Pre-Paying Customers

In my wallet, I've got a document.A document that swears my allegiance.
It doesn't swear allegiance to a country.Or a city. Or my local council (God help me, if I did that).It swears allegiance to caffeine at the Massimo Cafe in an Aucklandsuburb of Takapuna.
Ten little tabs on that plastic coffee card enable me to savour tenbig lattes, in a big latte bowl.
===================================So what's new about a coffee card, you ask?===================================Almost every cafe you've been to has some form of loyalty card.You drink nine coffees. You get one free.Nope, this card doesn't work that way.
It's prepaid.You pay for nine coffees. You get one free.
===================================And yes, I realise you've perceived the difference already===================================It's the prepaid factor that's come smack, bang into play.The prepaid factor that you get with a Borders book store card.Or the prepaid Vodafone card that you got with that snazzy mobilephone. Or the prepaid '10 Movie Pass' at the Hoyts Cinemas.
Do you see loyalty?Do you see consumption?Do you see how one tiny little card is playing super-salespersonfor these companies?
===================================Which is all very fine you think, but hey, I don't run a cafe===================================Agreed. But that doesn't mean you can't run the prepaid loyalty, eh?
Let's take an example:---------------------Let's say you train businesses for instance. You know thekind-workshops and seminars. And let's say you hold a workshopwhere about fifteen people turn up. Now what are the chances ofthose very same businesses, turning up for another workshop in thenext two months?
===================================Try saying zero...===================================Because it's more than likely that a business that's just done aworkshop with you, is not going to do a workshop within the nexttwo months.
But let's make this scenario truly bizarre.
Let's say you not only want the businesses to attend your workshop,but you want them to attend six workshops in the next 6-8 months.How could you achieve this remarkable feat?
===================================Um, Prepaid loyalty, of course===================================At the point of purchase, a client is more than willing to purchasemore from you. So if you make the right offer to the client, andget them to pre-pay, you're creating three core factors of marketing.
1) Increased cash-flow.2) Increased consumption.3) Segregation of customers.
===================================Let's sashay onto Point 1, shall we?===================================Point 1: Increased cash-flow: Even a dope can figure this one out.Massimo cafe gets my money before I've even sniffed my firstcoffee. Borders gets my money whether I'm in an educational mood ornot. And yes, if you're in the training business, your client buysinto six workshops long before you've got the content out of thedoor.
And hey, cash in the bank is always the way to go, but it'sconsumption that really makes the difference.
===================================Point 2: Increase in consumption===================================You buy the prepaid phone card, so you use it. You go to thosemovies because you already paid for them in advance. And here's theitsy-bitsy secret to consumption. The more you consume, the moreyou tend to consume. You drink coffee, because you drink coffee.You have a favourite restaurant, because you've been there morethan once before.
If you do just about anything often enough, you build a habit. Thishabit is great for you as a customer, because you know in advancewhat you're going to receive. So you're comfortable; relaxed;unconcerned. And in most cases, looking forward to the experience.
As a business, consumption means exactly the same thing, but fromthe opposite point of view. The more the customer gets to know you,the more they understand you. The more they understand yourproduct; your service, the more they like you (if you're not apest, that is). And the very act of repeated consumption buildsconsumption. Which means the customer, having tasted your offeringrepeatedly, is now more likely than ever to keep coming back.
If you're feeling really grrrrrooovy about the prepaid concept,hang in there, while we head over to how 'pre-paid loyalty' bringsa clear segregation of customers.
===================================Point 3: The segregation of customers===================================Now here's what happens when I buy a prepaid card at Massimo cafe.At the end of my ten coffees, I get to put the card in a bowl andwin a prize. Well, lookeee at who's putting those cards in thebowl. Why it's the people who're drinking themselves to caffeineheaven, that's who.
Notice who are 'the folks' attending your six-part workshop. Let'sjust call them your big-time consumers. The ones who keep coming tothe movies and chomp through that popcorn are...indeed not 'normal'customers. They're not folks who drop in and drop out. These arecustomers who're sticking around, whether you like it or not.
===================================And so why on earth would you treat them like any other customer?===================================Why wouldn't you give them special privileges?And invite them to be part of an inner-circle of sorts?Why not segregate these customers from the rest, because they'reindeed different from the rest.
===================================So are you headed towards pre-paid loyalty or not?===================================Because with pre-paid loyalty, you can take the 'not-so-interested'customer, and turn them into 'evangelists' of sorts. And what'sreally cool, is that it applies to pretty much every business youcan think of.
Just ask the local pre-paid undertaker :)