Have You Achieved Tasting Room Loyalty
- [Voiceover] This video showcases how to measure if loyalty is achieved.
When offering a loyalty program, your ultimate goal should be long-term customer loyalty which will mean investing your time and effort throughout the life of the program.
To prevent customers from only shopping when you offer sales or promotions, you will need to offer more than just discounts.
To win loyalty, you will need to improve your customer's tasting room experience.
Make certain that customer service, product availability and selection, and other experiential factors like aesthetics and educational opportunities meet, and hopefully exceed, customer expectations and persuade them to return again and again.
To help you evaluate your loyalty program's success consider these four measurements.
They include customer retention rate, customer effort score, negative churn, and net promoter score.
Your customer retention rate is a measurement of how long customers stay with you.
To determine your customer retention rate, calculate the difference in customer retention between program members and non-program members.
This can be measured in months, years, etc.
Your customer effort score is a measurement of customer satisfaction in handling customer service requests.
Clearly, your goal is to have your customers' requests handled with as little effort as possible.
High effort in getting issues addressed will most likely lead to customers defecting from the program.
If a group of loyalty program customers have indicated a need or want for a certain program option or benefit, have you fulfilled this request?
Or, if they have alerted you to a problem, have you provided a solution and fixed the issue?
Churn is the measurement of how many customers leave your business over a specific period of time.
In a tiered loyalty program, negative churn can be an important measurement.
Negative churn is an increase in customers who upgrade their loyalty membership by meeting higher spending goals and/or buy-in to a higher program tier.
And finally, a net promoter score is a measurement of customer satisfaction based on the question, "How likely are you to recommend this loyalty program?" It is usually based on a scale from one to 10.
As you can see in this chart, respondent answers are categorized as detractors, passives, and promoters.
The net promoter score is calculated by subtracting the percentage of detractors from the percentage of promoters.
Passives are only used in calculating the total number of respondents.
They do not directly affect the net promoter score.
You should be able to review your members' purchases and, based on your overall goal, calculate the percentage of members whose purchases have increased, remained the same, or declined for a particular period of time.
You will need a point of sale or mobile payment system to capture these statistics.
There are many loyalty programs that are put into place and then often changed because they do not fulfill the business's hopes of enhancing profits.
If you must discontinue a loyalty program, make every effort to contact customers about changes or cancellations and announce the information in multiple locations including signage in your tasting room, online, in newsletters, and so forth.
Be sure to inform your members several weeks or months in advance and offer compensation comparable to the benefits or discounts they can no longer redeem.
For example, you could offer a coupon with an open-ended expiration date so customers understand that you are sincere in efforts to help them adjust to the change.
Compensatory coupons could be based on several factors such as a discount based on past amount purchased, an award amount that is slightly greater than the actual amount owed like a good faith effort, an entirely new type of reward system you are interested in implementing.
While drafting a plan for your program, ask employees for their input and to provide comments and suggestions based on loyalty programs that they belong to.
Incorporate features they like and believe your customers will value.
In addition, you might want to trial the program with a small set of customers.
Before and/or during the trial period, invite customers to provide their thoughts about the program.
Did any part of the program confuse them?
Did they experience difficulties redeeming rewards?
It is best to identify any problems that need to be fixed with a small group than to hastily launch the full program, only to find that there are large issues.
Also, it is important not to change the program too much after the unveiling.
Customers may become confused or upset if they feel you are not delivering what was promised.
The bottom line is that a loyalty program alone does not guarantee repeat purchases.
Rather, it is only one component that successful retailers implement.
You must assure your customers that you value their patronage.
The outcome can be a lasting relationship that's beneficial for both your winery and your customers.
A continued series of positive experiences further encourages customers to shop at your winery.
Hence, customers truly become loyal.