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Inside Dental Technology
August 2014
Volume 5, Issue 8

Loyalty and Rewards Programs: Truth or Myth?

They’re great for airlines and grocery stores. Will they work for you?

Terry Fine

Historically speaking, when someone thinks of a loyalty or rewards program, what generally comes to mind is an airline’s frequent flyer program, a restaurant’s punch card, or that keychain card from the local grocery store.

When properly implemented, such programs can also aid dental laboratories. Though not as widespread or as frequently used as in airlines or restaurants, the dental laboratory is starting to embrace the idea of rewarding customers for their buying and payment habits. With increased competition and technological advances, the industry is as competitive as ever.

On the surface, loyalty and rewards programs appear to be identical, but that’s not the case. The Wise Marketer says a rewards program is based on the gross amount a customer spends, whereas a loyalty program is centered on identifying and profiling customers, enhancing profits from them, and retaining their business. When done right, both campaigns can help build a company’s profile.

In their simplest form, loyalty and rewards programs are vehicles that enhance a customer’s experience. They ultimately should offer sufficient incentives that provide enough reason for dentists to think twice about switching laboratories. On the flip side, having an incentive-laden and well-developed loyalty or rewards program in place could be what sways a dentist to choose your laboratory over your competitor’s.

TravelFlo Group cofounder John Donnelly says most dentists, on average, use three to four laboratories. TravelFlo specializes in managing loyalty or rewards programs.

Quality and consistent turnaround times are the prevailing factors as to why most dental practices prefer a particular laboratory. An added benefit such as a loyalty or rewards program could help foster a sense of loyalty.

“It really is all about rewarding your ‘A-plus’ doctors,” Donnelly says. “It’s about retention and growth and trying to provide added incentive for a doctor to send in more cases.”

By implementing a loyalty or rewards program, dental laboratories can strengthen one of the biggest challenges facing the industry: the relationship between the laboratory and dental client.

According to a 2013 article from Dentistry IQ, a poor affiliation between a laboratory and the dentists it serves is the fourth-highest reason why dentists switch laboratories. With a rewards program, laboratories can offer incentives to maintain and strengthen relationships with dentists.

“Over time, loyal customers can become bus-iness builders for you, bringing in new customers and paying premiums for additional services,” Donnelly says. “By going the extra mile for your customers, your customers will go the extra mile for you, creating a win-win relationship.”

Some Tips

If you are thinking about implementing a loyalty or rewards program, you may want to consider a few things. First, ensure your program’s objectives are clear. This is of the utmost importance because you want to identify your customers while understanding and monitoring their individual behaviors. In return, your customer will reap benefits from his or her loyalty and associate your company’s name with a new outlook.

Second, keep things fresh. Don’t recycle an offer as this may discourage customers from remaining with your laboratory. Be creative with your program, and make sure that a variety of incentives are available to keep retention and expand your customer base.

Finally, evaluate your customers’ experiences and impressions to make sure their needs are satisfied. Ask them if they took advantage of the most recent loyalty or rewards offer and also encourage them to refer colleagues. This is a great way to generate leads for new clients in an ever-competitive industry.

Like most everything in life, a loyalty or rewards program has advantages and disadvantages, but any business or company—dental laboratories included—would be wise to research whether this could help them. The possibilities of increased customer retention and expansion of your client base should not be overlooked.

About the Author

Terry Fine is the president of AMG Creative in Fort Collins, CO.

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