The other day, I came across an article titled “Opinion: The Cost of a Successful Loyalty Program” by Dan Durbin, a recently retired businessman. In this article, Durbin speaks on his experience when attempting to run a loyalty program, and considers some customer loyalty program ideas.
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At first, he struggled to find an example of a program that was capable of providing a margin that led to profits. But he buckled down and made adjustments that he felt he could maintain. These included:
Although facing steep competition from a growing competitor, Durbin and his loyalty program were successful at retaining those much-needed customers. After installing the loyalty program, his company’s margins grew by 1.5%, “and gross margin dollars [were] off the charts.”
While Durbin’s example of loyalty is within the B2C market, customer loyalty program ideas are often similar between B2C and B2B markets. Just look at the example of eCommerce. We’re all human, it seems.
I highly enjoyed Mr. Durbin’s story about the cost of a loyalty program and I hope you do, too. It reminded me that loyalty may seem fleeting, but if we really buckle down on our efforts to secure it, we can inspire, motivate, and reward everyone involved.
So, what’s the real cost of running a customer loyalty program, according to Durbin? I think the answer is “opportunity cost”.
In other words, how much incremental improvement might you be missing out on by NOT running a program?
To read Dan Durbin’s story, click here.
