Measure Success: Loyalty Rewards Programs: Monitor & Control

A loyalty rewards program is designed to promote repeat high value sales. It creates a type of marriage with your customer that aims to keep them from looking elsewhere. Consequently, if your customers are not seeing value in buying again or even enjoying the rewards, your program is likely failing at its objective. 

Measuring customer loyalty is necessary to ensure that you are meeting your goals. Use different metrics to evaluate and adjust your program to ensure that you are growing a staunchly loyal customer base.

This post is concerned with the monitor and control of your loyalty program. Specifically, it discusses different ways of measuring your program's success and offers suggestions for optimization.

Repeat Purchase Rate (RPR)

The repeat purchase rate (RPR) is the percentage of customers that return to make another purchase. The RPR is a great measure of customer loyalty. This information is also useful from the perspective of reducing advertising costs and increasing your bottom line because research shows that repeat customers convert at 12 times the rate of new ones. See how to calculate the RPR below.

It is ideal if you already have a database of customers. Otherwise, your loyalty program will give you that opportunity to begin building one. 

To calculate the RPR, establish the number of repeat buying customers, ie ones who purchased from you again. Divide that number by the total number of ALL customers in your database. Then multiply the result by 100 to arrive at the RPR expressed as a percentage. 

BENCHMARK: 20% to 40% RPR is generally considered a good range. Consider this metric along with the average order value (below). 

Average Order Value (AOV)

The Average Order Value (AOV) refers to how much in dollars customers spend on each order. Some nickname it the measure of 'customer love'. Retailers can benefit a lot by tracking and increasing this metric. For instance, the AOV allows you to see how well you offset customer acquisition costs. Specifically, increasing AOV reduces acquisition cost and therefore improves your return on investment (ROI) re marketing. This metric is ideally considered along with others like the repeat purchase rate / RPR (above). After all, what benefit is there of having high repeat purchases that are too low in value to justify your service? Within the context of the Covid19 pandemic during which time brick and mortar retail businesses worked fewer hours, increasing this metric is helpful in raising overall revenue. 

All the same, the AOV is sometimes useful in evaluating how well your customers are spending on each order. Calculate this metric by dividing total revenue in dollars divided by the number of orders. The AOV is expressed as that dollar value.

NB. Also use the AOV for creating future success. For instance, if they can afford it, marketers may use the AOV as the base for establishing the value of rewards / reward points to offer advocating customers for referring friends. Ideally however, offer this reward to new referred customers only AFTER they have made purchases to ensure that you break even. In other words, the AOV will not only be the reward but also the minimum value of a new customer's purchases required for earning the rewards.

Redemption Rates (RR) for Loyalty Rewards Programs

The redemption rate for a loyalty reward program is the percent of points that have been redeemed for rewards, ie out of all those that had ever been previously earned. See the formula below. The score for 'total points spent' should include ALL points redeemed since the program's launch. That number must be divided by the total of ALL points ever issued since the program's launch, even those that expired. Then multiply the result by 100 to arrive at a percentage.

Example: 

Redemption rate = (15,700 points redeemed aka spent / 103,000 points ever issued, including expired points) X 100 = 15.24%.

BENCHMARK: The average redemption rate for loyalty rewards programs vary around 14% to 20% and above. If yours is lower, consider making improvements.

Average Customer Lifetime Value (CLV) of Loyalty members

An effective loyalty rewards program should boast an average customer lifetime value (CLV) that is higher for loyalty members, ie over the CLV of non members. 

If you have the wherewithal, I would suggest running statistical analyses that compare independent groups like T-tests (for 2 groups) or ANOVA (for 3 or more groups). Although a group will invariably have a higher CLV than another, eyeballing differences is not always useful because such differences are not always to a statistical degree and therefore may not always warrant attention. For help with this, write me, referencing this post and specifying that you need to statistically compare groups.

A statistically higher member CLV suggests that the current program is performing well and deserving of further investment. Otherwise, the program may be based on an outdated approach and need to be redesigned to better adapt to modern consumers.

Active Engagement Rate (within the loyalty rewards program)

As previously discussed, including engagement in loyalty rewards programs has been shown to engender more meaningful loyalty than the old 'earn & burn' purchases-only based loyalty program. The active engagement rate (AER) indicates how many customers are not only participating but 'actively engaged' with your loyalty program. Engagement relates to non-purchasing activities like referring friends and using social media to review your products, comment on your posts and so on. 

To calculate this metric; divide the number of customers who engaged within a period over the total number of customers within the program. To express the result as a percentage, multiply by 100.

Redemption Cycle Time

This metric refers to the amount of time it takes for customers to move from earning to redeeming awards. The rewards must appear attainable.

To calculate this, consider using a calender calculator. Calculate the number of days between the first awarded rewards and first redemption.

Redemption Cycle = Date of redemption - Date of first awarded reward(s) 

BENCHMARK: Your high-value customers should be able to redeem a reward within 3 to 6 months. However, your next most valuable tier should be able to redeem within 6 to 9 months.

DO's & DON'TS 

• Analyze how well your rewards catalog has been curated. 
• Implement monitor and control systems for your loyalty rewards program, not only as a whole but also its components, like the in-built referral program, free shipping and other forms of subscriptions and so on.

Example: Implement some form of data collection. The ideal for those with a sufficiently large budget is to integrate a CRM with the point of sale that tracks all data required to run the analyses.

• To increase the average order value;
• 
  

  establish minimum purchase thresholds that qualify customers to enjoy desirable benefits. 

  Example. Free shipping on orders over $100

• 
  

  offer volume discounts. 

  Example. Get $3 off if you spend $30.

• offer product bundle. 

  Example. Rather than buy only product x, also buy products y and z for an overall lower price of $105.

• cross sell. 

  Example. With that hair brush, you can also get a bag that was custom made to hold it perfectly.

• To improve a low repeat purchase rate (RPR);
  

  Make the program as appealing as possible with multiple ways to earn points and redeem rewards. Also see how to adapt your program can adapt to modern consumer, how to enjoy the advantage of a tiered program and how to design a program so you give more to higher value customers and do not break the bank.

For instance, beyond rewarding for transactions. also reward customers for engagement, interactions, social sharing, health or other goals related to your brand's core values. 

• Provide cues that remind customers to redeem their rewards. Cues may include visual reminders on your website or brick and mortar store. Cues may also include verbal reminders at checkout or other points of contact.

• Encourage frequent participation. The earning rate and frequency of participation in general have been shown to relate to a customer's redemption rate. 

  Example: Send messages to customers who have been inactive over an extended period. 

• Just as you would with new or pre-existing products, promote your loyalty rewards program. Ensure its memory is alive and well in the minds of your customers.

• Make the process clear and easy to follow. Get tips on how to make an explainer page.
• Ensure that rewards have perceived value. Some examples include the following.
• Personalize rewards as much as possible. In fact, this was the single most desirable factor identified in one research study (by Wells Fargo. 77% surveyed consumers agreed).
• Allow customers to select their rewards whenever possible. This is why I personally like the idea of having a rewards catalog.
• Collaborate with other complementary brands to create rewards. Ensure collaborating brands share your core values and honor your target market's lifestyle. (Wells Fargo found that 70% of consumers agreed with this).
• Offer rewards that are exclusive.
• Remind customers of their total available rewards. Ideally, use email services that integrate with your points database to automatically insert the total points within the body of emails. 
• Reward customers for mentioning their redemption over social media. By rewarding evangelists, you also motivate them to resume the process of earning points.
• Conduct market research on your program to get customer feedback that can inform how you can improve your program.
• Recognize that, outside of your efforts, many other variables impact on the redemption rate. They may include industry, location, ease of redemption, program awareness, the perceived value of rewards and the age of your loyalty program. 

CONTENT RELATED TO MEASURING THE SUCCESS OF THE LOYALTY REWARDS PROGRAMS

• Why the old 'earn and burn' loyalty program model is failing and a new approach for modern consumers.
• Tiered loyalty programs
• Use spend-based loyalty rewards programs to give greater rewards to customers with the highest customer lifetime value (CLV) ... and reduce costs while you are at it. 
• A great loyalty rewards program can not help your business if customers can not understand it sufficiently well to sign up. Create a loyalty rewards program explainer page.
• Incorporate a referral program into your loyalty rewards program. These 2 types of program complement each other. While the loyalty rewards program seeks to retain customers, referral programs seek to acquire new customers.
• Analyze how well your rewards catalog has been curated.

Spend-Based Loyalty Reward Programs Offer Better Value for Higher Value Customers

Previously, I discussed why the old school 'earn & burn' loyalty rewards programs fail in recent times. I suggest that as customers change with modern times, so too shou ld your loyalty rewards programs in modern times in order to be successful. The discussion was also extended regarding how to use tiers for your modern loyalty rewards programs as a major game changer. We also considered that a great loyalty rewards program is no use if no one can understand it. On that basis, we examined how to create a loyalty rewards program explainer page.

In April 2016, Starbucks changed its rewards program from a visit-based to a spending-based system. This post will illustrate why Starbucks and many more companies are making this huge change. I will compare and contrast the 2 types of rewards structure; the 1) visit-based and 2) spend-based program. The key difference between them is how much it costs you to reward customers and how well you reward customers with a higher customer lifetime value (CLV).

Specifically, in the visit-based program, customers earn points based on a milestone related to visits or items bought, NOT on the dollar value of the purchase. However, this often applies with the condition that customers meet a minimum dollar value. Conversely, a spend-based program awards points based on the dollar value of purchases, regardless of the number of visits made.

The health shakes example below is based on the common consumer practices to repeatedly buy their favorite product and to generally not deviate notably from their average purchase value, ie at least when they must pay out of pocket. Consequently, customer 1 continues to buy his favorite shake valued at $10 while customer 2 buys his favorite valued at $7.

The gross cost of the program to you per customer as a percentage is (Reward value / CLV) x 100. 

VISIT-BASED Reward = $10 off after 9 visits

Example of visit-based loyalty program. Customers are required to buy 9 health shakes in order to get a free $10 shake (or $10 off). This program disregards the dollar value of each shake. Therefore customers may buy 9 of the least expensive shakes and opt for the most expensive when reaping the reward of the 10th free shake. In an attempt to keep the program as simple as possible, management may not have stated a minimum required value per shake because the value of all of the available shakes are within an acceptable amount.  Otherwise, they might specify the type of shake that qualifies, like 'high protein' shakes. This program is likely to require only a card and stamp, the latter of which is used to cancel the ten spaces that represent purchases.

Customer 1: ($10 / $90) x 100 = 11%. Smaller reward to the customer with the higher CLV.

Customer 2: ($10 / $63) x 100 = 15.8%. Bigger reward to the customer with a lower CLV and higher cost to you. Among the 2 customers and you (the seller), the biggest winner is the lower value customer. Customer is motivated to spend as little as possible.

Customer 2: ($7 / $63) x 100 = 11%. The only way to maintain the same 11% is if you can somehow force customers to take a reward that is NOT a fixed dollar amount for all customers but the same value as the customer's usual order - a possibility for only some situations.

SPEND-BASED Reward = $10 shake after $90 spent

[Fixed dollar value (NOT percentage) after a set CLV]

Example of spend-based loyalty program. Customers must spend at least $90 on health shakes in order to get the 10th free. This program focuses on the dollar value of each shake while disregarding the number of shakes each customer buys. Consequently, unlike the visit-based approach (and assuming that shakes range in price from $6 to $10), customers must spend more in order to get the rewards (than in the visitor-based version of this program).

 

Customer 1: ($10 / $90) x 100 = 11%. The cost is fixed. The program encourages customers to spend more.

Customer 2: ($10 / $91) x 100 = 11%. The cost is maintained at 11% percent, thereby preventing you from rewarding disproportionately, ie giving higher rewards to this lower value customer. As illustrated above, customer 2 is now forced to wait until well after the 10th visit to reap rewards.

If you want lower lifetime value customers to spend more and faster, you may need to

• motivate customers to earn points using non-payment means like promoting brand awareness for you through social media.
• motivate customers by sending personalized text messages to their mobile phone. 
• expire the points after a given period. 

SPEND-BASED Reward = 10% Off after $90 spent

BEWARE: If you offer a reward as a fixed percentage rate on a sale valued at any amount, like '10% off of your next purchase', again, you run the risk of exceeding your desired cost (re dollar value), ie if you can not establish a maximum order value. 

Customer 1: ($1.5 / $13.50) x 100 = 11.11%. Although rewards are proportionately distributed according to CLV, customer selecting pricier items raise the costs to an extent that may exceed your desired amount if cash flow is a problem.

Customer 2: ($1.0 / $9.00) x 100 = 11.11%. 

Customer 3: ($0.50 / $4.5) x 100 = 11.11%.

DO:

If you want to keep your program costs at fixed dollar amounts;

• provide the option for customers to redeem rewards by 'buying' specific items with points. This can ensure the costs are fixed to the extent that you want. However, do this sparingly, especially with very high value items as you will again run the risk of giving lower rewards to higher value customers. 
• Example: Special edition 'Power' shake priced at 99 rewards points (ie based on giving 10% discount on sale of $10 shake after earning 90 points). The customer can redeem 90 points and pay the balance in dollars or earn more points otherwise.
• 90 points (minimum spend)
•  9 points (corresponding with $9 payable after the 10% discount).

CONTENT RELATED TO VISIT-BASED AND SPEND-BASED LOYALTY REWARDS PROGRAM

• As consumers change, so too should loyalty rewards programs in order to be successful. Here's how.
• Use these results, along with financial and managerial ratios to establish assumptions for a business plan.
• How using tiered loyalty rewards programs can be a game changer.
• What's the point of having a great loyalty rewards program if no one can understand it? Let's talk how to create a loyalty rewards program explainer page.
• The case of Starbucks' change from a visit-based to spend-based rewards program. In the new spend-based system, customers needed to spend $1 to earn 2 stars and could redeem star points for a free item when they had accumulated 125 stars. Previously, customers received a free item after 12 visits (regardless of the items bought during the 12 visits and without restriction which drink they could select as the reward). In the old visit-based system, lower value customers were earning roughly 4 times more than higher value customers. However, Ultimately, after the new spend-based system, higher value customers earned roughly 50% more than before, lower value customers lost over 60% and Starbucks saved considerably.
• The calculations involved in your point system can easily become hard to understand for the average customers. See how to introduce your program in an attractive and digestible way with explainer pages.
• Measure the success of your loyalty rewards program.
• Incorporate a referral program into your loyalty rewards program. These 2 types of program complement each other. While the loyalty rewards program seeks to retain customers, referral programs seek to acquire new customers.
• Analyze how well your rewards catalog has been curated.
• Gift card programs may be designed to be stand alone or an integrated component of your current referral and or loyalty rewards programs.

Resolve Customer Complaints to Extend CLV Customer Lifetime Value

In earlier discussions, we spoke of how well crafted customer experience design contributes considerably to business success. They are a proactive means of preventing problems. However, things can and may still go wrong. This  customer service post discusses elements to incorporate into your customer service response to remedy the situation and boost customer retention for extended customer lifetime value (CLV).

Consider customer complaints as valid concerns with potential opportunity

In order for this to work very well, it is imperative to create a work atmosphere where mistakes can be made and learnt from without undue employee blame and shame. Customer complaints can become opportunities to improve your operations. Swiftly request customer angry feedback. Consider even sharing some of these incidents for training employees (including new onboarding employees) when they train in the related task. In some cases, capitalizing on resolving angry feedback may provide a source of competitive advantage. 

See how Everest Ice & Water, an ice vending company responds so well to questions and distrust from misinformed viewers that they make their brand even more trustworthy. See an example of this in the comments section of one of their videos. This obviously requires someone who is very knowledgeable about the product and brand and is able to keep up with the demands of social media content management.

Viewer: 

I am very familiar with this business and all other machines on the market. Ask this guy why his great machine has had 4 different names on it in the last 7 years, hmmmm. Great very informative video, however any machine made from plastic will not last outside in all types of weather conditions. # Bag Of Ice!

Everest Ice & Water:

Let's talk about some misconceptions about Everest. First, our machine isn't made with plastic. It is made with powder-coated steel. It's designed to handle 6,000 hours of salt spray so these machines can last in almost any condition.

Secondly, Everest has been in business since 2016 so we haven't gone under 4 different names in the last 7 years as you say. However, the confusion can be from other customers white labeling their machines with their custom branding.

Empathize, validate and apologize

Emotionally engage customers. Specifically, empathy, a validating comment and apology can help to diffuse anger really engage customers, especially if you also succeed in the other tips. Regarding apologies, nothing seems to be likely insincere more than someone giving an apology that, in the same breath, subtly invalidates your pain like, 'I'm sorry IF I did X'. Even if the customer's 'concern' appears an unreasonable 'complaint', acknowledge their dissatisfaction, even if to say, 'I am sorry that you are not happy with our service.' Although not entirely an apology, it certainly diffuses the situation as it unconditionally acknowledges the customers discontentment.

To go further, (train employees to) recognize the underlying frustrations. Then confirm in words your understanding of the customer's emotions and sense of loss, not merely from the perspective of a failed product but more personally regarding the impact on the goals the product was supposed to meet. Here is an example.

I am sorry you were delayed like that. The delay must have been very stressful because it affects your ability to prepare adequately for the public presentation on Saturday.

Empower front line employees to resolve matters, promptly

Train your employees to respond. For instance, if a glitch in your operations delayed a client whose buying motivation is time-related, rather than delay the customer any further by needing to call on a manager, the employee may apologize (even if the issue was not his personal fault) before offering a small gift (as a 'thank you' for their patience) or discount on the next service to help the client to stay in line with his goals, in this example, to save time. Notice that this requires you to train employees on the earlier point regarding recognizing the customer's 'concerns' or goals.

Example.

'Given the documents that you already have, our x team can provide a free presentation plan within 2 hours. They could delivery the final product online.'  This example may lead to an opportunity to showcase other services the customer had never used and even open new otherwise untapped opportunities. It may present an add-on opportunity.

Outside of your market research that informed you that customers seek your product for reason x (like to cut costs, be more profitable, be more efficient, etc), learn as much as you can about the customer's predicament by allowing them to vent. Sometimes, the solution may be creative and not necessarily product-related. Here is an example.

'... I see what you mean about how this situations makes it unlikely for you to do everything you need and reach the airport on time by bus. Our messenger will soon make a routine nearby delivery. I will call now to see whether he can give you a ride to your departure gate.'

Remain professional

In their training, use the following to help your employees to present themselves and the brand with professionalism. 

• Do not take the complaints personally. Remain calm. After all, shouting back to angry customers will only escalate their anger. Refer back to the tip above regarding considering complaints an opportunity to improve. However, telling employees this will have not effect if you fail to create a work environment that encourages disclosure without blame.
• If a representative other than the one considered 'at fault' deals with the complaint, there is no use bad mouthing the individual. The current representative should apologize on behalf of the business and consider the matter a failing of the business. 
• Demonstrate an action-oriented approach. For instance, say something like 'Let us see how we can make things right again.'

In conclusion, a well designed customer service response to angry customers has often turned around very bad situations. Take the good situation further. Nudge the customer into your retention and evangelism sales funnels.

CONTENT RELATED TO CUSTOMER SERVICE: HOW TO RESOLVE CUSTOMER COMPLAINTS TO EXTEND CUSTOMER LIFETIME VALUE (CLV)

• Social media content management
• See how a company thanked me for my patience when they turned me into a delighted and loyal customer after their customer service had fallen short.
• Do not be complacent with good customer service. Use a more proactive customer experience approach.
• Use CRM to considerably maximize customer experience, efficiency and, in turn, profitability.
• Know the difference between getting feedback and reviews from business customers ... and when to strategically use each.

Retention Marketing & the Hour Glass Funnel

The Hour Glass Funnel is an advanced stage of the sales funnel. Just to recap, the sales funnel strategically manages key touch points, ie points at which marketers respond to a customer's level of buying readiness with stage-appropriate motivators. Since previous posts did not delve beyond earlier touch points, this post covers a more complete list of customer touch points which are awareness, engagement, conversion and retention. In short, the purpose of the hour glass funnel deals with retention marketing, ie to retain and convert your main product customer into a loyal / repeat customer and sales generating fan / sales ambassador. Essentially, retention marketing aims to extend the customer life value (CLV), aka life time value of customers. 

Goal 1: loyalty or repeat sales

Remember, it is many times cheaper to convert an existing satisfied customer. In fact, loyal customers are highly likely (roughly to 70%) to refer your business to friends. Furthermore, loyal customers are 10 times more valuable than new ones as it relates to revenue. Remember then 80-20 rule? It applies. Stats suggest that loyal customers can account for as much as 80% of a company's revenue. Businesses use many techniques that include loyalty programs. Imagine, you may even include a loyalty pipeline in your CRM.

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Goal 2: evangelism
Unlike the work of a paid sales team, marketing evangelism involves the promotion of a brand not for the promoting person's self interest but for a third party, the brand. Evangelists have a genuine believers in your brand (as opposed to going through the motions in a lack lustre transaction of sales pitch for remuneration). These very valuable customers contribute to the customer acquisition efforts of your business. Naturally, the product must add real value to convert someone into a marketing evangelist. The value should extend beyond the single benefit narrowly associated with the product. For instance, your customer becomes an evangelist when his experience is holistic because, not only was the product very valuable on many levels but so too were the different aspects of his experience like customer support. Furthermore, the passion can be developed by the product's ability to help people to accomplish something that supports larger dreams, political or social will and so on. For instance, kitchen gardening products may be associated with empowering people with healthier lifestyle (something they dream of within the context of genetically modified food and the associate health risks). Marketing evangelists essentially widen your sales funnel in that they reach more leads. They offer social proof which is highly persuasive. In fact, it is more persuasive and therefore more effective in converting prospects into customers than your self praise. See case studies of how companies encouraged evangelism by implementing ambitious referral programs.   

  

Summary of the major stages of the sales funnel

• awareness (make prospects aware you exist)
• engagement (educate the researching lead)
• conversion (make a sale by promoting product value to leads on the verge of buying)
• retention / referral (encourages customers to be loyal, ie to buy again and or evangelize your products and business to others)

Retention Marketing DOs (for loyalty)

• consistently deliver quality goods and service
• be responsive to their (changing) needs
• respond to understanding and resolving problems of dis-satisfied customers. Use what you have learnt as a new FAQ item
• create value like useful content

Retention Marketing DOs (for referrals to others / widening the sales funnel)

• use loyalty programs that encourage customers to engage with your brand in exchange for rewards. (It is also useful to implement that simultaneously increases customer acquisition through referral programs that are designed for loyalty. See the FreeAgent case study.)   


• encourage the customer to interact with your community
• use social media
• for forums, give clear instructions / calls to action regarding where and how to start. 
• Example: encourage members to create a member profile
• encourage the customer to evangelize your products and business via
• product reviews. This involves videos and images. In fact, the latter is useful for lookbooks
• company reviews
• encourage the customer to recommend your products
• using your affiliate program

Retention Marketing Tools

• Facebook groups (not Facebook pages). Allow prospects and customers to be members. Encourage the customers, especially the satisfied and successful ones who can showcase the success they enjoy as a result of your products and or services, example they could post some record of earnings / savings per month.  Company reviews and video interviews can also be posted when customers have positive things to say. Additionally, your prospects can ask questions to the more experienced buyers.
• Wedding registries

Other Retention Marketing DOs

The process is not necessarily linear in that a customer may skip past stages within this and even the basic sales funnel. You must therefore be mindful of their path through the stages and communicate appropriately. For instance, someone using your wedding registry jumps from the top of the basic sales funnel all the way to the bottom of the hour glass funnel and is not necessarily ready for your webinar sales funnel communication.  

 

CONTENT RELATED TO RETENTION MARKETING WITH THE HOUR GLASS SALES FUNNEL

• Brand awareness & brand awareness srategy 101
• Loyalty programs are still relevant that use forms of emotional marketing are more likely to succeed with modern consumers than 'earn & burn' programs.
• Tiered loyalty programs
• A sure way of converting customers into evangelism is customer experience that not only meets customer needs holistically but exceed expectations. This encourage customers to tell a story which essentially translates into building your brand awareness & brand awareness srategy 101
• After deciding on this new funnel, create the tasks in a retention / renewal sales pipeline and or evangelism pipeline in your CRM program for your sales representatives. For instance, the renewal pipeline can include elements like loyalty cards.
• Sales funnels. There are several types of sale funnel. Here is a great introduction
• Using brand storytelling for evangelism
• Broadcast email campaigns: an Amazon case study
• Facebook groups for retention marketing

How to Create a Product Line

A product line is a group of related products sold under a single brand by a company. 

Benefits of a product line 

• A product line enhances a business' chance of having long term success. For instance, a product line creates more opportunities for increasing the customer lifetime value (CLV), ie the among of money a customer spends over the period during which they remain an active customer. 
• Once customers already know and like your brand, marketing all the other products within the product line becomes easier than selling new stand alone products.

How to create a product line

• Decide the focus of the product line. An example includes a specific deliverable perceived customer value to a specific market profile. It  may essentially be the unique  value proposition for that collection of products. Whether it is published, this focus should guide all of your product mix considerations. After all, customers buy benefits and not the physical product or service. For instance, one skin care product line may focus on anti-aging while another may focus on detoxification. This statement may be something like the following. "The [product line X] offers [product x] for [target market] to [unique value proposition]. Unlike [the alternative], we [competitive advantage]".
• Add interrelated versions of the central ideal of the product line. Each variation should be similar enough to be clearly recognizable as being part of the single product line. The differences in the variations should have some justifiable reason like specific customer pain points withing the overall central idea. For instance, your anti-aging product line may include variations for 1) age spots, 2) re-hydration and so on. 
• Add different products that complement previous ones, even if those other products are very different. Consider the circumstances in which the product will be used and the customers' needs. For instance, if you are selling sunblock, you can imagine the customer is likely to use the product in a sunny location. Consequently, you may also be able to sell eye shades. For instance, customers using the age spots variations of the product may be happy to buy a floppy hat to protect them from the sun.

CONTENT RELATED TO CREATING A PRODUCT LINE

• Strategically plan your product line. First establish a unique  value proposition.