3 Titans Take on Loyalty Programs
When it comes to the importance of loyalty programs, customer retention is the name of the game, according to Lindsey, JE, and Tim (Rockford). Especially when a customer is scrutinizing their spending habits. Merchants are looking for ways to efficiently spend their money, but in times of economic uncertainty this is even more important. Inflation is rising and people are thinking twice about where and when they are spending their hard earned dollars. They are going to be looking for the most value out of their cash.
More importantly this is where the immense amount of benefits of having a loyalty program comes into play. Not only will it allow you to save money (It costs 5x more to get a new customer than retaining one) and...
“It is generally said that 80% of your revenue (or more) come from your top 20% of customers.” -J.E.
Your company will save money but it will also help your customer save money. We asked some expert Titans (Lindsey Coleman, J.E. Urseth and Tim Rockford) on their thoughts on loyalty programs based off of experiences they have had with our clients.
“Loyalty programs can be a way to provide value by re-engaging your existing customers, but also can build trust by signaling the company’s investment in the customer experience.” - Lindsey
“Loyalty programs build brand credibility. In the customer’s eyes, a brand becomes more trustworthy if they have a loyalty program. 'Not just any brand can have a loyalty program; only the established ones that have space for that investment.” - Tim
“A well-done loyalty system can help to reward that top 20% and keep them engaged even in non-peak buying cycles. A loyalty system is also a great way to differentiate against the big box retailers or even Amazon.
Those who have a fairly aggressive strategy here will retain and delight those customers who are being constantly attracted to ‘cheaper and faster’ from other retailers. A loyalty program is not an expense, it is a revenue driver.” - JE
Not only is a loyalty program important but it offers many benefits to your customers and your business as well. Loyalty programs offer up many unique marketing opportunities for your business but then in return give the customer
“Loyalty specific discounts, point redemption offers, refer-a-friend discounts, etc…” -Tim
Your customer shouldnt be rewarded only for a transactional purchase. Your loyalty program should be reaching your customers when they are in and out of the buying circle. This allows for more engagement with your brand and puts more confidence in those cost sensitive customers that you care about. Overall all these things allow you to continue promoting your brand and increasing Customer Lifetime Value (how much their customers spend with them over time).
Another huge advantage that loyalty programs provide to your business is being able to...
“collect all that rich and relevant customer data and track consumer trends over time” -Tim.
Especially during times of economic stress, understanding how your customer behaves can help you strategically think about changes you want to make to their personalized experiences. It will also help you make decisions about what you may do differently in the future when economic uncertainty has gone away. You're not only getting information about customer personas, strategies, and spending habits but you can then implement this information into new promotions, products or maybe even a new distribution channel.
Lindsey has a lot of experience in revamping or starting loyalty programs with our clients. She went above and beyond to provide suggestions that can help you in the process of starting your own loyalty program.
Lindsey's 5 suggestions for rock-solid loyalty
If you’re considering implementing a loyalty program (a great way to leverage existing data before the holidays!) here are some things to consider when developing your program:
- Use Loyalty Programs as a way to stand out from the competition - what do you offer that they don’t - to engage potential customers.
- Use the metrics that you collect from your customer’s purchases to deliver a more personalized marketing experience above and beyond the traditional sales funnel.
- Create excitement from unique experiences that only your brand can offer to make your loyalty points feel like currency and not just coupons.
- Make it personal - offer different ways to use points - a community-oriented donation or using points to redeem for upgraded shipping goes beyond the spend-to-points model.
- Listen to your customers - how do they want to interact with your program?
While we're knowledgeable enough to be dangerous (and trust us, these three Titans are dangerous), our loyalty partners are the true masters of this. Check them out here.
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