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Creating loyal customers is an important part of relationship marketing. Among their many benefits, loyal customers are repeat customers, a referral pipeline and more opportunities to spend more money. In fact, according to new consumer research from Marigold, 68% of consumers worldwide will pay more to buy from brands they trust.
However, maintaining loyalty in a competitive market has proven to be tricky, as 37% of consumers have moved away or become less loyal to a brand they previously loved in the past year.
This is where loyalty programs come into play. A successful loyalty strategy provides customers with tangible value and creates an emotional connection with tailored messages. However, implementing a loyalty program can be difficult. Here’s where to start:
Related: Like inflation, loyalty programs are more important than ever. Here’s How To Create One That Will Stand The Test Of Time.
1. Define your goals
Take a moment to think about what you want to achieve. Ultimately, this comes down to aligning the goals of your loyalty program with the goals of the company as a whole. Are you growing your customer base, retaining existing customers, improving sales or driving repeat business? These are important factors that should be explained in advance.
Mapping these goals involves understanding which customer segments you hope to target, which rewards or benefits are important to them and which KPIs you need to track to measure success.
Having a clear idea of these terms will help you decide what type of loyalty program you need.
2. Know your members
An important consideration for any loyalty program is deciding what type of rewards will attract the members you want. What benefits do they want? Remember, it’s not always about the biggest discounts but rather it’s about recognizing the needs and wants of each individual.
So don’t guess… ask! The acquisition of passive group data through surveys, polls and other interactive experiences becomes very useful in relationship marketing. It takes the guesswork out of the customer’s wants and needs so that loyalty offers can be personalized. Research has found that 62% of consumers say their favorite brand treats them like an individual, and 79% say they are more likely to engage with a personalized email tailored to their interests.
The bottom line is that awards are not the be-all and end-all. Make sure what you offer is relevant to what customers want.
3. Choose the right program
Once you know your goals and understand your customers’ needs, you can find the right plan to deliver both. Want to drive engagement and repeat purchases? Try the punch card system. Do you want to grow long-term customer relationships and drive new customers through a loyalty funnel? Try a tiered program where rewards and benefits increase the more they buy or engage.
4. Be broad-minded
When launching your loyalty program, make sure you do so with consistent, compelling and concise messaging across multiple channels. That includes your website, email list, SMS and social media, at a minimum. If it works, expand it to in-store items and into external channels like advertising.
Regardless of the channel, your messages should focus on the value, benefits and rewards of participation. Don’t forget to get clear consents from your audience, both for the communication you will send about the program and how you will use the data obtained from it. And, of course, have a welcome email in the hopper sent to each new member who joins, thanking them and providing more information about the program and its value.
Related: Customer Loyalty Is Your Holy Grail for Success. Here’s How to Cultivate.
5. Grow up. Prepare. Learn
Launching your loyalty program is not the end of the process; it’s just the beginning. Now, it’s time to monitor engagement, feedback, KPIs and more with indicators that require action. Looking for internal indicators of success is important, but this can also mean engaging with your audience through surveys and feedback forms to ensure you continue to deliver value. This allows you to iterate and improve, as well as adjust and adapt to requirements.
And, of course, continue to promote the program to new members through all channels and opportunities.
With these tips, you’ll be able to offer an engaging loyalty program that improves customer retention and drives business ROI.
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