How to effectively use a customer loyalty program

Chicago -- Ideas for loyalty in a competitive climate came fast and furious during an educational session here at the Orgill Fall Market.

The session, called "How to effectively use a customer loyalty program," was led by Theresa Neal, head of new business development for Eden Prairie, Minnesota-based Pro/Phase Marketing. The company's RepeatRewards program has a business relationship with Orgill, providing a menu of real-time loyalty services.

While customer retention is the driving motivation behind loyalty programs, Neal explained early that the key to success is getting people to join. "Your competitors have a program," she said. "You need a program to keep them coming back."

There is no silver bullet for loyalty program success, but there is a long and growing list of best practices or tricks of the trade. Neal pointed to several:

• The plastic cards or key tags (28 centers per key tag) play a valuable role. They serve as advertisements in the wallet.

• A loyalty program doesn't have to have a card. A phone number can be the key to track a customer.

• Birthdays are a huge opportunity for a marketing event (mail or e-mail).

• Take advantage of social media. "Here's the thing about Facebook and Twitter -- they are free."

Neal suggested that good programs give customers several options to sign up. She suggested a well-trafficked endcap of a high-volume product (window-washer fluid, for instance) with a conspicuous discount for loyalty-program members.

"You want the customers to say, 'How can I become a member?'" she said.