«Customers who have bought from you several times before (regular customers) are 60% more likely to buy from your business than new customers.»
At first glance, the above sentence might seem exaggerated. But with a little research and investigation, we can find out that the above statement is true. However, a lot of people who have just launched their business think that they can make more money by attracting new customers. For this very reason they pay less attention to the customers who have already bought from them.
You might think that customers who have bought from you once will buy from you again without you making any effort toward them. But the probability of this event is very low. In fact, you should plan for them to make their next purchases, otherwise, they will choose another service. To achieve this, you may consider creating a customer club.
Some companies do not dedicate much attention to customers who have already made a purchase, thinking they have become regular customers with a one-time purchase. They design their customer experience strategy to attract new people and encourage customers to make their first purchase. But this type of strategy could put you in the wrong direction.
Customers who have already bought from and then turned into loyal customers can be very effective and useful. So in this post, we will examine one of the most important methods to achieve customer loyalty, which is creating a customer club.
What is the customer club and what are its goals?
The customer club is actually a program during which the organization offers special and limited facilities to specific and special customers. In this way, the organization tries to increase the lifetime value of its customers by making them feel they are special customers and members of a privileged group.
In digital marketing literature, there is a concept called customer lifetime value. The definition of this concept is simply the amount of profit that a person brings to a company during his/her lifetime. There is a special formula for calculating the accurate value of this factor, which depends on various variables. However, the accurate study of this concept is detailed and requires a dedicated post to explain it thoroughly.
The higher the customer lifetime value, the greater the profit for the company. Creating a customer club allows you to convince the customer to make future purchases. This is enough to make subsequent purchases easier and make the customer more profitable for the business throughout his/her lifetime.
The goal of creating a customer club is not only limited to this issue and will have other goals as well:
- Turning customers who have bought from you into loyal customers.
- Attracting new customers at a lower cost.
- Establishing a beneficial relationship for both parties.
- Receiving more accurate feedback from customers.
What is the importance of creating a customer club as a marketing activity?
Creating a customer club should not be as if you made a list of customers and you are supposed to bring them together. Rather, you should look at it as a marketing activity. These days, there are a large number of companies that have customer clubs. But are all these clubs successful? Do customers wish to stay in such clubs?
In order to have an effective customer club, you need to plan the appropriate strategy so that the customers join the club at the right stage of the customer journey. A good strategy will not be achieved without appropriate marketing, as marketing in today’s world is no longer limited to financial transactions or plans to make more profit. With a closer look, we can understand that marketing these days implies accurate knowledge of the customer and effective communication with him/her as well.
If you want people to be fully satisfied with being in your customer club, you have to build a deep relationship with them and retain them. Also, you should employ marketing and other tools available for your business. In fact, the customer club becomes valuable only when it can create a good and intimate relationship with the customer. Otherwise, it will practically be no more than a decoration.
For example, Sephora, a multinational cosmetic brand, has one of the best customer clubs in the world, for it has gathered more than 25 million members from all over the world. The most important feature that this brand has in its customer club is the good and effective communication with customers. In the Sephora customer club, you can choose your gift in return for every purchase you make. This offer has made Sephora one of the most efficient customer clubs.
How to create your own customer club?
So far we have figured out what features the customer club should have and what goals it should try to achieve in order to be useful for you and your business. Now, it is time to take the necessary steps to create and run a customer club and explain this procedure step by step.
1. Get to know your audience and customers and create a club based on their interests and needs
Building a customer club is unlikely to succeed without knowing the customer very well. You are creating the club specifically for your customers, so you need a clear understanding of their needs, interests, and expectations. When your customer club becomes attractive to the customer and has something unique or extra to offer among your competitors, then you will have succeeded in achieving exactly what the customer wants.
You don’t have to do difficult and stressful work to obtain such information from customers. All you need to do is to create a professional Buyer Persona Survey and send it to your customers, then, with the data obtained from them, prepare yourself to create a customer club.
A detailed knowledge of your buyer personas will help you plan a better strategy. For example, if you have a digital equipment store, you may discover, after conducting the buyer persona survey, that your customers prefer installment purchases instead of having higher discounts on a certain product. If you start a club without surveying your customer personas, there is a good chance you are going on the wrong path.
2. Define the customer club strategy and its membership benefits and conditions
After knowing the customer’s needs and interests, it is time to plan an efficient strategy for the customer club that can be profitable for both parties. For example, at this stage, you need to determine that whoever should be a member of your customer club must have purchased a certain amount per month or earned a certain number of points.
Before developing a strategy, put yourself in your customer’s shoes and ask yourself this question: “Why should I join the customer club?” Answer this question from a customer’s point of view considering the advantages of your competitors. Now, if the answer is convincing and matches the interests and needs of your customers, then it is time to start.
If you feel that you cannot answer the questions correctly on behalf of your customers, it is better to interview a limited number of them or ask people who joined your customer club why they chose to do so.
For example, the world-famous brand Starbucks has taken an interesting initiative to launch its customer club. Starbucks created an app to make it easier for customers to access and be given stars for in-app purchases, where customers could get different services for certain stars.
Thanks to this application, Starbucks always remains in the minds of customers, and many people become members of this club because of the easy access. In addition, Starbucks could better monitor the customer’s behavior and performance through this application.
3. Start informing your customers through your channels
After you have created your customer club, you have to let your customers know about it. The best way to inform your customers is via communication channels that you have with them. Social networks, websites, e-mail, and other channels can help you deliver the news of creating a customer club to your customers.
Sometimes, the special and desirable conditions of the customer club can turn a potential customer into an actual one. Don’t simply ignore this fact after announcing the creation of your customer club. You can do this through your business partners’ channels and other advertising methods.
4. Keep your promises
When customers join your club, they express their confidence in you and your promises.
At the strategy development stage, you have the opportunity to set the conditions well and make promises that you can keep. For example, if the members of the customer club are supposed to receive a discount for using other services offered by your business partners in return for buying from you a certain amount per month, then you must first reach an agreement with your business partners about the amount of that discount and then make it available to the customers.
Failure to keep the promises you make to the customer can lead to many negative effects and thus building trust with other customers becomes more difficult.
5. Pay attention to the balance in giving offers and in the “discount culture”
Keep a balance when giving discounts! Excessive discounts can also have a negative effect. Do not forget that the customer club is good and effective when it is profitable for both parties.
If you create your customer club entirely on high and unreasonable discounts, you will not only lose money after a while, but you will also make your customers get used to this bad habit and always expect a lot of discounts from you. Therefore, establish a balanced discount culture from the beginning in order to have a successful customer club.
For example, Papa John’s Pizza gives its customers a $100 pizza for free when registering on the site. In addition, you get a point for every $5 online purchase, and when you collect 25 points, you can get a free extra-large pizza. This type of discount may seem very attractive to the customers, but it can cause a lot of financial losses to the company after a while.
How to monitor the results of creating a customer club?
At the beginning of the customer club, when there are only a few members, you can talk to all of them by phone and get their feedback. But when the number of members increases, this will no longer be possible, so it is better to try other methods like sending emails, creating customer surveys, or sending SMS.
Porsline provides you with various survey templates. To get feedback on your product, you can simply go to the survey templates section, and after registration, you can use ready-made survey templates or create your own surveys with the utmost ease.
As soon as the first member joins your customer club, you have to start monitoring the results, as monitoring the results and knowing the level of customer club members’ satisfaction can help you in future decisions and provide you with a good view of the status of the customer club. Then, if there is a need for a certain change or correction, you can take the necessary actions quickly. In addition to all these advantages, this also makes the club members feel good about you because you listen to their requests. This also increases the likelihood of them becoming your loyal customers.
In the current highly competitive market, a customer club is a feature that can distinguish you from others. By following the steps mentioned in this post, you can have an effective customer club that enhances the customer experience. Finally, attracting new customers and gaining the loyalty of old customers are the most important goals you can achieve by creating a customer club.