A loyalty and rewards program that pays off for everyone
I had my first VetSuccess phone consult with Brenda Tassava, CVPM in late August 2014. Her recommended action steps for our practice included development of a loyalty rewards program to better bond and retain our clients. She recommended we take a look at the Vet2Pet app, as it had a built-in loyalty program in addition to many other features. In just a few short months, we launched our practice’s custom app.
In the following months, I began to hear clients with the App say they wanted to add a dog toy or a shampoo to their invoice to ensure they reached the $100 mark that gave them a loyalty program paw stamp. There were other subtle changes as well. Clients who had a history of concern about how much they were spending were getting excited that they were getting closer to redeeming their 16 “stamped” paw prints and earning their $50 credit as a loyal customer. We even had one of our best clients begin to come in monthly and put a $500 credit on his account so he could earn 5 paw prints at a time. Clearly this was not the original intent of the program, but as our top client who always brought our team goodies and participated in all of our functions and fundraisers, I was not about to discourage him.
I am not sure why I was surprised by the habits I started to see in our clients. After all, I shop at only one grocery store because I earn gas points to be used at their filling station. On average, I receive between 4-10 cents off each gallon. I go out of my way on many occasions to make sure I fill up at their gas station. All of this loyalty to save a whole $1.00-$2.50 on each fill up!
Our hospital has now been using the Vet2Pet App for over a year, and we were encouraged to run some stats on the buying habits of clients who used our App. I presented these findings recently at our practice’s full staff meeting.
“We have over 640 users with a ratio of 53% female and 47% male who are predominantly between the ages of 36-54. In a one-year timeframe, 68 of our 580 loyalty program users redeemed their 16 paw points. We have “given away” $3500 to these 68 clients. (Imagine the gasps of our team, especially our owner, when they heard this.) “Wait”, I replied. “Those same 64 clients in 2014 (4 who redeemed were new clients in 2015) spent $85,243 in our hospital. Can any of you guess what they spent in 2015?”
The consensus in the room was $120,000. Imagine their surprise when I said the figure was $189,268. This equated to an increase of $100,525 when we subtracted out the $3500 that was “lost”. This finding was mirrored when I ran another report in our VMS that identified our top clients overall. The clients who were using our App were also our top 20%, most loyal clients.
This got my team excited! My goal for the staff meeting had been to increase awareness amongst our whole team about the benefits of promoting our App. I would love to turn that 10% of our clients with the App who had accomplished collecting on their 16 punches into 30%. An even loftier goal would be to have more than 10% of our total client base using the App. There is so much potential for significantly increasing our gross profit without any more outlay of resources or costs.
The bonding of new clients is a worthwhile goal. We had four new clients in our 2015 data and their average spending was $2228; significantly higher than our average new client spends. These new clients are already cheerleaders for our hospital. These clients are more apt to spend their money at our hospital than purchasing online or at another venue. We are capturing a larger market share for pet expenditures.
I called Vet2Pet to see if others had experienced similar findings. Again, this program is relatively new so statistics for a year period have only been run on 7 practices. However, the revenue increases ranged from $28,000 to $363,000.
According to Marketing Land, companies throughout the nation are now utilizing loyalty programs more often than ever before. These organizations understand the importance of retaining existing customers and choose to implement a system directed specifically at building customer loyalty. Points the article brought up were that Loyalty Programs:
- Have been proven to boost growth and increase client retention
- Are not as expensive as you may think
- Boost your reputation as clients share the joy
- Increase sales by including enticing awards
- Make customers happy –they are perceived as acts of good will
It is no surprise to find out that nearly every Fortune 500 Company has some sort of loyalty marketing program. So why isn’t everyone doing it? Most likely there is skepticism (there certainly was in my practice) and limited resources in many hospitals to design and implement a loyalty program. Vet2Pet takes all the barriers out of the equation and we now have over eighteen months of data t to prove what a valuable program it is. Why wouldn’t you want it in your Strategic Marketing Plan?