Loyalty programs have witnessed a dramatic shift in recent years. As competition increases, loyalty programs have evolved far beyond punch cards. For a vast majority of consumers, loyalty programs are a growing part of their shopping experience. Thus, having a robust customer loyalty program can help a company build sustained and deeper relationships with its customers.
While some people will join a loyalty program to get exclusive discounts, others are simply loyal to get bigger discounts or unique rewards. Regardless, businesses that implement loyalty programs are finding that they must start coming up with new strategies to motivate customer engagement and brand advocacy. The key is to build a creative loyalty program that excites your target consumers. Here are the top 6 steps to strengthening customer retention and mastering customer loyalty.
Carefully Research Your Customers
Before implementing a loyalty program, you should carefully research your customers. Start by analyzing the nature and size of your business and create a loyalty program that fulfills your unique set of requirements. If you already have a loyalty program, you can utilize customer data and analytics to further improve your program.
Make sure you come to understand customer expectations and current market trends so that customers respond well to your loyalty program. To do that, use the following questions as your guide:
- What key metrics will you use to define and quantify the success of the new loyalty program?
- What customer needs and behaviors along the path to purchase must you influence?
- What is your primary business goal for your loyalty offering?
- What customer segments will you target to maximize value generation?
Pro-tip: Keep your loyalty program simple. Make it easy for your customers to sign up and earn rewards.
Optimize The Customer Experience By Delivering More Value
Study your customer engagement journey and focus on creating meaningful value for your customers. This analysis will provide you with helpful insights that you can use to improve customer retention. You can dive deep into customer behavior using analytical tools that help predict their shopping habits, hidden buying patterns, buying history trends, and more. This enables you to find answers to important questions such as:
- Who are your loyal customers?
- Who is likely to churn?
- When will they most likely to purchase again?
- What is the most effective incentive to improve retention?
The loyalty program that you offer should drive a specific customer action (behavior) that effectively delivers favorable gains to the business.
Define Engagement Levels
You need to define the desired levels of customer engagement. A perfect loyalty program campaign should be one that engages your target audience throughout their entire customer journey. This spans the entire life cycle from their first purchase to dormant activity and re-engagement. This can only be done when you fully understand your customer journey.
Consider offering rewards or benefits such as loyalty-focused communications, location-based engagement, redemption opportunities, credit card partnerships, loyalty-specific features and perks, referral benefits, and a personalized loyalty profile.
It is also wise to consider adding tiers for your loyalty program to add segmentation. Implementing tiers for your loyalty program can increase brand activity by enticing customers to purchase more. Tiers can also help to better segment the dedicated customers from fair-weather ones and give valuable insights regarding certain products or services. Experiential rewards are especially popular since they add value to the customer and make them feel special. Think of options you could include to give your tiers a sense of exclusivity and boost perceived value.
Enhance The Emotional Connection With Your Customers
You should try to incorporate a branded or personalized touch to your products or services. Customers love exclusivity. They admire the VIP treatment. So, find ways to make your participants feel important and appreciated.
One special tactic that you can leverage is to set up exclusive deals and discounts for your customers through your social media channels. Honor your top spenders by giving them priority services and unique rewards. More importantly, give your top customers an exclusive invitation to memorable events, VIP access to product launches, and distinctive experiences. It’s all about the human element and what your customers will covet in exchange for their loyalty. Focus on delivering a portfolio of compelling benefits and interactions. This of course, resonates with customers in a very compelling and memorable way.
Provide Intrinsic Customer Value While Designing Your Portfolio
Engage your customers using a range of emotional and rational benefits. Make sure your loyalty program portfolio includes these elements:
Also, keep in mind that you don’t have to stick with one form of reward. Customers often get bored with some of the older or traditional traditional rewards. So, test your loyalty program on a routine basis to see what really works well for your customers. Differentiate yourself from the competitors and give them a solid reason to shop more with you. Give your customers an opportunity to exchange earned points with a tangible reward such as an activity, a trip, or even a free hotel booking of their choice.
Build A Loyalty Program Model That Can Evolve
The loyalty program that has a robust design, aligns with your loyalty objectives, and can evolve over time, will create the best value for your customers. This, in turn, provides the best outcome for a brand.
The right delivery model should be data-driven and based on a continuous fact-based “test and learn” methodology. It should be clearly customer-centric as discussed in the previous pointers. It is important to balance customer needs, behaviors, and expectations.
Benefits Of Having A Unique Loyalty Rewards Program
- Boosts the revenue of your business.
- Increases customer retention.
- Encourages purchase frequency.
- Attracts new customers.
- Boosts customer satisfaction.
- Increases lifetime value.
The Travel Rewards Incentive
Given the competitiveness within many business sectors, an increasing number of loyalty programs are connecting to the near-universal desire to travel — and especially to travel in style at affordable rates. This has led to the emergence of customized travel reward incentives (white-label travel clubs) as a powerful incentive model or as an enhancement to existing programs.
If you would like to see how to develop a travel-based rewards and loyalty program then book a live demo with us, and we will further explain the process and guide you through the selection of benefits that you could offer. Adding travel rewards is now one of the smartest tactics that your brand can use to stay ahead of your competition.