Rewarding your loyal customers, is it worth it?
Today a company can spend so much time thinking of how to gain the attention of new customers, they sometimes can lose sight of their current customer base. Because of this companies have come up with various renditions of rewarding customers. So this leads to the question, should you be rewarding your loyal customers? The answer to this question is… You bet! You know the old saying, “it’s cheaper to keep her”, perhaps that phrase was coined about a car, or perhaps a marriage… But it also applies to your current customer base too.
Your existing customers are the primary source of your revenue, your bread and butter some may say, and their continued loyalty and support is what keeps the lights on. The cost of obtaining new customers is extremely high, and commonly yields customers of negligible allegiance, and lower margins. That being said, I want to make clear the customer rewards program for an energy marketer is not meant to be a pure act of altruism either, it is also meant to be utilized as a customer retention tool as well. In exchange for the customer’s loyalty, you can provide rewards as a trade-off of sorts. Destwin Energy Systems offers a robust customer loyalty program that clients can tailor to whatever criteria they choose to qualify customers for specific rewards. But remember with all exchanges, there are costs, and these costs need to be evaluated both short-term and long-term. For this reason a good customer loyalty program needs to be targeted most aggressively towards those customers who are most likely to defect. These would include heating fuel customers not under any type of contractual obligations, such as will call customers. It would also include propane customers who own their own tank. The mathematical structure used to calculate loyalty points can be more aggressively targeted towards these customers to produce more effective results. But let’s not forget the question of what about the altruism? As a matter of fact, customer loyalty programs serve as a great platform for company promoted charities. At several energy marketer sites, we have noted that charitable donations comprise up to 50% of customer loyalty redemptions, so if this is something your company feel strongly about, this is a great platform to make it happen.