Boost client loyalty with reward programs: keep customers coming back for years by showing them that framing at your shop has its own rewards
One of a retailer’s biggest challenges isn’t how to get customers to come into the store–it’s how to get them to come back. To achieve that goal, small business owners often experiment with sales, seasonal promotions and advertising to attract new customers and encourage old customers to return.
Many retailers have found, however, that building a loyal client base often doesn’t depend on gimmicks, promotions or even price points. Often, it’s simply a matter of finding ways to say “thank you” to customers for their business. Customer rewards programs, which can range from free cups of gourmet coffee to frequent framing cards to invitation-only events, can do what a dozen discounts cannot–turn a customer’s first-time purchase into a long-term relationship.
The goal of customer appreciation-based promotions is to make clients feel special every time they walk into the shop. The result, framers have discovered, is a growing base of customers who return because they enjoy the relationship, not because they want the best price on the block.
Finding tangible ways to say “thank you” to customers has helped Amber Nye of the Hunter Lea Gallery & Frame Shop in Ludlow, Vt., find and keep customers, even in tough economic times. Customers who make five custom framing purchases at Hunter Lea Gallery receive 50 percent off the sixth. In addition, customers who bring in four or more pieces at one time get 10 percent off the entire order.
Nye views these promotions as different from straight discounts, not only because she is happy with her final profit margin, but also because the program encourages customers to make multiple purchases. “I’ve read that people purchase custom framing an average of only six times in their lifetimes, so we want to encourage them to make those six purchases with us,” said Nye.
And, if Nye is lucky, the program will encourage them to make a few more, she added. So far, customers have enjoyed the challenge of filling up their frequent framing cards. To date, the shop has 225 active cards, and a number of customers, Nye noted, have gone through one or two cards already.
“We’re in a ski resort town, and we have a lot of second homeowners coming up from Connecticut and New Jersey,” she pointed out. “Because of our frequent framing program, they’re actually starting to bring pieces to us from home.”
Bellevue Art & Frames of Bellevue, Wash., offers its clients a similar program, in which customers who reach $1,000 in purchases receive a $100 gift certificate. Customers can use the $100 on anything in the store, from its custom framing services to its inventory of art materials, jewelry, candles and gifts.
“The $100 gift certificate is a significant reward,” said Robin McLane of Bellevue Art. “When somebody has spent $1,000 with me, I want to acknowledge them with more than just a ‘thank you very much.’ The $100 is a tangible reward for them, and if they’ve spent $1,000 with me, I’ve still got a good margin.”
Joe Lentz, a business advisor from Panama City Beach, Fla., agreed that customer incentives can be the lifeblood of a small retail shop when it comes to cultivating a consistent customer base. Lentz is a volunteer with the SCORE Association of Washington, D.C., which provides advice to small business owners nationwide.
“Any small business owner who tries to maintain a status-quo attitude is bound to suffer. In order to keep and grow the business you have, you need to be aggressive in your thinking and creative in the way you entice customers to keep returning to your store,” Lentz said. “Loyal customers are your foundation. Rewarding customers for being your best customers makes good business sense.”
A Competitive Edge
The reality of today’s market is that competition among frame shops is increasing at a time when many people are cutting back on discretionary spending. Framers are finding they need more than a quality product to stand out from the competition, whether it’s the mom-and-pop shop on the corner or the big-box retailer down the street, remarked McLane of Bellevue Art & Frames.
“We’re in the Seattle area, so our custom framing department took a big hit when the dot-coms went downhill,” said McLane. “In our area, we have 40 picture framers on the east side alone, and a big-box chain has just opened in the area. In this economy, we have to do whatever we can to survive.”
Michael Couvillon, owner of The Frame Corner in Austin, Texas, also finds that the current economic slump has made it necessary for him to find more aggressive ways to win customers over. “This is a competitive market, and there are a lot of frame shops out there. What I offer is not that much different from what many others offer,” said Couvillon. “What I can offer is a relationship.”
To help build customer relationships, Couvillon offers a loyalty incentive. Customers who spend $750 with the shop receive $50 off their next purchase. “With the frequent framing program, people remember our name. They come back to us to accrue that $50 reward,” said Couvillon. “Fifty dollars isn’t really that much money compared to the dollar amount they spend, but it offers a huge benefit to us. It gives us a connection with customers, which is one of the most important things in building a loyal customer base”
Moreover, added McLane, customer rewards programs often are perceived as more valuable to customers than straight discounts, even when a discount might save them more money. This perception offers framers a way out of the “to discount or not to discount” dilemma.
“Each holiday season, we used to send a large mailing to our customers that offered them 25 percent off custom framing during the day of our open house,” said McLane. The problem was that many people came in on that day by chance, taking advantage of the sale even if they weren’t regular customers. Therefore, the promotion didn’t accomplish its goal–thanking her store’s best customers.
“Now, each holiday season, we send beautifully designed $50 custom framing gift certificates, with expiration dates, to our custom framing customers,” McLane explained. “We were surprised at the difference. Customers saw the value in the gift certificate that they didn’t see in the sale. They’d bring three or five items in to frame. Even though 25 percent off would have been a better deal than the $50, the gift certificate made them feel special.”
Not Just a Discount
As McLane has found, customers often respond more positively to a personalized promotion than to a discount, even if the discount would actually save them more money. Why? Because anybody can receive a discount, but only special customers receive personalized attention, said Georgeanne Bender, a Chicago-based business consultant for small retailers.
Bender repeatedly makes this point in her talks on customer-oriented retailing. Bender and her partner Rich Kizer write books and speak on the subject; moreover, they patronize a variety of retail stores, often in disguise, to find retailers who have the best approaches to creating a loyal client base.
Extremely personalized service is a way for small retailers to stand out against a sea of competition, said Bender. She pointed to one retailer who offered his clients’ children “cookie credit cards” which allowed the kids to “purchase” a small package of cookies each time their parents brought them to the store. That card, said Bender, is one example of a simple promotion that can have a powerful effect.
“Children can be a nightmare for some retailers,” said Bender. “But as a result of this promotion, the kids are always dragging their parents back to the store! This retailer has taken the opportunity to do something that the bigger stores can’t.”
Bender also offers the example of a large supermarket chain in the Chicago area that offered its frequent customers cards that earned them “preferred customer savings.” As a countermeasure, a competing chain ran ads that said, “You don’t have to have the card. You’ll still get the savings.” However, their ad campaign flopped. “It backfired because it didn’t make people feel special,” Bender explained.
Rita Friburg, a business educator and a SCORE volunteer in Pueblo, Colo., recommends retailers take that truism to heart and go beyond the idea of discounting to think of more effective ways to connect with customers. “It’s important to be creative and find new, fun and exciting ways to promote a specialty business without giving away all of the profit,” said Friburg. “Customers can be enticed to spend for many different reasons. It pays to ask, observe and be willing to try new and different promotional techniques.”
Advisors such as Lentz, Bender and Friburg suggest a variety of creative ways to reward good customers and encourage them to return:
* Offer frequent framing programs. Customers often enjoy pursuing a purchasing goal at a single store in order to win a reward, whether it’s a gilt certificate or a percentage off the next purchase.
* Hold special, invitation-only events. Nothing makes customers feel more special than to be “singled out” to attend an event just for them, whether it’s to a show of their favorite artists’ work, a holiday party or a customer appreciation day.
* Recognize customers’ birthdays or other special days. Customers are bound to receive a number of congratulatory cards and gifts on their birthdays, graduations and anniversaries. But how many will come from their picture framers? Many of today’s point of sale software programs allow retailers to keep track of their customers’ important days. A customer who receives a card and gift certificate is sure to think well of the framer who sent it–more important, she will most likely come to the shop to redeem the reward.
* Offer unexpected services. Write handwritten notifications of new merchandise, or offer perks such as free coffee, snacks, pens or coffee mugs to make your customers’ experience with you more enjoyable and memorable.
* Send “thank-you” cards. A mailing of personalized “thank-you” cards is just what Lynn Cowan, owner of Woodland Gallery in Elizabethtown, Ky., is considering adding to her own frequent framing promotion. “We’ve had customers who have been with us fur all of the 12 years we’ve been in business. 1 think it’s a good idea to send them a card with a $25 certificate to say ‘thanks.'”
The Power of Appreciation
It’s true that a good deal, in the form of a discount, can at tract customers. But while marking down slow moving inventory is sometimes necessary, retailers may want to resist the impulse to engage in price wars with competitors. After all, price wars can leave both sides battered. And at best, “good deals” may tram customers to “wait for the sale,” at worst, they can result in slave-wage price points for framers.
With that in mind, framers should not have to resort to deep discounts to build their customer base, said Lentz of SCORE. “Small retailers can’t compete with the big boys on a daily basis by discounting,” he said.
Personalized, reward-based promotions, on the other hand, can become a frame shop’s strongest selling point and its most powerful promotional tool. They offer framers an opportunity to connect with their customers, create a fun atmosphere and have greater control over their profits. In the cud, such programs are less likely to attract bargain hunters and more likely to create ideal customers: those who return frequently, make multiple purchases and refer friends and family to the business.
It’s for that reason that Cowan of Woodland Gallery has decided her frequent framer program–in which customers receive $30 off their next framing order after spending $500–is here to stay. “I mentioned dropping this program to my accountant, and he told me not to do it. He told me to think of it as a form of advertising,” she explained. “Instead of spending a lot of money on advertising, I can offer this. It gives customers an incentive to come back in and tell other people about us.”
SCORE Association, 800-634-0245, www.score.org
Georgeanne Bender and Rich Kizer, 888-215-1839 www.kizerandbender.com
LifeSaver Software, 800-381-0600, www.lifesaversoft.com
Setting Parameters for FREQUENT FRAMERS
Although frequent framing programs are a good way to attract new customers, they do demand extra attention. But clearly setting the ground rules at the outset of any rewards program can help framers keep hassles to a minimum.
Set appropriate limits. Framers must do the math to decide upon incentives that strike a good balance between being meaningful to customers and keeping the shop’s profit margin intact.
Prepare for a few unruly customers. Like any retail transaction, a framing reward program can attract a few customers who want to push its limits, said Michael Couvillon of The Frame Corner. “For example, it’s stated on our card that once customers reach the $750 amount, $50 will be taken off their next purchase,” he said. “There have been one or two people who have argued with that, asking for the $50 off the last purchase on the card. But very few people take that attitude–if they do, we don’t argue with them.”
Amber Nye of Hunter Lea Gallery also had some uncomfortable encounters with customers due to her store’s newly launched rewards program. The store opened in September of 2001 but didn’t institute its rewards program until 2002. “We had a couple customers ask why their orders from 2001 wouldn’t apply. Our response was simply that we had to draw the line somewhere.”
Decide how to handle forgotten cards. Of course, customers will sometimes forget or lose their cards. Some framers state clearly that customers must have the card with them in order to be credited for a purchase. Others solve the problem by keeping records in the store. “We bought one of those little recipe boxes with A-to-Z sorters,” said Nye. “We keep all the cards by the counter, so we don’t have to worry about the customer forgetting the card.”
Others may want to take advantage of the frequent framing card function of a point-of-sale software program like LifeSaver Software, which will keep track of customer purchases automatically. In LifeSaver, for example, a framer can print get cards on heavy stock with the shop’s logo and address on one side and the special offer on the other, explained the company’s president Paul Thomas. Some framers use an inexpensive laminator to add a professional look to the cards, he added.
Keep up with the cost of doing business. Finally, framers should revisit the program on an annual basis to decide whether market conditions warrant its parameters to change. Couvillon, for example, is in the process of phasing out the store’s old frequent framing cards in favor of new cards with a higher limit.
“We just recently raised the limit on our frequent framing cards from $500 to $750,” he said. “Almost each of our suppliers raised their prices in the last year, so $500 just isn’t what it used to be.”
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