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Taking inventory of customers before setting up a loyalty program

Michael Lowenstein EXPERT RESPONSE FROM: Michael Lowenstein

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QUESTION POSED ON: 19 May 2005
We're a monopolized race course in a South American city, no loyalty program was needed in the past to sustain business. However, because the betting turnover has been dropping in recent years, we're unable to identify our customers -- they just come and go -- and we have no way to track who they are and how much they spend etc. We face constraints from government policy which prohibits any explicit kind of encouragement to bet. What kind of loyalty program do you suggest?

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EXPERT RESPONSE

You don't need a loyalty program....yet. What you badly need first is in-depth customer research: An understanding of who the customers are, who comes to the race course frequently and infrequently, and why, what their alternative entertainment selections are (where, when, cost, etc.), and if those customers have had pleasant or unpleasant experiences at the race course which might color their thinking.

Once the emotional and tangible attributes, and touchpoint experiences, are fully comprehended in terms of customers' likelihood to frequent the race course (or not), you'll then be in a position to a) upgrade processes which impact customer perceptions and b) potentially develop a loyalty program, with both hard and soft benefits.

Find out how to implement sound loyalty programs.

Learn how networking giant Cisco tracks customer loyalty.


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