Loyalty or frequent buyer programs can help you grow the marketing for your studio. Many programs are setup as a “thank you” for buying but these programs should be structured so they are a win-win for the studio and its customers. There is no win for the studio if you are just giving a discount to a customer that was probably coming back to make a purchase anyhow. Learn how to convert your program to a win-win and take your studio to the next level.
Bordeaux & Bordeaux CPAs is a Supplier Member of CCSA (Contemporary Ceramic Studios Association) which is a organization representing paint your own pottery studios (PYOP) and ceramic arts businesses. Donna Bordeaux, CPA provided the webinar to CCSA association members as a benefit of their membership in the organization. Their CPA firm specializes in growing PYOP studios with industry specific key performance indicators by helping them grow their studios and minimize the impact of taxes.
Episode Transcript:
I’m Donna Bordeaux. I am a CPA and I’m going to be hosting our webinar for today dealing with membership and loyalty programs. We’ll talk a little bit about what I do specific with the ceramic arts and PYOP industry and we’ll talk about some ideas for programs. After this session too I’d also welcome anybody, I’d love to hear your ideas of what you do and what works for you for your loyalty program. We try to continually gather information to help everyone be more successful and design just the perfect program. Unfortunately the perfect program is just a little bit different for everybody.
First off again, as I said I’m a CPA in Lake Wylie, South Carolina. We have 3 members of our staff here formally. Myself, I’m Donna. I’m the CPA. My husband Chad is also a CPA. Nancy is our administrative manager here in our office. She happens to be my mom. We’re all in the family here and most we find our studios are family owned businesses and we are in that same line up with you. Also, if you hear any barks, hopefully she’s not in my office today but if you hear any barks in the background that’s our security force Dixie.
I am located just outside of Charlotte, North Carolina. I’m in Lake Wylie, South Carolina. I’m on the east coast but we work with studios all across the country. We love working with studios and seeing their successes and helping them grow to their full potential.
First off let’s go ahead and talk about the loyalty programs and what we find right now. There are some common programs out there. We find that studios typically go through a lot of different types of programs. Sometimes they find that it didn’t catch on so they want to re-vamp it. Usually we find that over about 5 years they have 3 different programs in play at any given point. There’s a lot of inconsistency. We do find that a lot of studios have studio fees offer free studio fees with their loyalty programs. Some other common areas where loyalty clubs come into play are dollars after spending. For example, for every dollar that you spend you get a certain number of points which equates to future discounts in the studio. We also see some special events invites based on being a member of a studio program or a loyalty program.
Now, one of the issues that we find why these programs don’t always work is that studios don’t really stick with the programs. You know, a lot of things with business you get excited about a plan and then maybe it doesn’t go over so well and you assume the plan didn’t work. Well, maybe we’ve got to look at some ways to troubleshoot that. We’ll look at those areas today. How to make the plan stick and how to promote the program so that it’s helpful.
A lot of plans I’ve seen can get to be too complicated. When they’re too complicated your staff can’t explain it well, your customers may not understand it well. They may have to bring something with them which is sometimes a problem. Or remember to tell the person checking them out that they’re a member of a certain club or have some sort of info. We need to make the program very easy for the customers to participate and we need to add the excitement level. If your program is just a dollar off for however many dollars you spend, sometimes it’s not all that exciting. You need to have some jazz around it to get people excited. Most of all to get your staff excited to promote the program. That will then influence your customers to be excited about the program.
If you find as you’ve tried some programs in the past and they have failed don’t give up on it. Let’s go back to the drawing board and let’s add some new pieces into the mix to make that program more successful.
First off, what should the goals of a loyalty program be? Often I see that people try to give the customer something and that’s a great idea. There should be a win win for the studio and the customer. What’s in it for the studio too? Make sure that your incentive for the program is to get customers to visit you more often and try out more of your services. That will build the loyalty that you’re truly looking for. Also remember to make this be a center piece in your studio. Use it for promotion all the time. Invite people to join the club. People love to be a member of the club. It gives them a certain little feeling about being a member of something exclusive. That is definitely a big selling point.
Lets get into some specific ideas for what you can use for your plans and some of the plans that are successful in other industries. First, I would recommend that you charge a fee to be a member of an exclusive club. Now a very good example if you want to look at this one is at Books a Million which you may not have in your area, some do. It’s a big discount book seller. At Books a Million every time you go to make a purchase they’re going to ask you, “Are you a member of our Millionaire’s Club, our discount card?” Notice with their title they have called it the Millionaire’s Club not a discount club necessarily. Millionaire sounds like, yeah, everybody wants to be a millionaire right? Their plan, you sign up and you spend a little money at the beginning and then you can save money on your future purchases. You’ll also get special deals. You’ll get email invites to special events. Maybe book signings. You’ll be on the priority list to get first published books when they arrive at the store. You get special discounts all throughout the year.
They use their program for 2 fold. First off it increases their revenues. Because this one in fact you get a 5 dollar reward card when you join. You can use that right on your next purchase. It’s got an immediate effect but it also has long term. We’ve all heard that people will go in and at the moment they say, “Oh, I get 5 dollars off my next visit.” Well, some people will lose that card. They may not come back to the store for not because they’re unhappy but just they don’t follow through. Sometimes a program can help you just increase revenue even if you have those people who aren’t really probably your most loyal customers. They will want to be. Because they want to be part of the club. Everybody loves the club.
You also want to use an incentive for your staff to help. Again, you must have your staff be excited. If your staff is not excited the program will flop no matter how great and how much effort you put into it. You have to have them be excited. I definitely recommend usually, especially in your slower times of the year have a contest for the employees to generate new sign ups for your club. I understand that in November and December it’s difficult for your staff to get done the things they need to get done in the time they have. Let alone explain this to your people who are in the studio. Also, in talking with them about this program those times of year may see your people who are not your most loyal customers. Your slower times of the year, usually it’s your loyal customers who are there year round. Definitely make sure you have some incentives for your employees to talk up your program and make sure that everybody is offered the chance to be a part of your club.
You can use this again, to increase your revenue in the slower times of the year. For example, if you charged a 19.95 fee to be in your club, your paint club, your pottery club, your artist club. Whatever you name it. Take some effort on the name too. You might be just increasing your revenue in the slower time of the year as well which is definitely helpful. No one wants to turn that away. Okay.
Let’s look at what some benefits can be for your club. I definitely recommend that you brainstorm this with your staff. Get them involved as early as possible, to come up with some good things that you want to include in your club. Again, be careful that you don’t make it too complicated but can have some offers that fill in there that you don’t always have to describe to a customer up front. First parties, maybe I had a birthday party. There’s a discount for them to sign up to be a member of a club. That little incentives buys people to have more parties. Or a ladies night discount of exclusive invitations to events. Again, everybody loves to be a part of the exclusive club. Even if you don’t currently have an exclusive invitation to something create one. Yeah, you can let anybody come really but send out a special offer all the members of your club to come learn about a new service that you’re having, learn about a new product. Maybe you have line of mugs or bisque or some new supplies or new canvas. You can invite them for an exclusive club members night.
Next, maybe you offer a discount to bring a friend into the studio or you have a bring a friend night for all your members of the club. That’s a great way to get new people to experience your studio as well. Again, everybody wants to be in the club so maybe you get some new people to join up too. Have a freebie for some slow moving inventory along with purchase of something else. One of the things we talked about is recently in having a minimum price for the experience in your studio. If you have some smaller items that you just can’t seem to move on but they’re too cheap to be on the shelf by themselves maybe you’ll include that. Maybe you get free add on when you purchase something else in the studio.
You can also offer invitations to special events. Maybe you have a wine tasting, a fashion show, a personal chef comes in to promote their services and provide some food for the night. Have fun with it. Also, do some special offers to fill your studio during those slower months. January, September’s a coming it’s not that far off. Get this lined up to have a September evening where you have maybe a mom’s night out for back to school. Or some other events that go along with that time frame. Maybe have an early bird shoppers for Thanksgiving and Christmas season. Fill up that studio those slow times by promoting to your club members. Again, right along with that push them to come in earlier for holiday studio events. You can get the information out to them about maybe offering Thanksgiving platters, Christmas ornaments. Have a Christmas in October special for them. You’ll also be using the email listing to send out a calendar of your upcoming events or reminders for them. That will also help spur on business. Reminders of summer camps for their kids. Things like that.
You can also look at coordinating offers with other nearby vendors. If you have a restaurant, a snack shop, a cupcake shop, coffee shop, something in your area look at coordinating offers for your club members. Maybe their club member lists could be shared with your club member list and coordinate your efforts to build both businesses. Also, if you have some leftover promo items, maybe bags, t-shirts, things like that, you can also give those away with the initial purchase of the membership the club so that they have something tangible. Something they can take home and touch. People like to spend money and receive something in return no mater how big or small. Okay?
Those are some ideas. Get your staff involved. Be creative. Think abut what the benefits can be. Also keep in mind with these benefits they should benefit the customer as well as the studio.
Another potential problem we run into is if the studio knows the pricing is too low I’ve seen lot’s of studios say, “Oh, I can’t raise my prices to 10%. That would be too high. My loyal customers will know when the prices go up.” Your non-loyal customers won’t probably recognize the price increase. The prices do need to increase so that you can maintain a good solid business model.
If you set up a loyalty program in coordination with that price increase maybe the loyalty program can help offset the price increase for a short time. You can get your already loyal customers in there to eliminate the price increase by joining your club but you won’t lay the money on the table for those people who just come to see you once a year. But your most loyal customers are not price conscious, right? Yes, there are those people out there who are not worried about the price of the items. They do want to come to your studio because they recognize the value of the memories their building by coming to your studio. Watch because most times I find that business owners are the most price conscious consumers in their own studio. Be careful of that. Your customers probably won’t notice it as much as you think.
Another mechanism, make sure that you are using this membership program to update your customer information. Your list of customers along with their contact information is one of your most valuable pieces of your business. The customer list is the most valuable if you are selling your business because the new owner will see the benefits of being able to market to people maybe perhaps in a more solid way or maybe in a different way than you have in the past. This is good practice and a loyalty program makes it that much easier to gather that information. Make sure that at a minimum you have their name, address, phone number, and email address. This gives a great excuse for them to give this information because they’re getting something in return. Also, you may want to consider adding in birthdays or anniversaries to help with future marketing ideas to them. Maybe you send out promos for the birthdays before to have their birthday party there or an anniversary gift. That will help you a good bit on marketing if you take advantage of that.
Lastly, a really overlooked piece, sometimes we do this in a very informal way but keeping track of it formally will give you a lot of good information. Track your marketing by asking how they found out about your studio. It’s as simple as saying, “Oh wow, your first time here. Tell me a little bit about you heard about us,” and track it. If another customer has referred them to your studio you may even want to send them a thank you note and maybe some sort of an offer for being a member of your club.
Our last idea. Don’t forget, keep it simple, okay? Don’t create a nightmare with your program and make sure that your run this through what your pint of sale is capable of doing. You want to make sure that the program is easy to administer as well as being able to keep track of it in the point of sale at the time of checkout. Make sure you take a look from your point of sale system as to what they offer first. That may be a good help in designing your program. For example, I know that Bend offers the immediate set up of giving a reward in dollar amount per dollar spent. They also have some add ons with Bend that will allow you to do some of other fancier things like offering levels where they get different things at different levels.
Take a look at your point of sales system. Investigate that before you jump into the design to make sure that what you design can be administered easily. You really don’t want to have to have your customers keep up with the special little cards or the numbers to be in the program. Be able to look it up by their name and know that they’re in the program. That will help you a great bit. Also you want to be able to track an expiration date for the program. Make sure they renew annually is you have … or you can do monthly or quarterly programs as well. Make sure that you have the ability to track an expiration date for the program so that you can make sure when the customer’s checking out … Again, another good example of this at Books a Million. When you check out they’re going to say, “Oh, your Books a Million Millionaire’s Club card expired would you like to renew that today?” They’re going to remind you of the benefits at the checkout as well.
Work backwards from your point of sales system as well or the other things is if you find that your point of sales system is holding you back don’t hesitate to look at other systems that may help you increase your revenue by being able to administer a program like this better.
Those are some of our top ideas. Our session today is recorded so if you’d like to go back and re-review these you’re welcome to. This will be posted on website. In our dealings with studio owners we can help with making their life simpler so that they can grow their business faster. Looking at the accounting and bookkeeping systems, the tax preparation and keeping that simple, along with the payroll processing. Even looking at incentive pay plans and your point of sales system. Whether you’re opening or selling a studio, we assist with that on a regular basis. If there’s anything we can do to help you grow your business we are anxious to do that. We love this industry and really want to see all of the individual owners succeed.
If you’re interested in talking with us more about how we can help you with your growth please visit our website at pyopaccounting.com. There you’ll see on every page you’ll have an offering where you can sign up for a free consultation. I also encourage you to check out some new tools that we just added to our website as well as the blog. We have one blog post where a lot of our content for this webinar was derived about a year ago on the loyalty program as well. You can reference this information there and take a look at some other things on pricing and promotions for your studio. We even wrote a book specifically for studio owners about The 10 Most Expensive Tax Mistakes That Cost Studio Owners Thousands. If you don’t have a copy of this in yet please make sure you catch up with me at the convention or you can request one right through our website as well.
I hope this has been informative for you. Again, if there’s anything I can do I would be happy to help you. Also I’d love to hear your feedback on how your plans are set up and how they operate. I will open this up for questions. I’ll stay on the call a few more minutes. I’ll open up everybody’s mic here in just a moment. You can feel free to ask your questions. If you need to run you’re welcome to do that as well. Thank you for being here with me today. Thanks. Have a good day.
