Do loyalty programs really work for dog daycare, boarding and grooming businesses? What kinds of loyalty programs might work or not?
Here's a quick look at some types of loyalty programs:
- Punch Program, aka 'Frequency loyalty' - think of the 'classic punch card' often used by coffee shops. This program simply rewards the customer with additional 'free' services ("buy 9 days of daycare, get the 10th free"). This is a common loyalty program found in the dog daycare industry, with the difference being the customer prepays for the services in the form prepaid 'packages'.
- Pros - easy to administer, and supported by dog daycare management software.
- Creates barriers to purchase, but can be managed by creating smaller 'packages' (5-days versus 10-days).
- Subscription Program - this might include a "membership" that the customer pays for, to receive additional benefits not available to regular customers. The customer is more likely to use more of your services, because they are already paying for some benefits. A subscription program could also include a recurring (automated) payment from a customer. Since they are auto-paying, they are more likely to continue to use your services. Next week, I'll talk more about how to manage subscription programs in Gingr.
- Pros - spending levels likely to be consistent and higher, rewards your most loyal customers.
- Cons - first timers are not likely to engage with this program.
- Points Program - Widely known and experienced by consumers, the customer is rewarded for taking certain steps, either by purchasing products/services, or other actions (like writing positive reviews). "Get 5 points for every $50 dollars spent on retail items". The points are later converted to some kind of cash value (coupons or credit).
- Pros - flexibility/customization, avoids competing on price,
- Cons - does not provide instant gratification, best used for frequent, short bursts of purchasing behavior, generally not supported by dog daycare management software programs.
- Spend Program - similar to points, but the customer simply receives cash credit for certain spending levels (either cumulative or over a certain time-period).
- Pros - Easy to understand, easy to calculate.
- Cons - You may simply give out discounts to customers who are loyal and will spend a lot anyway. Requires additional administration in most dog-care specific software programs.
Here are some additional resources to help get you thinking more:
Why might you want to use certain loyalty programs, and how would you administer them in your business?
Thanks for reading, and for sharing your ideas! - Andy