Starting a continuity program is a great way to generate extra income, particularly if you already have a group of customers who buy regularly. This also works well if you sell anything that customers buy repeatedly.
These are also referred to as customer loyalty programs.
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Some ski resorts, for example, offer a unique discount package on their lift tickets. If a user buys a package of 10 lift tickets, he or she doesn’t have to pay the entire amount upfront. Instead, his or her credit card is automatically charged each time one of the tickets is used. This way, customers only have to be sold once, even though they end up buying ten times.
This has proven true for other businesses where examples would include book clubs, gyms, recreation centers, an ongoing maintenance agreement, or wine clubs.
Monthly subscription or membership programs are becoming very popular on the internet. People who provide others with regular services or information, set things up so that they charge their customers consistently, for uninterrupted service.
If you were to try a similar strategy in your own business, you could either provide service and bill their credit card until they tell you to stop, or until their contract runs out.
Many businesses with continuity programs or long-term contracts come to treat these customer revenues as critical to their ongoing cash flow. This becomes consistent and predictable revenue.
There are a couple of different types of continuity programs. These include open-ended programs (these continue until the customer fails to pay or cancels) and closed-ended programs (these require the customer to agree on a fixed number of deliveries).
Regardless of the program you offer, be aware that shrinkage will occur. A percentage of customers will drop out of the program or fail to use their regular deliveries. How much shrinkage you experience will depend on your product, service, program, cost, and ongoing customer care efforts.
Safety Tips
The most successful sales of continuity programs are made at the point when a customer is making his or her very first purchase. Here are some offers with which you might approach customers.
- Advertise a brand new program designed to better meet their needs
- Advertise the benefits of buying into a long-term program
- Bundle goods and services that customers can’t buy separately
- Offer a price reduction, if necessary
- Let a spouse or friend join for free.
Here’s a few other bloggers takes from the web.
Can A Customer Loyalty Program Get You More Sales? – We hear complaints about the lack of loyalty with today’s customers. When was the last time you did something to strengthen the relationship with your customers? Let me show you how and why a customer loyalty program can be a major tool …
Loyalty programs can reap financial rewards – Frequent buyer programs, also referred to as loyalty programs and reward programs, have become a critical retention tool for companies searching for unique ways to add value and, in turn, build customer loyalty. …
Develop Customer Loyalty Through Awards and Recognitions – If you are looking for ways to develop customer loyalty, think about starting an award or “spotlight” program. Or look around you and see if you can enter one of your customers into a third-party award program like Elance’s. …