If you are like many business owners and executives today you are considering the following questions: What is the macro-impact of generally rising prices on my business and my customers? How can I address those impacts? What you may not have considered is the following: Can customer loyalty preferences be a key lever I can use to help manage the impacts of price increases? This short blog post provides a high-level cheat-sheet that you can use to identify key features you should be considering for your 2023 Customer Loyalty Program..
As you probably remember from your introduction to Economics course, a consumer’s sensitivity to price changes differ for different goods (or services). A person’s consumption behavior for a given product changes when the price goes up or down. What we find is that some goods-or-services have inelastic demand while others have more elastic demand. For example, gasoline has relatively inelastic demand since most consumers are locked-into a consumption requirement. Coffee, alcohol, legal drugs and supplements are another example of products with relatively inelastic demand characteristics.
The price-elasticity (or lack of) in the demand for a product is a key ingredient in understanding your customer’s behavior and preferences as they relate to your Loyalty Program. By considering this key facet of your product or service, you can tailor a Loyalty Program that aligns with your customer's preferences and behavior. Ok, enough on the econ refresher...
In July 2023 there is “new information that has come to light”. New technologies can provide some significant opportunities to innovate, surprise and delight your loyalty members. The quick-reference guide below can be used as a quick check to see if your loyalty program might take advantage of some new or different tactics in order to invigorate and focus.
Some key factors to consider:
Very few products have strongly "inelastic" demand. If yours does, you should be making sure to structure your program to maximize your benefits while aligning with your members preferences
Member Preferences: Receive Max Value and Ease-of-use
The items on the “elastic” list are typically purchased using disposable income and the member profile/preferences can be vastly different than the majority of inelastic program members’
Member Preferences: Privacy, Unique and VIP experiences
Whether you are a small business launching a Loyalty Program, or a large an established Program, the Pravici TLP platform can provide innovation that will impact your bottom line. TLP supports the key loyalty features required for either Elastic or Inelastic Products and Services. Is it time for you to implement some fresh loyalty ideas quickly and cost-effectively? Maybe you just want a no-obligation brainstorming session with a Loyalty Wizard or two? Visit Pravici.com or Pravici.io
In the next post we will address the impacts of rising WAGES and how to properly leverage your Loyalty Program to capture your best spenders.