How to prepare for loyalty program in 2020?
According to statistics from The Brand Keys, businesses spend up to 11 times more on acquiring new customers than they do on retaining existing ones.
This is despite the fact that the cost of retaining old customers is 5-25 times lower than the cost of acquiring new customers.
Business owners and marketers are of course not ignorant about the importance of customer retention, so then why do they choose not to focus on it?
Simply put, because it’s more difficult and less glamorous to do so. In today’s world, commanding loyalty towards your brand is indeed not a simple task: the customers are spoilt for choice, the market is rife with cutthroat competition, and loyalty feels too intangible an objective when you can instead focus on actual conversions.
However, as the year 2020 approaches, you may find yourself wondering about a brand loyalty marketing program for your business.
Maybe, because it’s not giving you the reduction in churn rate that you had hoped for, maybe it’s completely ineffectual, or maybe, you simply have not had any experience yet with loyalty programs in retail marketing.
Whichever be the case, let us look at a few simple insights which can help you plan a program that can make your brand stand apart from the crowd in the consciousness of your customers.
Loyalty is a two-way street
Having loyal customers is a desirable goal for any business, but before achieving it you need to ask yourself exactly what are you offering your customers in return for their loyalty.
The better that offering, the stronger will be their corresponding loyalty--the simple principle of quid pro quo, in all its glory.
Also, something that businesses often overlook is the fact that ‘loyalty’ more an emotion than a dry statistic.
For your program to be effective, it needs to be centered around visualizing your customers as humans, thereby providing them value where it really matters to them.
To understand the emotions of your customers you can use data and technology.
For example, Epsilon uses a 1:You strategy to combine their vast technical know-how with a customer-centric approach focussed on building brand empathy.
The strategy tries to provide customers maximum value by providing them with real-time rewards, engaging them at moments that matter the most, and using state-of-the-art machine language technology to understand customer behavior better than ever before.
Read how this strategy helped Dunkin’ Donuts helped them achieve a 40% increase in year-over-year spending by their DD Perks loyalty program members.
The road to loyalty is paved with personalization
Loyalty marketing programs that provide customers a personalized experience are definitely more effective than their more run-of-the-mill counterparts.
According to a study by Annex Cloud, 80% of consumers say that they want a personalized experience and are more likely to do business with a company that offers one.
A reward system focussed on individual customers creates great brand recall in the minds of those customers and drives the idea that the brand cares about them personally.
Starbucks, for instance, sometimes gives free drinks as a birthday present to their customers. They also make useful personalized suggestions based on their customers’ shopping history; a customer with a history of buying non-dairy drinks is automatically recommended dairy-free products.
Further value is provided by enabling them to make orders in advance from their Starbucks mobile app, and by providing a clear view of their loyalty reward points on the same app’s dashboard.
Similarly, Chick-fil-A’s mobile app not only allows its customers to completely customize their order but also provides the option of an Allergen filter for people allergic to specific food items.
Based on this filter the customers are shown a menu that only includes the food they can safely eat.
Insightful steps such as these go a long way towards ensuring that customers remain loyal to a brand.
Money helps, but there are alternatives
Direct loyalty points-to-cash reward systems are definitely simple and effective in achieving their objectives.
However, sometimes depending on the nature of a brand and its target audience there might be other alternative loyalty programs that might attract better customer engagement.
Take for example Chick-fil-A’s loyalty program which allows its ‘silver members’ to be generous by providing options to make a gift of reward points to friends and family, as well as the option to donate a meal.
A program such as this associates a certain loyalty towards the brand image by promising the customers that they are doing their bit towards making the world a better place.
Other ideas might involve offering exclusive access for deals and new launches to members of the loyalty program. Amazon, for instance, offers sneak peeks and early access to deals to its Amazon Prime members.
Sephora, instead of products and discounts, offers community-building activities like free make-up classes to its VIB Rouge members.
Using increased customer engagement to build loyalty is also achieved by integration with social-media platforms and other popular services.
For example, Starbucks collaborates with Spotify to enable music lovers to identify songs played in Starbucks shops, download those songs, and save their favorites to a playlist. It is a win-win situation for both brands and their customers.
Customers like to be in control
Providing consumers easy access and control for the rewards they have earned through your loyalty program increases their participation (and therefore engagement) in the program.
Also, it makes sense for a straightforward approach to put the customers themselves in charge of their rewards, orders, and purchases.
The three elements implemented by customer loyalty program leaders like Starbucks, Chick-fil-A, and Kohl’s in their platform are:
- A clear dashboard where users can keep track of their rewards and loyalty points.
- Payment facility via e-wallets or by other means like QR-code scans.
- Ability to order products and services from the same platform. Ordering ahead of time and then picking up orders from the store is also a fairly common and quite popular feature.
The sooner you start, the more you can gain
Preparing online loyalty marketing programs involves convincing various shareholders about their viability, extensive planning, and managing the various resources involved in their execution.
Omnichannel loyalty programs, of course, are even more demanding. However, the efforts which go into well preparing a loyalty program are sure to be rewarding for your business, especially in customer retention.
Also, as often happens with brands that need to focus more on their day-to-day operations, if you find yourself struggling with the expertise to craft a loyalty program, it’s always a good idea to use the expertise of industry leaders such as Epsilon.
Their specialized solutions like Agility Harmony perfectly blend advanced technology with an understanding of emotive branding to deliver impactful customer loyalty programs.
Armed with the insights discussed above and with only a few months to go before we step into the new year, it’s high time you start considering a strategy for revamping or creation of a loyalty program that delivers you all the success you deserve.