Why Customer Loyalty Programs Targeting New Movers are Smarter Than Groupon

Published by Target Marketing Magazine

By Brian Mattingly

March 23, 2011

As the uncertain economy continues to throw curve balls at business owners and consumers alike, customer loyalty programs have emerged as a way to develop long-term clients. According to the 2010 Accenture Global Consumer Survey, 52 percent of respondents opted into customer loyalty programs in 2010,compared with 45 percent in 2009.

Even if you already have a customer loyalty program, it's important to analyze and target the correct customer demographics,along with the various types of loyalty marketing platforms,to ensure you're building the right program for your company.Attracting the right customers will benefit your business in the long run.

New Movers: An Example Demographic One way to implement a successful customer loyalty program utilizing customer demographics is to specifically target new movers, people who have recently transitioned into your market

area.

Despite the economy, moving is still common among Americans,whether they are young and seeking change, relocating their families for work or ending a career and retiring. The U.S. Postal Service reported that there are over 43 million address changes processed in a year. New movers are a prime demographic to target as they tend to create an increase in household spending.

The new mover demographic is a group of consumers who are seeking out businesses and services to fill their daily needs. Data suggests that new movers are five times more likely than established residents to become loyal. Anecdotally, a woman in North Carolina contacted me at our office headquarters and told me her family had relocated to North Carolina due to her husband's job transfer. Shortly after they arrived, her husband left town for job training and she was forced to acclimate to the new community on her own. A local restaurant sent her a gift certificate welcoming her to the neighborhood and inviting her and her kids for a free dinner. As a result of the restaurant's hospitality and sincerity, she and her family have visited the establishment a couple times a month for the past 10 years. If she hadn't received that one-time significant invitation to try the restaurant, she may well never have

visited.

For any service-oriented company, reaching out to a portion of the population that is forced to build new relationships is one way to get in front of a consumer who is eager to become loyal. A study conducted by MoverTrends.com in 2009 stated that new movers spend more on average in their first six months than a typical consumer does in three years, totaling nearly $170 billion every year. Targeting them early can result in significant long-term

business.

Loyalty Programs vs. Groupon I was once told by a prospective restaurant client that running a discount deal to the masses—via a site such as Groupon—seemedlike a much more economical proposition than offering new movers in his market a significant invitation to try his business. This theory has appealed to many in the past few years, as online deal sites have made a big splash by presenting one-time deals to consumers who are looking for a big discount on products and services. Do these big, one-time discount programs typically produce long-term customers? It's hard to say but the chances are slim.

While it may seem initially inexpensive to incorporate shotgun marketing and reach out to a mass of people rather than specifically target market, it can end up being more costly and leave you without a profit in the end. "One-time" discount offers are not necessarily going to generate returning customers who may spend money for years to come. Often, consumers who react to this type of marketing come to get your discount and then run to the

next one as soon as it's offered. Loyalty programs are a more strategic approach to getting new customers and retaining them.

Brian Mattingly is the Founder and President of Atlanta-based welcomemat Services, which provides local businesses access to new, loyal customers in their communities. For more information,visit www.welcomemastservices.com.