Bring ‘Em Back for More

Whether you’re a seasoned cataloger or just getting started in this industry, you know that cultivating and maintaining your customer base is hard work. There are a number of ways you can acquire new customers, but if you want them to stick around, you’ve got to reward the ones who keep coming back.

Shari Altman, president of Altman Dedicated Direct, has more than 25 years of experience in direct marketing, with specific expertise in customer retention and loyalty marketing techniques. Matt Griffin, associate editor for Catalog Success, asked Altman to discuss some of the finer points of loyalty programs and what she’s seen work for catalogers over the years.

Q. What are a few reasons to institute a loyalty marketing program?
A. The one that supersedes anything else that merchants plan for specifically is to increase lifetime customer value (LCV). This is at the heart of what merchants want to do.

A secondary goal would be to increase referrals. People talk about loyalty and interpret buying behavior, like a customer purchasing more frequently, or having bigger orders or whatever as loyalty. But there’s been some real study on it, and at the core of it, the most loyal customers are the ones who recommend you to other people. Ultimately, if you get more people to recommend you to friends, family, colleagues, etc. that’s really where it’s at.

Another goal is to distinguish the brand, particularly if the cataloger is involved in a competitive arena. A loyalty program is a way to distinguish your brand and your catalog as different from others, thereby retaining your customers and keeping them from jumping ship.

The fourth goal I think is important, which goes along with improving LCV, is moving buyers up the ranks, in other words, segmenting your housefile. Your goals are to move one-time buyers to two-time buyers, getting two-time buyers to become repeaters and getting repeaters to provide referrals. Take whatever segment a customer exists in, and get him or her to move to the next level of involvement with your company.