Loyalty programs are essential to many businesses. It helps them grow and retain their customer base when done right. It is difficult to create a successful loyalty program because brands are competing not only with competitors, but also for the attention of every other program your customers are engaging with.
According to Forrester, about 86% of online adults belong to at least one kind of loyalty program and the pandemic caused many brands to evolve their loyalty programs to meet new consumer and business needs. Successful loyalty programs are invaluable; they obtain key first-party data, enable the delivery of relevant experiences, and motivate customers to purchase from your brand instead of your competition. Break through the clutter and deliver a world class loyalty program your customers want to be a part of. Keep reading to learn four ways to grow your member base and revitalize lost customers.
The initial step to setting up a successful program is motivating new members to enroll. Focus on educating potential members about the program value proposition and persuade them to create an account. Ensure your loyalty program is aligned with the marketing vision and strategy of your entire company. Some of the most successful brands promote their rewards program in various ways to help them grow millions of members. Every customer touchpoint provides an opportunity to educate and persuade customers to enroll. Your branding, signage, website, app and more all provide space and opportunities to increase acquisition rates. This step should be laser-focused on what your program provides, but don’t paint with too broad a brush. Give your customers a simple reason for using your program time and time again.
Now that you have customers enrolled in your program, you need to find ways to get them activated. Customers are more likely to engage with a new loyalty program within the first 30 days of signing up. Provide them with some sort of incentive to kick off their member journey. Maybe it’s bonus points for completing their first purchase, a complimentary add-on, or an exclusive discount. Additionally, when activating new members, it’s important that you take the time to educate them on your program offerings. What can they expect, what is your unique value proposition, and what are the special benefits that your program has to offer? Customers want to feel like they are getting treatment and perks that aren’t available to other customers. The activation stage should revolve around educating members about the program and building a customer habit of purchasing through the program.
Once you’ve successfully activated new members the focus must turn to engaging and retaining them. With acquisition costs soaring, retention is crucial for business growth. At this point it’s important that strategies are in place to motivate customers to consistently use the program while also increasing the frequency and size of their purchases. Utilize gamification, experiential rewards and other strategies that play to your loyalty program’s unique value proposition. There are several different paths you can take to drive customer behavior, make sure to iteratively test each one to see what works best for your brand. Employ other types of promotions such as product pairings to increase basket size by incentivizing add-ons or spend hurdles to encourage larger or additional purchases. Utilize tactics that work for your brand, but ultimately ensure they map to key performance indicators and drive loyal behaviors.
For some portion of your member base, customer activity may fall off at a certain point. Luckily loyalty and rewards programs provide the perfect tool for persuading members who are in danger of lapsing or have already lapsed to return and make a purchase. Send members who haven’t made a purchase during a specified time period a win-back message. Use the message as an opportunity to highlight new products, new locations or featured benefits. Additionally, continually test what types of incentives inspire customers to make a purchase. Perhaps it’s a free item for making a purchase, or a percentage off the total check, or maybe it’s a simple “We Miss You” message. Successful approaches will cycle customers back into the “Engage & Retain” stage – your member sweet spot.
Loyalty programs are a powerful tool to deepen your customer relationships. They provide an incentive for customers to provide valuable information about themselves in exchange for rewards and exclusive experiences. Brands in turn can use that information to engage in more and more relevant ways over time. The most successful programs provide engaging experiences that exceed customer expectations.