Share the Magic. Keep in mind that a good referral-rewards program is a partnership that has something of benefit to both sides, he says.

What is the key component of customer engagement?
Is a referral program a natural or natural offshoot of customer rewards?
What do customers thank for in a referral program?

Transcription

1 Share the Magic, Get Rewarded Create a formal referral program to thank customers for recommending you. By Allison Deerr 1. A referral program is a natural offshoot of customer rewards. 2. Rewards should be tailored to your customer demographics. 3. Give brides an extra incentive to share their shopping experiences. 4. Like bridal gowns, rewards shouldn't be "one size fits all." Thank you. Those two little words can be worth their weight in gold for bridal retailers, who undoubtedly know the value of word-of-mouth marketing. After all, wedding shoppers who pass along stories of their positive experiences in your store are a valuable asset. For that reason, thanking these customers for going that extra mile and bringing new customers into your store should be a vital component of your branding and marketing plan. Almost every bridal business rewards its customers occasionally. Very few, however, have a formal referral program in place - a systematic way to say thank you to brides who recommend your store to their friends, family and acquaintances. This is a mistake because customers appreciate and respond to rewards programs. In fact, nearly 90 percent of American shoppers participate in rewards programs to gain points, discounts or prizes for purchasing products, according to Chris Cottle, vice president of corporate marketing for Allegiance, a South Jordan, Utah-based customer loyalty software company. "The concept of rewards programs has taken root in our society," Cottle says. "A key component in customer engagement - being emotionally connected to your store - is feedback and valuing positive referrals." Keep in mind that a good referral-rewards program is a partnership that has something of benefit to both sides, he says. "The customer has to see a value to them, or why should they take the time to refer new business to you?" Cottle says. "(From your perspective), it costs less to get new business from a positive referral than from other advertising and marketing methods." So what does this mean for bridal stores? A referral-rewards program is a natural offshoot of a customer-rewards program, extending your relationship with the bride well past her honeymoon and leveraging those positive experiences into potential new business. A referral program gives the bride an added reason to pass the word along that your store is the best place to buy everything wedding related. What makes a referral program "formal"? An informal referral program is one where the business owner acknowledges referrals occasionally with a note, or gift, but isn't something she follows through on consistently. In contrast, a formal referral program requires more: It has to have structure. It must be in writing. Page 1

2 It has to be consistent. And most importantly, it has to come with a commitment on your part to always follow through. The Right Prize Makes All the Difference Now that you've decided to launch a referral program, what should those rewards be? As with any other promotion, your referral program should be designed to help build your brand. After all, it's an extension of your store's atmosphere and the service your staff provides. Customer-loyalty experts say that a business should take time to research what kinds of tangible awards will appeal to their customers, "things that can carry the relationship (between the customer and the store) beyond the event of the wedding and give them a strong attitude of feeling great about the company," Cottle says. The right rewards will reflect your customers' demographic and location. So a first question you should ask is: What is their lifestyle? Cottle notes that rewards that fit the lifestyle of a major metropolitan dweller may be distinctly different than those of a small-town bride, so it's important to tailor your reward accordingly. Also, consider the climate of the times. Cash or a general cash card may be a welcome gift in tough economic times. For others, however, the reward isn't the main factor. They simply take pride in sharing a good experience with a friend; the gift is an extra perk. If you're uncertain, consider surveying your customers to find out what kinds of rewards would be most appealing to them. Would it be cash? A gift certificate? Store credit or discounts good toward future purchases? You can always do a trial run by rewarding referrals with an assortment of comparatively valued prizes, and observing how well they are received. Yet another issue that comes up is whether you offer gift cards, certificates or coupons for use at another business, one that you work with formally or informally. The answer is simple: Yes. Doing so helps reinforce your store's image of full customer service and caring about the shopper. So consider those relationships you have with other businesses in your market area. For example, if you have a co-op relationship with a local florist or restaurant, you may be able to acquire gift certificates for those venues at less than face value. It's a win-win: You get the benefit of offering perceived value to your customer and your business "partners" get new business as well. The Shape of Things: Finding the Right Fit There are many different options for structuring your program. It could be as simple as sending a letter or to each bride at a specified date after her wedding that includes a coupon they can pass along to their friends. (Make sure it's coded to give the referrer credit.) Or you could send an Page 2

3 with a link to your store's Web site, in which brides are encouraged to sign up for an online newsletter. Also consider an extension of your VIP programs that give little extras to the bride to engender loyalty. Obviously, your goal is to make her happy, as well as ready, willing and eager, to refer other wedding shoppers to your store. According to Thomas Harpointer, CEO of AIS Media in Atlanta, the key to a successful referral program is to provide customers with an easy vehicle to make a referral. That's where the Internet and come in handy. "If retailers do not remain in contact with their customers and their prospects, then they are opening the door for a competitor," Harpointer says. "Let's say a bridal shop offers an newsletter that they send out once a month; they can send out thousands or tens of thousands for $50 a month. It's much cheaper than postal mail." He continues, "If the business encourages recipients to forward the newsletter to friends and family, they can do so with a click of a button with zero cost to the storeowner. That's simply not possible with any other form of marketing. If they run an ad in a newspaper, how do you forward that ad to five friends, if you come across a great special or a coupon?" Indeed, is very easy to sort, organize and save, Harpointer adds, a fact that is important because it could easily be three months to six months before one of the bridesmaids gets engaged. Marketing consultant Paul Travis agrees storeowners can use their Web sites to power referrals. Brides can send a link provided by the bridal retailer to all of their friends who are shopping for wedding paraphernalia, encouraging them to sign up for the newsletter. These new prospective customers can enter a special code when they register online or in store, or in-house they can fill in a blank on the registration form with the name of the bride who referred them. "This gives them an avenue to make referrals and get something out of it besides the satisfaction of reliving their good experiences," Travis says. "Helping their friends is one perk; getting something personally, it's an extra perk." And what makes bridal an especially lucrative field for referrals is that the store has a relationship with more than one shopper: the bride, her friends, her fiancž, her parents, etc. "Make them happy and you have more than one advocate," Cottle says. So consider extending your referral offer to others in the wedding party. Design something that works for moms, for instance. Or offer the men in the wedding party something for referring other guys to your shop for tuxes. "There's an opportunity to exponentially compound the success of your rewards program with very little effort," he says. A referral-rewards program is a legitimate way to leverage the relationship you've established with wedding shoppers. Your customers may be more than willing to recommend you, but a formal rewards program may be a nudge in the direction of actually doing so. Page 3

4 Rewarding Positive Referrals Share the Magic Rewarding customers for referrals is a great way to leverage those positive shopping experiences. Here are a few things to keep in mind as you plan a program for your store. Don't make the process complicated. If it's too complex or confusing, you run the risk of losing the referral. Loyalty program consultant Chris Cottle says that ideally, the process ideally should take brides just a few minutes. Yes, consumers often will jump through many hoops for a reward, but they'd rather not. And if you make it slow and difficult, annoyed brides might be less likely to refer others to your store. Don't shortchange the customer. It can be a good idea to start out at a lower reward amount to test the waters, then raise it later. However, keep in mind that shoppers will remember what they got for a reward. So if they see that amount double in six months, they may be unhappy. Don't forget your demographics. Like bridal gowns, rewards shouldn't be "one size fits all." You know your customers best. So choose rewards that will appeal to them and motivate them to take that extra step to recommend you. Don't neglect great performances. If a particular bride sends a steady stream of shoppers into your store, feel free to reward her on a different scale. Just don't advertise it. Don't limit the list. Remember that you have customers beyond all of those happy brides. You can devise programs that include bridesmaids, mothers and dads, special-occasion shoppers and prom teens. Don't impose. Bombarding current and past customers with e-marketing messages or direct-mail pieces can backfire by making the offers seem less special or unique. So space your missives accordingly. Don't cut corners. Remember that the letter, direct-mail piece or you're sending represents your store and reflects your brand. With that in mind, use good stationery, watch spelling and grammar. Also make sure attachments are well-designed, easy to read and updated periodically to keep them fresh. Don't forget to advertise. If shoppers don't know about your rewards program, they can't take part. Inform new brides about your referral-rewards program while they're still shopping. Then follow up shortly after each bride's wedding with a piece describing the program and telling her how she can participate. Don't drop the ball. A rewards program has little value if you don't live up to your promises. Each time you get a referral, quickly acknowledge it and send out the prize or information on how to select from available rewards. You can also offer the option of pre-selecting a reward when appropriate. An Example Referral Letter Page 4

5 Formals of Litchfield, Litchfield, Ill., owner Lisa Brumm sends this letter out a week after a bride's wedding. Dear From all of us here at Formals, we want to wish you all the best in your newly married bliss! We enjoyed helping you find your special wedding gown and accessories. We hope that your wedding day went off without a hitch, and everyone enjoyed your celebration! We have started a new referral program, called the "Golden Bride" referral. We enjoyed working with you and your bridal party, assisting with your bridal apparel and helping in any way we could. If you were happy with our services, we would love to have you refer family and friends to Formals, and we will pay you $25 for each bride you send us that purchases her gown or bridesmaid gowns from Formals. We have a special gift for your friends and family when they make an appointment at Formals. All you have to do is pass out the enclosed coupon with your name on the coupon and have the bride call us for an appointment. She'll bring the coupon with her at her appointment. That's it! And you are on your way to earning some extra cash for the holidays or a special purchase for yourself. We also have a "Golden Bride" picture frame and we would love to have your bridal picture to put in the frame! Send us a picture, or stop by soon with your picture. We'll add you to our Formals family photos. If you have any questions, please call on us (phone number). Thanks, Lisa & Sharon & Staff Copyright 2009, Vows Magazine/Grimes and Associates, 24 Daisy St., Ladera Ranch, CA 92694; Page 5