This Sunday is Valentine’s Day and I am pretty sure my wife would argue that I am the last person who should comment on anything related to romance. After all, I proposed to her to on Valentine’s Day in 1996, and it will probably come as no surprise that that has been the high point of our Valentine’s Day celebrations so far…
But I do know something about customer loyalty programs, and this special holiday also reminds us that establishing a long-term relationship with a customer can be much like courting a new love interest. I can tell you that, despite the “perfect” relationship my wife and I have, a well-timed card, flowers, call or text is incredibly important. Just letting someone know you are thinking about them can be a powerful communication. I can also tell you from experience that the lack of a well-timed card, flowers, call or text can be equally powerful.
My recommendation this time of year is to know your customer and communicate useful information that demonstrates you value them and your relationship.
Why Customer Loyalty Programs Matter
There are many benefits to creating a loyal customer base. We have a unique perspective on customer loyalty from working with so many vertical markets that use direct marketing. For all of them, their repeat customer business is what drives their success. Response rates can be as low as 0.4% for an acquisition mailing, but can easily top 4-5% in house file mailings. With non-profits, acquisition mail can be as low as 1% and donor file mailings can exceed 10%! Nearly every business survives on acquiring new customers and thrives on their core repeat customers.
This is where direct mail comes into play. The most effective customer loyalty programs are those that demonstrate you know something about the recipient, such as their transaction history, buying habits or preferences. The direct mail channel demonstrates effort, that this is an important communication regarding your relationship. I could easily send my wife an email letting her know about the Maroon 5 tickets I got her for Valentine’s Day this year, but wouldn’t a card be better? How is communicating with an important customer any different?
If you’re looking to build greater customer loyalty through direct mail, here are two important tips Valentine’s Day can teach us:
- Make sure the content is valuable to your customers
- Demonstrate effort in using what you know about your customers and when and how you communicate with them.
Finally, making the effort to respect customer preferences can’t be reiterated enough. This year, my bank (to remain nameless) automatically switched me to electronic statements, despite my preference to continue receiving statements in the mail. Apparently, they don’t feel that anything they could communicate to me is worth the $10 they spent annually on my monthly statements. In the spirit of that experience and Valentine’s Day, this video from Domtar seemed especially fitting and demonstrates how many customers will feel if you don’t make the effort to use paper-based communications when appropriate.
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