Hi There!
This is Shep Hyken Customer Service and Experience
Expert and on this video I'm going to talk
about charging your customers for loyalty.
Companies covet customer loyalty.
They understand the benefit to having loyal
customers.
Statistics show, over and over again, the
financial advantages to customer loyalty,
versus the continuous quest for new customers.
So how do some companies achieve customer
loyalty?
The company creates a loyalty program that
tracks their customers' purchases and rewards
customers for their repeat business.
For example, airlines give their loyal passengers
early boarding privileges, free upgrades and
points toward free trips.
Or a sandwich restaurant that gives the customer
a free sandwich on their tenth visit.
And, there are companies that build relationships
and deliver a level of customer service that
is so good that their customers wouldn't consider
going anywhere else.
Personally, this is my favorite.
Then there is a third way.
The customer pays the company for the privilege
of being a part of their loyalty program.
What a concept!
Seriously, this is powerful, if not interesting.
AMC Theatres loyalty program, called AMC Stubs,
charges their customers $12 a year to be a
member.
That's just $1 per month.
What do customers get for that?
AMC waives fees for online movie ticket purchases,
credits the customer $10 for every $100 spent
and gives free upgrades to larger popcorn
and drinks.
So, if you are the customer who paid to be
part of the loyalty program, why would you
waste your money and do business with any
other movie theatre?
Most people wouldn't.
Then there is my favorite, the Amazon.com
Prime program.
Amazon actually refers to this as a membership
program, but many of their customers, along
with industry experts, consider this to be
a loyalty program.
For an annual fee of $79, the customer gets
free two-day shipping, free movie streaming
and Kindle book rentals.
There's no tracking about how much business
the customer does with Amazon.
The benefit is the same for the customer who
buys one $10.00 book as for the customer who
spends thousands of dollars on merchandise.
So, how can this really be considered a loyalty
program?
My take on it is that the customer spends
enough money on the program that they will
think twice before doing business with one
of their competitors.
The customer may even look for reasons to
do business with Amazon, just to take advantage
of the membership fee.
And, here may be the most important part.
To get customers to pay this fee, Amazon has
to do two things so well, that the customer
views the $79 fee to be a bargain.
First, they are amazing retailers and sell
what customers want.
Second, they deliver amazing customer service.
That's a winning combination.So, here are
two questions for you to consider: Is your
company so good that your customers would
be willing to be loyal to you with or without
the incentive of a loyalty program -- or even
be willing to pay to be a part of a loyalty
program?
If the answer is "Yes," you are in some amazing
company.
Well, I hope you enjoyed this short lesson.
Please be sure to visit my website, which
is www.hyken.com.
There you'll find more information about my
speaking programs, as well as over 250 customer
service articles that you can read and share
with your colleagues.
Thank you very much for watching.
This is Shep Hyken, reminding you , to Always
Be Amazing.
