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Cementing Customer Relationships

The Value of a Great Loyalty Program

By Saurabh Swarup

No matter what your industry or business model is, one of the top goals for any retailer is securing customer loyalty. My company, Liquid Barcodes, specializes in managing loyalty, subscription and digital marketing programs. We work with some of the largest players in the world, like Shell, Valora, 7-11 and Circle K. I’d like to briefly share some of the concepts we’ve found essential in creating, maintaining and expanding a loyal customer base.

The key is creating connections with your customers. Through experience, we’ve identified six basic steps in what we’ve named the Customer Connection Cycle.

  1. Recruit – inform your customers about your loyalty program.
  2. Engage – onboard the customer to your loyalty program, incentivize them to activate the program via interactive gamification concepts and claim their rewards, make the program entertaining and establish points of connection.
  3. Promote – use a multi-channel approach to keep your program members informed about specials and incentives on a regular basis.
  4. In-store – encourage them to trade up to premium products and widen their spectrum of product purchases.
  5. Reward – provide incentives to bring customers back in more frequently.
  6. Analyze – utilize data generated by your program to identify your most valuable customers and tailor your rewards to keep them engaged and increase visit frequency.

Customer connection cycle:

How to execute your program

With the almost universal use of apps and ongoing technological advances, it is becoming ever easier to design and customize a loyalty program that fits your situation perfectly – location by location. Our experience shows that when the basic loyalty model is implemented, there are a wide variety of options available that can all contribute to a very successful program.

The rise of subscriptions

One component of loyalty programs that is exploding in popularity is the subscription model. You buy a plan, pay a monthly fee and have unlimited access to content. Most of us have taken advantage of one or more of these programs—Amazon Prime, Netflix or Spotify, for example—and their popularity has only grown through the pandemic. And, if subscriptions are familiar to you, they are also familiar to your customers.

Carwash subscriptions are being employed by several large retailers with excellent results. There are advantages for both the customer and the retailer. For example:

  1. Ultimate convenience – as the name implies, convenience stores – and carwashes – are in the convenience business. Today’s technology has elevated convenience to another level. For example, Circle K subscription holders can activate the carwash from their phone without leaving their vehicles through the Circle K app. Customers want to wash their car as quickly and as easily as possible, and the subscription and app remove the need to go in store to buy a car wash code.
  2. Unlimited benefits – customers love the idea of “unlimited” benefits. It’s one less thing in their lives to keep track of. It also makes the decision to stop in for a wash easier and will likely increase visit frequency.
  3. More selling opportunities - for washes associated with a convenience store, increased visit frequency also boosts the opportunities for cross-selling and up-selling.
  4. Contact-free – with Covid-19 concerns, the operational benefit of contactless car washing for subscribers has become a major point of attraction.
  5. Assured income – for the retailer, subscriptions provide a level of guaranteed, monthly recurring revenue. It’s basically money in the bank.
  6. Locked-in loyalty – perhaps most important from a loyalty perspective, subscribers will never go to any other car wash service once they’ve subscribed to yours. Subscriptions are an amazing way to lock in customer loyalty.

Key aspects of most successful subscription programs are a link to a payment method (also the most effective way to identify your customers) and gamification to increase engagement. An example of the latter is a slot machine game on the Circle K app that gives the subscriber the chance to play and win a free carwash.

Our subscription programs are highly customizable, and once set up the retailer has complete control of the customizable elements, which include site appearance, package pricing, introductory offers, special deals and game rewards.

Games are just one example of the “softer” loyalty advantages of subscriptions. Another is the sharing aspect. For example, subscription users can buy a prepaid voucher and pass it on to a friend of family member so they can enjoy a free carwash. Other retailers enable subscribers to donate their points to charity. These softer features engage the consumer and help them build an emotional connection with the brand.

A final significant benefit is the data generated by your subscription program. Retailers using our program receive real-time insights – for example, which plan is working, how many are using the mobile app, which stores are most effective – delivered via email on a daily basis. All this data and more can also be accessed at any time by the retailer.

Could your loyalty program use a boost? Evaluate each aspect of your current program, and, if you haven’t already done so, consider the possibility of adding a subscription option to the mix. It’s always the right time to strengthen your customer connections.

Saurabh Swarup is the General manager - North America and global sales head for Liquid Barcodes. Founded in 2000, Liquid Barcodes manages loyalty, subscription and digital marketing programs for some of the largest convenience retailers in the world, such as 7-11 and Circle K. worldwide.

Enjoy learning about Saurabh's experience with Mark VII? Read more stories here.