Loyalty Rewards for Current Clients

Discussion in 'Business Operations' started by jada86, May 1, 2011.

  1. jada86

    jada86 LawnSite Member
    Posts: 124

    How are you rewarding your current customers for their loyalty to you? How often are you rewarding them?
     
  2. dlonestar

    dlonestar LawnSite Member
    Posts: 25

    The only reward we provide is for referrals. The more we appreciate the customer for the referral the more they give us.

    We have thought about rewards for residential customers but have not put anything into place yet. Game theory seems to be pretty big these days with programs like air miles and the like
     
  3. FLAhaulboy

    FLAhaulboy LawnSite Senior Member
    Posts: 852

    I award them with good service! The #1 complaint I hear is, I called so and so business & they didn't show up. I show up, do what I say I will do (my word is my best reputation) & I think that is reward enough.
     
  4. PostcardMania

    PostcardMania LawnSite Member
    Posts: 163

    Referral programs are a great marketing tool. It's way for you to keep current customers happy and gain new ones. Offer a free mow or free visit for each new paying customer they refer - it will definitely pay off :)
     
  5. Roger

    Roger LawnSite Fanatic
    Posts: 5,916

    I'm with FLAhaulboy. I hear the same thing about "they just didn't show up." Lawn service, especially mowing is the simplest of the simplest. Just getting there when you say you will be there seems to be a challenge for so many (grateful for their inability to meet the challenge because they continue to provide a steady flow of new customer opportunities).

    So, for me, no rewards, excepting doing what I say I will do. That seems to be enough to get all the commendations, and bonus money at the end of the season.

    Our society has become so fixated on rewards (e.g. hardware store, grocery store, credit cards, etc), rather than just plain basic products and services for the right price. Clearly, the consumers have become more interested in the reward systems, than in getting what they pay for. I'm sorry we have gone down this route, continuing to entice customers with rewards because that is what the customer wants (despite saying otherwise).
     
  6. PostcardMania

    PostcardMania LawnSite Member
    Posts: 163

    I totally understand your viewpoint on "rewards", but from a marketing aspect - why wouldn't you want new customers in exchange for a simple service? Look at the ROI... say it costs $20 worth of your time to mow a lawn, but you sell the new referred customer on monthly maintenance and charge them $200/month. Yes you still have to do the free mow, but you just earned $180/month of extra income from $20!

    Seems like a smart investment to put in a system like this. It's customer loyalty, going above and beyond what they expect. And when you've got an economy where people are looking to pinch pennies - they might just decide not to use your services anymore to save a buck. It sucks but it's the truth, so I believe a business should do what's needed to expand and survive.
     
  7. jada86

    jada86 LawnSite Member
    Posts: 124

    Thanks everyone for your input. I guess when I originally posted this question, I should have used the term loyalty thank-you more so than reward. I have read many articles recently that recommend that with the economy low, it's more important than ever to acknowledge loyalty in some way and it doesn't have to be a discount necessarily. Doesn't have to be a buy 11 cuts, get one free, etc. In the past, I have sent wine & cheese baskets or similar, depending on the customer and they did enjoy the idea and recognized our appreciation for their faith in us. We have a lot of golfing customers and I had thought about buying them a round of golf once a year or something that we know each one would enjoy.

    Definitely agree with rewarding referrals - they are our best new customers by far!
     
  8. PostcardMania

    PostcardMania LawnSite Member
    Posts: 163

    Couldn't agree with you more Cara!
     
  9. WheatBookkeeping

    WheatBookkeeping LawnSite Member
    Posts: 108

    Guys, just a reminder, you’ll need to be aware of the accounting entries needed to record the effects of the rewards program on your Income Statement. Call your bookkeeper and discuss what type of rewards program(s) you want to setup. The bookkeeper will want to know the manner in which the reward is redeemed, i.e., gradually or all at once. Does reward qualification accumulate and how? Does the customer have the option to defer the reward, etc., etc., etc?

    You’ll want to use a new Sales account called Customer Loyalty Revenue and offset it with a Rewards Program Expense.

    If you plan to deduct Rewards Program Expenses at tax time(s), the IRS may ask you to prove the value of the reward; so make a relevant entry in your ledger and keep your supporting proof.
     

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