Building customer lifetime value by rewarding loyalty
Posted 8 December 2020
Ask any business what their picture of an ideal customer looks like, and their description might go something like this:
It’s someone who’s got a track record of spending regularly with us, is maintaining or increasing their spend with us, and is happy to recommend us when they can.
Customer loyalty that matches these characteristics is vital to the success of almost every business.
Nurturing loyal customers increases their lifetime value
Research shows that it can be at least five times1 more costly to secure a new customer than it is to keep an existing one — so it’s cheaper and more profitable to hang on to regular spenders.
When that thinking is applied to the car parking industry, it becomes a significant consideration — and that’s because consumer routines within the sector are frequently long-term.
If a driver uses the same car park not just every day, but all year, every year, for potentially decades, the economics around loyalty become even more important.
But what’s really critical to consider is that regular, repeat spenders must never be taken for granted.
It can be dangerous to think that loyalty is “maintenance-free”. In fact, long-term customers must be nurtured to give you the best chance of them staying with you.
Loyalty programs in action
That’s why more and more parking providers are focusing on implementing a program that incentivises and rewards loyalty — because it makes sense to thank the people who are driving this vital revenue source.
It’s important to note that research shows loyalty programs really work. A study conducted by business consultancy, Accenture, highlighted that loyalty schemes produce up to 18% higher revenue as customers increase their purchase frequency and take advantage of incentives to broaden their spend.
So, at a time when building empathy and engagement through personalised, account-based marketing is growing, what should parking operators be looking for within their loyalty program?
Some attributes of a best-in-class scheme include:
- Simplicity — The features, benefits and mechanics of a program should be simple to understand and easy-to-activate
- Openness — Programs that avoid tricky rules will boost participation; schemes that include complex conditions may have the opposite effect
- Motivational — Tiered programs, which show a clear route to gaining meaningful additional perks such as birthday bonuses, double points periods, added value services, access to the best located parking spots, and “quiet-time” deep discounts, all encourage customers to climb the ladder and maintain high status levels
- Personal — Securing customer permission to access their purchase data or other preferences enables you to tailor the rewards they receive, and to include perks from other businesses such as retail, F&B outlets, detailing services to deliver unique benefits
How can we help
ADVAM’s LoyaltyCredit and RewardsPlus solutions, which are premium features* of AltitudeReservation, can enable car parking providers to create a coordinated solution to incentivise, reward and grow customer loyalty.
- LoyaltyCredit enables drivers to earn points each time they prebook parking with you. Once they have earned the required level of points, they receive a credit.
- RewardsPlus enables owner/operators to create a series of status tiers. Each tier is linked to increasing levels of benefits that rewards loyalty and encourages others to increase interaction with your car parking.
You can administer your loyalty program through AltitudeReservation, ADVAM’s prebooking and prepayment platform.
AltitudeReservation enables you to create your program, decide points-to-credit ratios, and set the monetary value of each credit applied. You can then tailor status tiers, status points-to-tier ratios and rewards earned — all within an online environment that’s presented to customers within your branding environment.
As car parking operators continue to navigate a challenging world full of competitive, social and economic forces, implementing a customer-focused loyalty program matched with great service and value could be the key to ensuring long-term success.
Find out more about our loyalty solution here