The Secret's Out

Should frequency rewards--giving extra stuff for getting more business--be the basis for cementing relationships? On a small scale, it can be worth it, says Gehrke, but she warns that such programs can be hazardous. "They're expensive if you don't know what you're doing; they're also high maintenance, and you can get into financial liability that you can't possibly manage." In addition, she adds, "They can be easily matched by a competitor, and then you're left with no advantage."

The more important aspects of a loyalty program are preferential, personal service, Gehrke says, adding that the most powerful secret in relationship marketing is unanticipated rewards.

The idea, according to Gehrke, is to give regular customers some benefit they weren't expecting, whether it's a gift certificate, flowers or some other kind gesture. "Customers remember such thoughtfulness for a long time," she says.

Experts in this field stress the importance of making your relationship marketing endeavors systematic. Make it one of your weekly routines so it becomes second nature to make regular contact with your loyal customers. And don't ever forget the two most meaningful words you can utter to a current customer that, surprisingly, often get left out. Those magic words: "Thank you."

This article was originally published in the May 1998 print edition of Entrepreneur with the headline: The Secret's Out.