Loyalty

The concept of loyalty is fundamental for SMEs, even more than for large companies. Aware that acquiring new clients is more difficult and expensive than retaining those who have already reached the entrepreneurial shores, small and large organizations have plans and measures at their disposal to build loyalty with their precious portfolio. But these programs require organization, conviction and good advice. And, of course, good service. Financial reasons to achieve happy customers.

There are marketing concepts that, in the eyes of SMEs, seem designed to another measure: that of large organizations. However, this is not the case. Customer loyalty is even more important for SMEs than for large companies. The latter, with easy access to the media and advertising campaigns, can afford a high turnover of their clientele. On the other hand, an SME needs to build customer loyalty, make them buy from it a second and third time. Especially if they have niche policies and must retain their top twenty or thirty clients.

An old marketing slogan goes, that it is harder to sell five old products to a new customer, than it is to sell five new products to an old customer. Ultimately, experts argue that everything that the literature says on the subject, can be applied to both a corporation and a chain of restaurants or to a micro-business. “Loyalty strategies are always problematic since it is very difficult to know how much is earned after investing in a program. But, beyond being difficult to measure, loyalty is always a very good business, ”says the director of Moebius Marketing, Martín Blanco.

The positive thing about starting to develop loyalty plans is that planning is part of a company's commercial policy and not isolated actions when storms are on the horizon. "The most important challenge is to insert SMEs into this new paradigm, making entrepreneurs aware that loyalty plans are investments, the return of which is estimated in the medium term", says Guillermo Soules, professor of the Marketing career at the University Institution Argentine School of Business (IEUAN).

The starting point of a loyalty plan is to differentiate the spectrum of customers from the business itself: on the one hand, end consumers (B2C); on the other: companies and the distribution channel (B2B), understanding specific actions for each, Soules proposes.

The second step is to measure, that is, to investigate the behavior of consumers to identify the higher expectations of customers and when dealing with the final consumer, the third point is the personalization of attention in products and services, generating the effect of belonging-satisfaction. "The key success factor is the permanent measurement of each action so that feedback is the tool for adjusting the plan," says Soules.

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The fourth step is to ensure that, based on satisfaction, habitual consumption is achieved, an action linked to the follow-up of customers. The recommended actions at this stage are promotional ones. "In the case of B2B businesses, or SMEs, that work directly with the distribution channel, especially mass consumption, the loyalty process passes in its third step, through the development of distributors and customers", says Soules.

Conserve versus win

Organizations are often not very attentive to the churn rate. It is a serious mistake. “It is nine or ten times more expensive to get someone who does not know the company to buy you a product or service,” anticipates Blanco. “98% of SMEs do not know who their clients are, not even the best ones. Then they end up serving everyone more or less badly, or regularly well. One of the problems is that when they disappear, the company does not know where to go to look for them ”, she adds.

So, the first objective is to have a good database of clients or potential clients, the only tool that allows to attract them again. "While for SMEs the massive campaigns do not close in terms of cost-benefit, the intelligent database is strategic," says Blanco.

The first step is to build an ABC customer curve ordered according to different criteria. As generally 30% of customers generate between 60-70% of the company's turnover, it is necessary to know how to distinguish between customers A of B and C. For example, if it is a firm that has a delivery system and an order overflow situation is generated, one option is to tell everyone that the delivery will take 45 minutes. Thus, there is a risk of arriving on time for a customer C and losing A. Instead, a smart database can quickly distinguish A to give it the best service.

This database also allows you to know how each customer is transacting. “And if one day she disappears, you can go out and look for her, find out if she went to the competition or because she received bad treatment. The correct noticia is that this decision requires a basic technology that is not expensive. A computer with a program that allows this to be regulated costs about $ 1.000. Loyalty programs start from understanding their importance and the needs of the business ”, she adds.

Strategies

To implement a loyalty plan, it is essential that the heads of the company are convinced that it is a profitability-oriented program, and their unconditional support must be counted on.

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A basic condition is to have fluent communication, be it by phone or a price list that makes contact with customers every month, whether they buy or not. For example, sending a price list with the offer of the month is very important. "But the offer does not have to be a product that is useless or that cannot be placed on the market, but the other way around, it has to be the main product of the company", suggests the director of the Apyme Training Institute, Juan Carlos Lopez.

The end of the year is a good opportunity to give customers a gift with the good luck card. The gift can be from the traditional calendar to a box of the best champagne. "The important thing is that on the Christmas tree there is a personalized card from your company," advises López.

The list of tools available to SMEs to care for and entertain their customers is long. “Permanence discounts are a good option. For example, if a customer stays for six months or a year, a percentage of their monthly payment or subscription can be deducted. At the University of Flores, seen as a company, we have loyalty programs based on the price variable: discounts of 10% in the renewal of enrollment for those who adhere to the automatic debit or pay in advance ", says Víctor Kertész, Director of New Projects of the UFLO. Another option to retain customers is to offer discounts in different places (restaurants, shops, gyms). However, it must be taken into account that "no loyalty plan works if the service or product that is provided is not good", warns Kertész.

Another important point is that, within the framework of a LoyaltyIt is not about giving away anything, but something that the customer really values. It can be discounts (they are always welcome), products or services, but they have to do with the profile or activity of the client or the company. The accumulation of points is generally diluted because the prize is usually unattainable.

It is often difficult to measure costs of these programs and their benefits. But a relative calculation can be done. “If a client enters and stays for two years, the benefit should be higher. Additionally, the two key things that are needed to implement such a program are administrative neatness for good follow-up, program control, and good communication. None of these points is expensive or difficult to implement, ”says Kertész.

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Other options

Beyond the usual loyalty programs (cards, brochures, interactive emails, gifts), there are other less traditional ones that are easily applicable for SMEs. “A great loyalty mechanism is to maintain purchase levels in the same period of the month, either with discounts or by making payment conditions more flexible. This forces customers to buy the same thing every month and it is very important when working with distributors, ”says Juan Carlos López.

In short, the monthly offers, periodic telephone calls to customers to make use of this offer, and the proposed combination of discount plus payment plan, generate very interesting customer loyalty conditions, easy to implement and at low cost. Of course, you have to take into account the type of products that are being offered. If it is an SME that manufactures canvas pools, this is not the time to offer discounts and payment plans, since at this time the demand is covered.

From inside

To get started in customer loyalty, first, you have to start with the company itself and, more precisely, with the management of its top managers. “Where is the management in a company?. “By two essential paths: the structure and the processes,. These two paths make up what is called the activity of the company. That is, we are what we do, not what we say. Our ideas can be very good, but if we don't have the proper means to channel them, they fade. In conclusion, customer loyalty is a problem for the entire company, for which it must first worry about the loyalty of its people and the optimization of its processes ", suggests the SME consultant Roberto Binetti.

Article published by: By: Daniela Villaro in "El Cronista" (1/12/2005)

I am a dreamer and in my dreams I believe that a better world is possible, that no one knows more than anyone, we all learn from everyone. I love gastronomy, numbers, teaching and sharing all the little I know, because by sharing I also learn. "Let's all go together from foundation to success"
Loyalty
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