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Rewards Program for Customers

Discussion in 'Business Operations' started by spitfire3416, Feb 20, 2014.

  1. spitfire3416

    spitfire3416 LawnSite Senior Member
    Messages: 553

    It suddenly occurred to me that no one in this industry offers any kind of rewards incentive program for customers. Maybe their are some but I've never seen it. Credit card companies, retail stores, grocery stores etc. capitalize on this but never service industries. Why? It's ingenious. It keeps customers always coming back and even more importantly, spend more. I've been thinking lately of starting a 1-2% rewards program that's exclusive for full maintenance customers. I feel this could in turn attract more customers to take part in one of our maintenance packages. Not to mention the potential increase in loyalty, better yearly customer retention and overall spending of those customers.
  2. kgcs

    kgcs LawnSite Senior Member
    Messages: 342

    The reason you don't see many of us doing it is because it would cost us 1-2%. The other companies get paid to do it. If you read the fine print, they sell information to marketing companies about what you buy. That in turn pays for the reward program. Its a win - win for both the store and consumer but at the same time violates the consumers privacy.
  3. spitfire3416

    spitfire3416 LawnSite Senior Member
    Messages: 553

    Hmm I've never heard that before but ok. I'll look into that. But take subway for example. They have a points card you can use every time you make a purchase there. They never took any of my information. So I don't see what your talking about here. They do it solely for the purpose of your loyalty. They know that if you have the card your more likely to spend more with them and for longer. That's what I'm talking about here. You say because it would cost us the 1-2%, but don't sale promotions cost money. If you offer a 5-10% off promo for a service your losing even more than that. How much does it cost us when a customer leaves us because the lco down the street is charging $1-2 less per cut? Maybe this can entice them to not want to. How much does it cost in advertising to get more outside work? Besides you don't even have to necessarily lose the money. You just raise the price up a little to account for the discount you give them.
    Posted via Mobile Device
  4. A. W. Landscapers  Inc.

    A. W. Landscapers Inc. LawnSite Bronze Member
    Messages: 1,285

    Don't you think that's a little unethical?

    It's like the car dealership's coupon for $1000 off any purchase but the coupon is only valid if you present it to the salesman prior to any deal being made and it is only good if you pay the sticker price.
  5. arkansas502

    arkansas502 LawnSite Member
    Messages: 100

    I don't think my customers would appreciate me raising the price to make up for a coupon. You would lose several accounts that way. When I offer 15% off spring cleanups, I'm doing so to gain more annual contracts which would make up for the 15% because I got a new year round customers. Don't offer a program just to gain customers and then screw them.
    Posted via Mobile Device
  6. spitfire3416

    spitfire3416 LawnSite Senior Member
    Messages: 553

    it's nothing like that. and no i don't think it's unethical at all. which raises another point. why is it everything done in every other industry is not acceptable for our industry? i constantly notice that on this site. i remember you commenting on a thread i started about advertising with a "as low as $30" marketing approach. you were very against it, yet i see this every day in other industries and see nothing wrong with that as well. but that's getting off topic.

    i've seen many guys on here talking about upping their rates to account for credit card charges. so what's wrong with upping your rates by 1% to only give them that 1% back. if upping your rates to pay credit card transaction fees are ethical, explain to me how upping your rates to give those savings right back at the end of the year is unethical. first of all, let me just set the record straight. i'm not even saying i would definitely do that. that was just an add on suggestion based off the idea of upping up rates to account for credit card fees. for arguments sake let's just throw away the idea of upping the rate. besides, the main point of this thread was about rewards to customers who spent a lot of money. i make one little comment about MAYBE raising it up a little and everyone turns it into some money making scheme. in all honesty, i'm actually perfectly fine with giving a customer back 1% of their spendings with me if it meant making them an overall happy and loyal customer. all while enticing them to go with a year round full maintenance plan. If a customer spends $3000 with me for the season, i really have no problem with giving them back $30 at the end of the year towards a future service. no one on here rewards there customers with anything? i understand this a little harder to do when you're small, but for the guys who are running crews and have 100+ accounts, at some point you have to start looking into ways on how to make your company stand out a little more.
    Last edited: Feb 21, 2014
  7. A. W. Landscapers  Inc.

    A. W. Landscapers Inc. LawnSite Bronze Member
    Messages: 1,285

    First off, I was against how you worded your rate "as low as $30" since that price didn't apply to anyone whose property you had absolutely no intention of ever charging $30 to service…this is off topic for this thread so I won't address it any further unless you want to go there again.

    Second, if you don't think it is unethical to artificially raise your prices for the purpose of giving your clients the false impression that they are receiving a discount when in fact you are charging your full regular price, then you and I have a different definition of what "unethical" means.

    I'll try to keep this simple for you. Credit card transaction fees are job related business expenses that your business must cover the cost of from the revenue you collect from the client. The credit card transaction fee is an expense that would not exist if the client chose to use a different method of payment (cash)…it is an additional expense that that specific client is adding to that specific job…it is no different than the client adding additional work that requires you to work 1 hour longer on the job or the client adding additional material…these are job costs that the client is responsible for paying…it comes out of their pocket, not your pocket.

    If you want to give the client a discount of 1% off, that is a job expense that you are responsible for paying for out of your pocket, not the client's pocket…the client didn't ask you to add this additional expense to their project…this would be the same as you deciding to add 5 Crepe Myrtles to the job and then expecting the client to pay for them when they never agreed to the additional material and the expense that comes with it…that expense comes out of your pocket, not the client's pocket.

    If you think your prices are too high and believe that your clients deserve 1% back, just lower your prices 1% and give them a fair price from the beginning.

    Your clients will most likely see right through your $30 off on future work that is going to be priced $30 too high "rewards program". If I was your client and you told me that you were going to give me $30 back for the job I paid you $3000 to do but in order for me to get my money back I have to give you more money, I'd tell you to go pound dirt because you just told me that you screwed me out of $30 and now you want to screw me out of more of my money…No thank you, you're fired.
  8. spitfire3416

    spitfire3416 LawnSite Senior Member
    Messages: 553

    dude, WHAT are you talking about haha. you make absolutely no sense. who's screwing anyone out of money? it's a discount for future services! so let's go back to the subway deal. customer spends money with subway and after a certain amount of money spent they get, lets say, a 6 inch sub for free. you're going to be upset about that???? you're going to go tell the guy to go pound dirt??? you're going to tell them that they are screwing you out of money?? this is the same kind of deal. depending on how much a customer spends with you determines the amount of savings they can get for future services. i don't understand why you don't get that.

    you need to get off the whole upping the price deal second of all. i wasn't even planning on doing that. when i first started the thread i had no mention of it. i only suggested it as a possibility for the guy concerned with giving up too much of his profits. you're missing the point of the whole marketing strategy which is to entice people to KEEP SPENDING.
  9. spitfire3416

    spitfire3416 LawnSite Senior Member
    Messages: 553

    you're making false assumptions. who said i thought my prices were too high? if anything, they're right in the middle. which i think is fair. if you read the initial post you would understand that it is meant to entice people to choose a full maintenance plan. you would understand that it's meant to keep people spending more. this has NOTHING to do with giving money back because i feel i'm charging too much. it has the same purpose of any rewards program, to keep the customer spending more.
  10. JFGLN

    JFGLN LawnSite Bronze Member
    Messages: 1,023

    Clients don't want rewards. They want quality service that is reliable with good communication.

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