Visible Results News - Article

CUSTOMER LOYALTY PROGRAMS... - April/May 2004 - Greenworld Magazine, www.greenworldmag.com.au

It was with great interest that I read Bill Brett's article in the Dec/Jan (2003/2004) issue of Greenworld on the subject of Customer Loyalty Programs. I have to say that I absolutely agree with everything Bill said. Garden Magic purchased and implemented its loyalty program aptly named 'Magic Rewards' in January, 2002. To date we have an active membership exceeding 17,000 customers. How the Magic Rewards program works Garden Magic extensively researched various loyalty programs and decided Magic Rewards best suited our strategic business plan for future growth whilst being flexible enough to accommodate changes in market trends. Magic Rewards is a state-of-the-art computerised customer loyalty program with unsurpassed flexibility. It allows us to simultaneously run an unlimited number of individual marketing campaigns at any one time. This in turn enables us to target each customer's specific buying patterns and habits based on historical data. Magic Rewards operates at the point-of-sale where members receive one point for every dollar they spend. All gift vouchers and prizes are issued at point-of-sale. When members reach required levels a gift voucher is automatically produced for them to use when they next visit Garden Magic. A message appears on the card each time it is swiped and on all vouchers printed. The flexibility of the program allows us multiple advertising by having different messages on each voucher as well as the card. Make certain it's sustainable The beauty of the program is the fact that the structure and value of gift vouchers and prizes is determined by you the retailer. But one warning before rushing ahead - be careful when preparing your business plan to make quite certain your loyalty program is sustainable and affordable. If you get it wrong, removing or reducing the value of rewards after implementation and marketing can discredit you and you could lose customers for all time! 'Win-win' with suppliers and local businesses Magic Rewards involves suppliers to sponsor the system by supplying instant prizes won at point-of-sale. In return Garden Magic makes a commitment to a business relationship as our preferred supplier - put simply, a `win win' situation for all! We also involve local businesses by having the flexibility to advertise their special offers or discounts on our loyalty card each time it is swiped and again on the printed vouchers. With over 17,000 members it is an extremely attractive form of advertising for them and, I nearly forgot, obviously we charge a fee for this! Linking Magic Rewards with the customer Prior to purchasing Magic Rewards we devised a written strategic business plan on how we were going to implement, advertise, market and grow our loyalty card. We designed a professional application/enrolment form with questions relevant to our business and planned a strong internal and external advertising and marketing campaign that is still operating successfully today. We negotiated with suppliers and local businesses to form a strong strategic relationship. As a result of this sound planning, Magic Rewards has increased the average customer spend by as much as 40% and increased the customer visitation by up to three times that of non-members. All gift vouchers are produced and instant prizes won as customers complete their purchases, thus strongly encouraging them to come back again and again! High quality full colour newsletter Garden Magic distributes 60,000 monthly newsletters with gardening advice and invitations to special events. Magic Rewards is advertised every month informing customers of the benefits of our loyalty program. Photography, copy and layout are all created in-house. Magic Collections full colour catalogue Garden Magic produces a 20 page, A4 quarterly catalogue titled Magic Collections. It has a circulation of 80,000 copies and is also mailed to every Magic Rewards member. As part of our ongoing marketing campaign, Magic Rewards is advertised in every catalogue to encourage new enrolment. Once again, photography, copy and layout are all created in-house. Reducing administration costs All data is held in a large data processing centre where progressive information is recorded and reports are written and produced resulting in little if any in-house administration costs. The main feature of Magic Rewards is the fact that everything happens at point-of-sale, allowing administration staff to continue their regular work. Invitation to special events and functions Everything at Garden Magic revolves around Magic Rewards. Only Magic Rewards members are invited to attend our special jazz nights and other entertainment events. Garden Magic also arranges regular evening events to which we personally invite our top 500 members who are given the opportunity to take advantage of previews and special pricing. We supply finger food accompanied by a glass of wine. We also send the top 500 members a gift voucher prior to Christmas, thanking them for their continued custom. This year we plan to introduce a valet parking service for VIP members. So why has this worked so well? We planned the implementation and ongoing internal and external marketing campaign long before we purchased Magic Rewards. We involved all staff and motivated them to continually sell and promote the program. We continue to work closely with our preferred suppliers and local businesses offering a loyalty program that has real rewards for our customers. In summary Bill Brett said you need to have the best garden centre in town - well Garden Magic has achieved this and we continually strive to maintain this status. He also said you need to have the best loyalty program in town or at least a major point of difference. Garden Magic has the best loyalty program in town and it has a major point of difference. In closing his Greenworld article, Bill said : "it's the same old story - you only ever get what you pay for and customers soon work this out." This is absolutely true. Although the initial set up cost of the system was high, the ongoing administration costs have been sustainable and affordable. Magic Rewards paid for itself in the first year of operation and continues to produce record breaking profits. The program has proven to be a real success story, a win-win for Garden Magic, our suppliers and our customers alike. Jim Barr, Garden Magic, The Northern Road, Narellan NSW 2567. E-mail: jim@gardenmagic.com.au