Tag Archives: loyalty

Socializing in a Socially Distanced World

Socializing in a Socially Distanced World by Evan Shirreffs

As young professionals, most of us are getting our careers started, attempting to make new friends outside of work, and networking for possible job opportunities that don’t involve surviving at the bottom of the totem poll at a 9-5. A lot of this socializing would typically come at happy hours and on weekends with visits to our favorite spots, but a huge disruption to the young professional lifestyle came with the onset of COVID-19. Our time to let loose became a time of added stress as we were pent up in our apartments, or even back home with our parents, as we waited for any sign of times returning to normal. One thing became clear as week after week brought new broken promises and spoiled expectations: the end of this mayhem was nowhere in sight, so we decided to make do in the meantime.

At first, this meant getting together with a small number of close friends for what normally would be pre-games. These gatherings still somewhat involved social distancing as our parents warned us that we couldn’t see them when we traveled back home if we were stupid enough to see other people, but the seed of times returning to normal was already planted.

At some point in the terrible reaction to the pandemic, the FOMO took over. Our cravings for those social settings that we so dearly missed slowly outgrew our fear of the pandemic. Naturally, we wanted to meet people and we wanted to try new things. As places began to re-open, we scrolled through social media, witnessing our friends start to go out again. Sparked by distrust of the conflicting news we received day in and day out, we were all soon flooding the doors of any place brave enough to host us. Whatever was open, we ran to with hopes of getting in before they reached capacity. We watched our favorite dance floor at Gin Mill reopen before regulations forced them to do table only seating. We saw an earlier last call at Sycamore with each passing evening, leaving us scrambling for a new place to go. We were devastated by a curfew put on the few thriving spots like Hoppin’ after a promise of brewery and bar re-openings that clearly came too soon.

After hearing news the other day of an additional 5 weeks being added to the Phase 2 protocol in North Carolina, I thought of how everything has unfolded over the past few months and pondered the next moves for some of these affected restaurants, bars, and breweries. In my research, I came across this excerpt regarding the “Real Economic Support That Acknowledges Unique Restaurant Assistance Needed to Survive (Restaurants) Act of 2020” that truly puts into perspective what these businesses have been going through and why relief is needed:

“Recent surveys found that COVID-19 has forced operators to lay off 91% of the hourly workforce and 70% of salaried employees. Only one in five restaurant owners subjected to state mandated dine-in shutdowns said they felt confident they could keep their restaurants running. The National Bureau of Economic Research predicts that only 15% of restaurants will be able to stay open if the COVID-19 pandemic lasts six months. All of this in an industry that already runs on extremely thin margins.”

While the circumstances appear dire, there is always hope and opportunities hidden within even the most chaotic of crises. There are strategies business owners and operators in this space can and are taking to make the best of the situation.

Following online research into the subject, I wanted to take things a step further to develop a better approach in which to help these businesses. I decided to reach out to a few business owners (primarily in Charlotte) to see how they maneuvered the past few months, learn how imposed laws have affected their businesses, determine what tactics are working, and hear about their expectations for the future. More to come soon…

Evan Shirreffs, MBA is a Business Analyst with WIMS Consulting a full-service marketing and sales agency operating primarily in Charlotte, NC and Miami, FL. WIMS has a service line dedicated to assisting restaurants, breweries, and bars with growing and scaling called LDR BRD.

LDR BRD Level Up Your Business

Level Up Your Business: Introducing the Launch of LDR BRD

The LDR BRD Mission:

We help your business understand and connect with your customers by providing actionable intelligence on consumer behavior. We want you to really know your customers and your market. We give you the power to increase revenue, brand exposure, and increase market penetration by deepening your relationships with your customers.

Whether you’re in the early stages of the concept, have been around for a while, or are currently experiencing a wave of growth, we understand each business has its own unique set of challenges and opportunities and customize our approach accordingly.

We work with you to help reach your destination, while keeping in line with your unique brand, mission, and everything else that makes your restaurant, brewery, coffee shop, winery, retail location, etc. stand out!

What sets LDR BRD apart?

  • Created for the food, beverage, brewery, winery, hospitality, and retail industries.

  • Integrates with your existing systems (or we can help you create them).

    • Data collected from Web, Email, POS, Social Media, CRM, referrals, etc.

  • Tracks customer activity on-site and off-site.

    • ​Financial, Online, In-Person, etc.​

  • Data is then measured, run through filters, and used to identify your most valuable and loyal customers, how they interact with your business, and keeping them engaged with your brand long-term.

 

We have much more to come, but if you’re interested in learning more please visit our website and reach out to discuss!

LDR BRD

Leveling-Up the Loyalty Game – Welcome to LDR BRD By: Tom Schaefer, Jr.

What are those letters? We’ll get to that later, I promise it’s worth the wait. In my previous post, I went on and on about how Loyalty systems don’t work.  At the end of that piece, I explained that loyalty does work, it just seems the retail application was broken. They’re rewarding existing loyalty (which reduces the Lifetime Value, or LTV, of a customer that wasn’t going anywhere) but failing to convert new customers to loyal ones. If there’s something we’ve learned from Star Trek/Wars, Marvel, and even the gaming community, its that consumers crave something they can connect with. The obstacle here is translating what other mediums do well, into a retail or B2C environment.

Janet Robinson, former CEO of the New York Times Company, said it best –

“Repeat business or behavior can be bribed, Loyalty has to be earned”

But what inspires loyalty with your customers? First, we need to separate Customer Loyalty from Brand Loyalty. Customer loyalty comes from the buyer’s power on their own personal spending. They’re likely motivated by lower prices and competitive deals. The loyalty Ms. Robinson is talking about is Brand Loyalty, which is based on perception of the Brand and its value. Brands that focus on excellent quality in product, service, and a cohesive message, are much more likely to inspire loyalty in their customer base.

After all of this research into loyalty/reward programs, I went and did something about it. I created a loyalty platform that ties into the basic fundamentals of building strong brand loyalty. I could tell you all about Aristotle’s 7 causes of human action, defining the 7 ways we make decisions and take actions, or go through some other psychological triggers, but the answer is much simpler than that. Create a quality product or service, provide excellent customer experience, and unify under a strong message. Once that is in place, the rest is as easy as paint by numbers.

My system plays into 4 areas that help grow customer loyalty: Trust, Character, Excitement, and Community. First, we extend the excellent customer experience outside of the standard financial transactions. Using a common platform like a CRM program, helps us stay in touch with our customers, understand their actions, and allows them to provide us with feedback to make their next visit that much better!

 

Enter LDR BRD (but where’d the vowels go?)

I’ve been so excited to share this with everyone! I’ve spent most of my professional life in Sales and Marketing, and leaned on quantitative data for most of my decision making. We use tools like Lead Scoring to determine which people are more likely to buy, and which are just window shopping. Then it hit me…what if we could do the same with loyalty? It’s a messy, qualitative, emotional category that isn’t easy to track. So how do we do it? I took a sample group of people who self-identify as “Brand Loyal” and interviewed them over a couple weeks.  Turns out their actions oftentimes spoke louder than their words. They were more likely to make large purchases from their preferred brand, share with friends and family through word of mouth/social media/online reviews, and fall into the habit of making regular purchases. Loyal customers should make up at least 20% of your base, but will account for 80% of future profits. It’s time to find out who they are (and what they care deeply about)!

 

Ready Player

We took the traditional lead scoring model, and made is public facing. This effectively turns loyalty into a game that adds a competition component to a system that doesn’t separate the loyal customers from passive return business. We have a system in place to track activity both inside and outside the traditional financial transaction. Did someone share a post on social media and tag your business? Get Points! Did someone invite their coworkers or friends to your bar for happy hour? Reward them! Did someone make a large purchase? Don’t let it go unnoticed! Our system also incorporates Feedback Loops (similar to popular games like Fortnite, with each new season giving players a reason to re-engage), so everyone gets a chance to shine, regardless of the previous activity. This allows new customers to feel like they have a chance to benefit in the system, while longer tenured customers continue to benefit from past activities. The purpose of this system is to identify and reward loyal business, all while turning your customer base into your own personal marketing army!

What about the name? I was inspired by the classic video game displays that list the current high scores. The leader board gives new players a number to beat, driving competitive behavior. At the end, you can only use three initials to describe what you are.

Leader Board became LDR BRD.

Are you ready to play?

If you have any questions about LDR BRD or would like to discuss how this platform can transform your business and drive revenues, fill out the form here or email me and let’s talk: tschaefer@wims-consulting.com.

 

Why Loyalty Programs Don't Work

Why Loyalty Programs Don’t Work…

As Marketers, one of the key metrics we follow is brand engagement, also known as Loyalty.  We often talk about the size of a market, or how much market penetration a particular business or campaign has achieved.  Loyalty is the measurement of how much of our captured market repeats business with us.

It’s said keeping a customer is cheaper than gaining a new one.  Considering the retail industry as a whole spent over $1.9 Billion in 2016 running Loyalty programs, I’d say it’s still pretty costly.  Businesses use “Loyalty Programs” or “VIP Clubs” as a way to grow customer loyalty.  Unfortunately, these programs are often costly to operate and rarely translate to any kind of loyalty to the brand using them.

The average house is participating in over a dozen loyalty programs, and less than half the users are active or engaged with the brands.  While the program is designed to increase loyalty, the business ends up spending money on the customer base that’s least likely to leave.  These programs effectively cut into the profit margins from customers that were likely going to return, regardless of any additional perks.  That last part is especially true considering most of the participants either don’t know how to redeem the rewards, or don’t care enough to find out.

You can find all of this information and research with a simple Google search.  However, there is one market segment adding these types of programs at a faster rate than previous years.  The beverage industry, specifically Breweries, Brewpubs, Tap houses, Wineries and Vineyards, Distilleries, and Hard Cider Mills.  The most common model is by far the Mug Club, or Mug Membership.  While some are a one-time payment, most are annual or monthly payments to a business, providing the member with added perks.  Now, as a former member of these clubs, I LOVED them.  I probably doubled my money with the perks I received.  An example of the perks is as follows:

-Personalized mug, typically 2-4 ounces larger than the standard pint but priced the same

-Brewery/Tap house Merchandise (T-shirts, Hats, Koozie, bottle openers, stickers, etc.)

-Discounts on Beer/merchandise

-Special Events (no cost to members)

-First in line for special events/product releases

-Free Growlers and discounted fills

The average cost of these programs to the members can range anywhere from $40 to a couple hundred, depending on the Brewery or Bar.  I spent $150 to join one, and $85 a year to keep it renewed, with additional shirts and events with each renewal.  The Breweries justify this by saying it creates a group of loyal customers that will promote the business outside the walls and gives the members a unique sense of community.  When most of the Brewery clubs have 100 members or more, that’s a big cut into a profit margin from a group of people that would likely be loyal customers with or without the club.  Can the breweries prove these members are promoting them in the community? What’s the return on the brewery’s investment?  If you can’t prove something works, how do you justify the expense?

 

Alternatives to the Club

Now you don’t think I’d sit here and rip apart an old system that’s been in place for years without offering alternatives, do you?  I love a good beer, and want to see these Breweries grow.  They stay in the same system, or don’t participate, because there aren’t many people out there talking about alternatives.  The end goal is to increase their market share, and promote loyalty within their current customer base.

 

Special Release Clubs

These kinds of membership clubs seem to work for those chasing the elusive “Whales”, or special limited run bottles.  Breweries can forecast what kinds of beer they want to make, based on cost of production, and divide that total into the membership count to give them the cost per member.  Tag on whatever margin they need to make it worth their time, and the membership group can turn a profit before the first batch ever goes into production.  This gives the members a sense of loyalty, status, and keeps them engaged with the brand as they look forward to the next release.  There’s a value add, and breweries can measure the benefit.  Club members typically have to travel to the brewery to pick up the bottles, and will often spend a bit more on beer during the visit.  POS systems can track the members and allow breweries to measure the additional revenue per member at the time of the visit.

 

Active Point Systems

This is a new take on the long-standing loyalty system, but with a twist.  Breweries, Distilleries, Cider Mills, and Vineyards/Wineries can easily turn their typical social and marketing engagements into a point system.  By continually engaging with their markets, breweries can put out a series of tasks that equal points.  Create a clear, public facing list of “award tiers” that customers can follow, and the point totals needed to reach each one.  World of Beer did something along these lines with their “1 point per beer purchased” programs, with prizes ranging from a free t-shirt to a private party with a free keg of your choice.  Not a bad start, but they could have gone further.

The one beer = one point model only works when people are in the building, and it isn’t typically something most of their market thinks about unless they’re already patronizing a location.  The prizes also need to be collected from the location they signed up for the program.  This negates the benefits if someone moves or a location goes out of business.  You can switch your “home” location, but that’s unnecessary friction for the customer.

Award Tiers need to not only benefit those already in the building, but also incentivize the market as a whole to either patronize a brewery, or promote the brewery.  Our team at WIMS put together a system that rewards your market for not only coming in to buy your product, but also promote your product to their own network.  You keep them engaged with your brand with regular bonus point activity, creating a sense of community.  We put a system in place that allows you to track and quantify the return on investment from the dollars spent on a marketing campaign.  The best kind of loyalty is from customers that not only frequent the brewery, but also promote the brewery when they’re not there.  Expand the market and increase loyalty within the new segments as it grows.

Whatever system you put in place for your Brewery, Distillery, Cider Mill or Winery, make sure you can measure the results.

If you have any questions or comments about this article, I’d love to hear from you.  Reach out in the comments below or sign up for our monthly newsletter.

Cheers!

-Tom Schaefer, Jr.

Part 1 of aseries…