points so that customers can estimate how much money they can earn (and spend) by continuing. Visualize buying from you. Credit cards do a great job of illustrating dollar-for-dollar how points can be used, just look at any dollar-for-dollar points offer that can be redeemed for airline miles, groceries, gasoline, and gas. and… be
6- Structure benefits around your customers’ values
Value matters to customers 2/3 customers are more willing to spend with brands that stand with them on social and political issues they care about.
So make sure you factor this into your loyalty program. The TOMS shoe store donates a pair of shoes to a child in need for every purchase made by a customer. Knowing that providing resources to the developing world is important to their customers, they have gone above and beyond with new products that help important movements, such as animal health, maternal health, access to drinking water, and the protection of They look to get customers excited about helping in other ways.
7- Create multiple opportunities for customers to win prizes
Once you’ve set up your customer club, make sure to explain where possible how to join and the benefits of doing so. If customers receive rewards for shopping at your online store, write the number of points they can receive for that amount next to the price.
You may have experienced this when flying with an airline that offers rewards for a credit card. The flight attendants may have told you that you can get 30,000 kilometers for your next flight with this flight if you apply for this airline’s credit card. Other ways to do this include promoting the app on social media channels and adding push notifications to the site when customers complete an activity that rewards them.
8- Look for cooperation to create more attractive offers
What’s better than a prize? Of course, two prizes! A shared customer rewards program is a great way to put your brand in front of new prospects and provide more value to your loyal customers. Brands may offer their customers free access to two-brand partnerships they’ve launched, such as T-Mobile’s offer of a Netflix membership with the purchase of two or more phone lines.
9- Create a game
Everyone loves to play and compete, so use that winning spirit to keep customers engaged with your brand more and more. Many brands Gamify their customer clubs to create valuable interactions within the app, website, or at the point of purchase.
Points for gamification are easily translatable. Check out Treehouse, a business that teaches programming and app development and rewards interactive users with more and more points that lead to a badge, which users can display on their website and social network profiles. Showcase yourself socially to impress colleagues and potential employers with your skills.