PointLoyalty - loyalty programs online

We like reading discussions where people argue that loyalty software is a secondary thing to worry about – this statement indirectly advertises our product.
Using Pointloyalty Manager sets you free from software concerns at the start of customer loyalty programs and it is bound to our following advantages:
- simplicity
- wide functional support
- short time to start
- free or low-cost price policy

It is better to spend marketing budget on specialists managing loyalty offers, not to develop your own software solutions.

Software is indeed secondary, don’t waste your precious time on it – use our system.

Being on a conference in a place where usually spend vacation time…
One of the local companies demonstrated an interesting technical solution for solving next problem of internet shops:

Some company announce that it is ready to sell certain product at X price instead of standard Y – if the whole stock of N product items will be bought at the same time.

Then the customer is involved into getting N buyers of the product for this company, not only the company itself.
Of course, the program can be much more complex – the price can depend on the date, one can define a limit for price decline, there can be various options to handle purchase refusals, but the essence is this: “Hey, customer, let’s get those N other buyers and you will get the product cheaper”.

We already wrote about one of our clients idea to use PointLoyalty Manager for calculating bonus points for company employees.

Another interesting idea from our customers is to use PointLoyalty Manager as a system for computation points for a gaming web site. Players registered on this site get bonus points according to complex and frequently changing rule system which also consider previous players’ achievements. We don’t know yet if our collaboration will be successful, but this idea is quite interesting.

Our system was intentionally designed for wide application spectrum and looking at non-standard usage ideas it looks pretty much universal.

We have got recently an interesting offer – to use PointLoyalty Manager for calculating employee bonus payments. Interested company has a standard set of rules for rewarding their employees. They find that formal system of charging bonuses for purchases is quite suitable for calculating extra salary payments. Besides, the system uses rules which can lead to charging negative bonuses – penalties.
We don’t know whether it is good or bad to use strictly formal method of assigning salary bonuses – the customer is always right.
However it is pleasant to note that PointLoyalty Manager is a really flexible system and customers can use it in such a way we never imagined.
So, if assigning bonus compensations can be formalized PointLoyalty Manager will solve issues like that - employee activity will be processed and bonus payments (or fines) will be calculated.

How to measure the loyalty of your customers?
How to estimate your loyalty program effectiveness?
We already mentioned several times the problem of numerical estimations for established loyalty solutions.
Usually it is difficult to see exact numbers not because they are confidential but because the program owners also lack them.
One interesting way to estimate customer loyalty is by using Net Promoter Score (NPS) metric. We recommend to read about it and take a look at real business cases. Having measurable results is an important attribute of well articulated loyalty project and NPS provides a good way to achieve this.

I watched staff turnover situation in one (not so big) company. There was no turnover in it since very long time. After one of the leading managers has left the company employees started to quit thick and fast. I talked to one the former employees:
- Why did you left ‘ZZZ’?
- The salary was way too low
- How long this situation lasted?
- 1.5 years
- Why didn’t you quit earlier then?
- There was such a special atmosphere in our department…

I tried to understand what methods were used by their former manager but have not heard anything besides small corporate parties, organizing outdoor events and other simple casual strokes which were not cancelled after the manager departure.
Later I talked once again with people from that company. There were indeed no special actions taken by the manager to support employee loyalty. It was simply his charisma – he was open, loved his colleagues and tried to support friendly atmosphere in the company.
It is often enough to use common sense when working with people. Treat your employees and clients same way as if you were in their position and they will be loyal to you at least. All the other technical tricks of loyalty programs – are only a supplements to the most important – humane relations.

Let’s re-iterate over evident things once again
- Why companies establish customer loyalty programs?
  - To reward their loyal clients.
- Why companies abandon simple discount programs?
  - Discounts are impersonal.

Why then it is a very often case when rewards in bonus loyalty programs come to impersonal gifts listed in catalogues of doubtful goods taking valuable place in warehouses?
As we already wrote an issue of proper rewarding customers is one of the most important issues in organizing customer loyalty programs. Be creative when choosing how to do bonus redemption. It is not enough just to calculate bonus points; more important is to properly convert them into valuable rewards for your customers.

One interesting example:
One chain retailer in Russia has established a usual bonus loyalty program but added one interesting feature. Before the New Year holidays they send to all customers who gained certain amount of bonus points a special VIP card which allowed to avoid standing in long queues days before the New Year. They opened a separate checkout counter for owners of VIP cards. The chance to spend much less time doing necessary purchases was a major driving force of this program believe it or not.

So, think twice when you organize bonus points redemption – be creative and avoid giving your customers only option to choose from dull catalogues of unsold items.

We already mentioned in the post (http://www.pointloyalty.com/blog/2009/02/24/loyalty-on-demand/) dedicated to ‘software-as-a-service’ why this approach is not yet very popular. Besides all issues described we can list some additional obstacles: the fear to disclose company’s sensitive data and business processes automation reluctance as it is.
Both obstacles will disappear with time.
Let’s see an example from ERP software sector. Many companies think about full business process automation but complain about high costs of ERP solutions. Nowadays there are several well-established open source ERP projects which can dramatically reduce the costs associated with deploying company automation software. But there are a very small number of open source ERP installations worldwide. The statistics show that all on-demand ERP vendors take only few percents of the global market.
We can see that largest companies choose very expensive solutions from SAP, Microsoft and Oracle. Other companies do not want to solve the issue despite they need to.
Our solution is not as big as ERP. We only provide a solution for loyalty programs management and bonus point’s calculations support.
And you can choose – to install our software in your network or use it from our website on terms Software-as-a-Service .

Starting loyalty program is an attempt to set special relationships with customers and it is not always bound with rewards. Trying to set proper relationships is a delicate process and people need to act carefully and accurate.
Here is small example.
Many companies nowadays send greeting cards to their loyal customers in case of birthdays, approaching Christmas holidays, etc. In this way they pay attention to most valuable customers.
One company while sending greetings upon some holiday accidently mistyped client names on greeting cards because of software error. The company has got following reaction from customers:
- majority of people have ignored this error
- 2-3% of customer made phone calls to find out what’s going on and were quite unhappy
- few customer actually filed a lawsuits against the company!

Of course, filing a lawsuit in this case is definitely an overreaction, but 97% of clients now think that there is a disorder in the company and 3% are actively unhappy.

To summarize – your personnel must follow high quality standards when working in such a sensitive area as customers relationships. By doing mistakes it is easier to loose existing loyalty instead of raising it.

I want to give examples of when I turned to be a loyal customer without any special reward programs.

1. Furniture shop
When we moved into the new office we had to buy a standard set of office furniture. I went into the first nearby shop and ordered everything we needed. After that I made purchases there three more times and recommended that shop to 5-7 of my friends (2 of them later purchased there something). How did they deserve my loyalty? They did it only by the charm of their salespeople.
No special actions, no smiles, no bonus points and discounts – just perfect service and answering all my questions.
As a result I am their loyal customer recommending them to all my acquaintances.

2. Hi-fi technics shop
Choosing the right audio equipment is a process that can take months. The point is not its high price but the fact that some people consider it a hobby.
How could one shop make me their loyal client? They did it by offering a set of additional services:
- preparing for my visit (they wired multiple combinations of equipment and this is not so simple task)
- allowing me to take home the amplifier for detailed review.
- etc

Besides, the true passion of salespeople for audio equipment and the serious knowledge in this sphere made quite good impression.
As a result I finished the search process and become their client (set of hi-fi components + additional accessories). I recommended this shop to my friends who also became their clients.