You bet your life there is, and the battleground gets fiercer every day as companies fight to get not only your business today, but your loyalty for life.

At the heart of the latest round of ‘marketing warfare’ is the simple fact that it costs companies five times as much to get a new customer as it does to keep an existing one. When coupled with the fact that an unhappy customer will tell 10 people yet a happy, satisfied one will tell only 5, the impact on the bottom line becomes very measurable, very real and very powerful.

The ammunition being fired by the big companies is in the form of ‘loyalty programs’ and if you don’t think they are potent, just open your wallet and count your cards. Chances are you’ll be as surprised as I was when I discovered that I had 6! The reality is that one third of companies with over $200 million in sales have loyalty programs, and another one third are planning on launching one over the next two years. All of this activity has been possible because of advancements in the technology of data base marketing, enabling businesses to easily track the spending habits of their customers, sort them into clusters and actually develop relationships with them.

Take Air Miles for example; launched in 1992 from a Toronto hotel room with an original goal of enlisting fifteen leading companies as sponsors and enrolling 1,500,000 households into the program. Today, according to CEO Craig Underwood, over 70 sponsoring companies are rewarding their loyal customers with Air Miles travel miles, and over 4,000,000 households have joined the program. By adding a Coalition Database Marketing dimension to the original Air Miles concept, sponsors can share developmental and on-going costs, learn about the shopping habits of their customers and non-customers and develop innovative, highly targeted marketing strategies to acquire new customers and increase the loyalty and profitability of current ones.

Unfortunately thus far, many of these programs provide a ‘reward’ for frequent purchases only. This has enabled those firing the first ‘round of bullets’ to boast a higher level of customer loyalty without having to develop strategies for upgrading their quality of products and/or services. Loyalty programs will not make up for inferior products, pricing or service, at least not for long. The good news for Customers is that as more and more loyalty programs flood the market, core products and services will once again come under scrutiny as ‘loyal’ customers become ‘fickle’ customers in their lifelong search for the best value package.

Yes, there really is such a thing as customer loyalty, and yes, loyalty programs can work for any sized business when they are part of a larger integrated marketing strategy that is focused on satisfying and delighting customers consistently, creatively and credibly. It is these satisfied, delighted customers who become loyal customers and ultimately advocates (‘raving fans’) of your product or service – the highest level of loyalty. What rung of the ‘loyalty ladder’ are your Customers on? Make a ‘battle plan’ to move them up to the highest level and keep them there… for life!

Ann Larsen, business performance coach from Simul Corporation, Custom Learning Systems can be reached at 905-294-1260, fax: 905-294-3266 or e-mail: alarsen@simulcorp.com.