Loyalty programs are a business driver!
Loyalty programs have taken the world by storm. Companies are launching customer incentive programs en masse. And this makes economic sense. According to Rosetta Consulting research, loyal members make purchases 90% more often and spend 2-3 times more than non-members. There's a reason Amazon invests billions of dollars in loyalty programs. In a world where the customer rules the roost, a high level of customer focus - required element sales strategies. Regular customers - main source company income. In the early 2000s, researchers obtained a phenomenal result - an increase in customer loyalty by 5% leads to an increase in company profits by 25-95%!
Launching a loyalty program is an investment in the long-term development of the company. Its impact on brand satisfaction is even greater than price and perceived value. Thanks to recommendations from loyal customers, companies attract new customers and reduce marketing costs for acquisition.
Damn loyalty programs!
A study by Boston Consulting Group notes that loyalty programs often don't pay for themselves. The company calculated that in order to compensate for the costs of incentives and operational management of the program in the amount of 3% of revenues, sales would need to increase by 10%.
Worldwide traditional ways stimulating customers with discounts and bonuses are becoming less and less effective. There are a number of explanations for this.
The number of loyalty programs is growing exponentially every year. The buyers' wallet no longer holds all the cards; some of them have moved to mobile applications, but this does not change the essence. In the United States, on average, there are 29 loyalty programs per customer, of which he actively uses no more than 12. In Russia, the indicators are not much better. According to RBC Research, 58% of loyalty cards remain virtually unclaimed.
Decreased activity of participants. As a consequence of the increase in the number of programs, the average engagement of participants is constantly falling. Clients are fed up with the same type of classic discount or bonus programs. To attract the attention of buyers, you need to increase the attractiveness of the reward. But this cannot be done without reducing the profitability of the program.
McKinsey conducted a study among 55 of the world's largest retailers on the effectiveness of loyalty programs. The results of the study are sobering - revenue growth in companies that invested in loyalty programs was similar or even slightly worse compared to companies that did not make such investments.
Are loyalty programs an effective investment or a waste of company resources?
Both positions are sides of the same coin. The loyalty program is one of the tools for building relationships with customers. Those companies that use it skillfully achieve impressive results. “On average for a hospital,” loyalty programs do not always live up to expectations. The problems lie not in the tool, but in how it is used. The decline in customer interest is associated not only and not so much with external factors. The main reasons lie in the low quality of implementation and subsequent management.
Key mistakes when implementing a loyalty program
Waste economy
Most of the problems associated with the incentive model arise at the design stage. Sometimes companies think that developing a loyalty program is easy and simple. I added it there and wrote it off there. Business then! The main thing is to buy the right one software. Alas, this is far from the case. Behind the apparent simplicity lies a carefully thought-out mechanism. A well-designed program is mathematical models, consumer psychology and trade marketing rolled into one.
Giving out discounts without understanding how a company will recoup such investments is an attraction of generosity that is bad for its financial performance. The launch of the program does not automatically lead to an increase in sales from the first months, but it certainly reduces the profitability of the business in the short term due to the budget for rewards and operation of the program.
The most active participants are loyal customers who already regularly consume the company's products and are unlikely to spend more. Their share of wallet (the share of purchases from the total demand in the category) is close to 100%. Customers who rarely make purchases receive few bonuses, which means that the loyalty program has a rather weak effect on them. What happens? Margins for regular customers increase slightly or even fall due to spending on bonuses, and those customers who could potentially increase consumption do not receive the necessary incentives.
A well-designed program is a combination of mathematical models, consumer psychology and trade marketing.
You can improve the economics of the program and at the same time increase its attractiveness for various categories of consumers using a system of levels and targeted campaigns to “grow” regular customers.
Cut seven times, measured once
The design stage lays the foundation, but the main work begins after the program is launched. Analysis, testing, optimization, evaluation - these are regular tasks that need to be performed day after day. Which customer segments are most sensitive to bonuses, what is the correlation between the size of the reward and the customer’s consumer activity. This information is the basis for optimizing the incentive model.
A team of specialists is needed to manage the program. Many companies cannot afford to have a separate staff for this, or do not see the need for it. This leads to the fact that the results of the program are not measured, and there is no comprehensive approach to assessing indicators. And as the saying goes: “You can’t manage what you can’t measure.” Decisions are made on a whim through trial and error. As a result, the loyalty program, instead of retaining customers, on the contrary, becomes a cause of consumer outflow.
One size fits all
Behind the abstract participants there are people - unique and contradictory. They have different needs, decision-making patterns and consumption habits. The main driving force of the loyalty program is customer centricity, which is formed based on a deep understanding of the behavior of various consumer segments.
Imagine if you offer your clients not bonuses, but shoes as a gift. Moreover, only elegant shoes of size 38 or sports sneakers of size 45 are available. Now estimate what proportion of clients the gift will be in size.
Same with loyalty programs. By offering a single incentive model for participants, the company a priori loses a significant part of the target audience. It is either extremely difficult for clients to accumulate bonuses, or the rewards are not attractive. Capgemini Consulting found that 44% of discussions in in social networks revolve around irrelevant incentive models and unattractive rewards.
How to Create the Next Generation Loyalty Program
Stop spending, start investing
As mentioned above, a common problem with loyalty programs is the lack of a clear strategy for working with different customer segments. The program becomes profitable when the company understands who, how and for what they receive bonuses. Imagine that for each client a profitability rate is set, on the basis of which an individual package of offers is formed. Segmental goals should be reflected in the program management operating model.
The right customer incentive model begins with assessing the customer's potential for the company.
The right customer incentive model begins with assessing how promising the customer is for the company. CLV is a guiding star that indicates what level of rewards is acceptable for a particular participant. CLV is not just an indicator, but an ideology of working with clients, which is based on a total analysis of all interactions between the consumer and the company. To understand the value of a customer, it is not enough to measure financial indicators; consumption patterns, preferences and life interests are important. According to research by Nielsen and McKinsey, the use of a value approach leads to increased consumption among the most profitable and loyal consumers and a reduction in inappropriate spending on stimulating unprofitable and disloyal customers.
Personalize your participation in the program
Geolocation and transactional data, responses to promotions, activity on social networks, analysis of requests to the support service - these are grains of information that together create the digital genome of the buyer. Data is the new fuel for loyalty programs. The current level of technology development makes it possible to implement individual trajectories of client participation in the program based on the analysis of many factors - from purchase history to analytics from CCTV cameras.
Data from various sources information form the digital genome of the consumer.
Bond found that 2/3 of programs do not analyze the relevance of rewards for participants. Nothing kills interest in a program more than uninteresting prizes. Personalizing the reward system influences participant activity and satisfaction without increasing incentive costs. For example, some clients do not use bonuses, they consumer behavior does not change after joining the program. This may be due to the unattractiveness of the rewards, or the method of motivation does not meet the needs. In this case, other mechanics are tested - special conditions of service or instruments of non-material motivation - participation in a socially significant initiative or charity event.
Combine different types of customer motivation
Unfortunately, the vast majority of loyalty programs affect rational customer loyalty, built only on stimulating purchases and completely ignoring the emotional component. The result is dull and repetitive programs that do not arouse any enthusiasm among consumers. They encourage brand tolerance instead of truly building long-term loyalty. Emotional involvement of participants is not a one-time creative, but a strategy thought out with engineering precision to retain customer attention and stimulate the required consumption model. Gamification, sweepstakes, initiatives not directly related to purchases, educational projects, surprises and instant prizes, competitions, etc. The ingredients are known, all that remains is to cook and serve correctly.
Emotional involvement of participants is not a one-time creative, but a strategy thought out with engineering precision to retain customer attention and stimulate the required consumption model.
The sole purpose of most programs is to stimulate transactions, and other aspects of the consumer's interaction with the company are overlooked. Encouraging any activity around the company, including reviews, participation in promotions, publishing posts, creates an additional emotional connection between the brand and the buyer. It is important to understand that this kind of activity cannot be stimulated by material bonuses; this corrupts customers and attracts prize hunters.
Foster an omnichannel model of interaction with the company
Foster an omnichannel model of interaction with the company. Point of sale, website, mobile application, social networks, chatbots are far from full list ways to communicate with customers. The combination of different interaction channels increases audience reach, since the customer experience is not limited by the buyer’s geographic location or time of day. The omnichannel consumption model is advancing by leaps and bounds around the world following the spread of mobile devices.
A loyalty program is an excellent tool for creating new habits and consumption patterns. Let's give an example. Traditionally, offline retail has one channel of interaction with the buyer - the point of sale. If a person installs an application in which you can make a shopping list in a store, then their customer experience will expand beyond point of sale. Why not stimulate this consumption model with the help of a loyalty program - make a list, buy, receive increased bonuses.
Obviously, the loyalty program should be available through the channel that is available to the client in this moment. Some people prefer a nice card in their wallet, while others find it more convenient to use a mobile app or just give their phone number. Having a presence across multiple channels allows you to collect customer information and use it to optimize future interaction scenarios.
Actively manage your customer experience
Surprisingly, but true - traditional loyalty programs do not work with customer complaints and problems. Moreover, loyalty programs are on the balance sheet of marketers, and complaints and suggestions are received by the service and/or sales departments. According to statistics, 71% of clients part with a company due to poor service. The question is, why does a client need bonuses if the level of service is categorically not satisfactory? Every company has problems. But leaders know how to accept requests from clients in a timely manner and smooth out complaints. A description of approaches to dealing with negative customer experiences can be found in.
The new generation loyalty program is aimed at creating a positive customer experience and smoothing difficult situations(complaints, malfunctions, Bad mood client). Another direction in the evolution of loyalty programs is increasing the value of a product or service. The program should create tangible benefits and solve the buyer's problem. A great example is Amazon's program. Program members do not pay for delivery each time they place an order.
Conclusion
The loyalty program is a company asset and an additional competitive advantage. At the same time, it is no longer enough to distribute bonuses to clients. Classic discount and bonus mechanics are being replaced by complex new generation programs that solve a wider range of problems than just incentives for repeat purchases.
Managing Director NGM Mikhail Fokin
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Material updated 05/04/2018
Successful marketing is based on successful and competent retention of old ones. To ensure that customers do not forget about the brand after the first purchase, increase their loyalty. The longer they use the company’s services, the more money they will bring you (LTV). In this article, we will share the main techniques for maintaining customer interest, which directly affects the income of your company.
Before we get into ways to increase customer loyalty, let's talk about LTV and why it's so important.
What is LTV
The LTV (Lifetime Value) metric shows how much income a client brings to the company over the entire period of interaction with it. The longer he is interested in your brand, the more profit he will bring. Therefore, LTV is closely related to the concept of CLT () - the average time of interaction between a client and a company.
Basic formula for calculating LTV:
LTV = m*a*t
m—average bill during the reporting period;
a is the number of repeated operations during the reporting period;
t is the average lifetime in the metric of the reporting period.
The higher the LTV, the better for the company. Satisfied customers return again and again. Low LTV indicates that customers do not stick around and the company has a high user churn.
Reasons for Low LTV and High Customer Churn
To solve a problem, you need to understand its sources. Users may refuse the company's services for several reasons:
- Low quality of goods and services
Start with what ends up in customers' hands. Nobody wants the purchased product to break a day after purchase, and the service to start giving errors. This greatly damages the company's reputation and scares away customers. - Low level of customer service
Customers must be satisfied with the service. If a company is unable to solve a user's problem, he will lose trust in it. - Lack of competitiveness
Companies must constantly improve to stand out from other brands. - Natural causes
These include those factors that the company does not influence: the client’s move, a change in his hobbies or social status, etc.
How to increase customer loyalty?
Brands increase loyalty in different ways. It is important to find the methods that will work specifically for your business. Below are 8 working tactics that different companies use:
Use followers' social media posts to create additional content
Content created by active clients is the best way to diversify your content plan and attract the attention of those who are still in doubt. Moreover, users react positively when a brand uses their content on its pages on social networks. Most importantly, do not forget to tag the authors of posts.
For example, Soda Stream specialists regularly talk about their subscribers on the brand’s Facebook page and blog and share their feedback.
Give gifts just like that
Do small things, but pleasant surprises users. Subscribers will be pleased that the company values their participation in the development of the brand.
The Yandex.Music service team under New Year chose the most active users and sent them a set of themed stickers and a hand-signed postcard:
Stickers will attract the attention of others and become an advertisement for the brand, and a hand-signed postcard will add warmth to communication with the client.
Listen to customers and improve service
For example, at the beginning of 2018, we sent out a survey in which we asked subscribers about topics that were interesting to them. Based on the answers, we have prepared a content plan for our blog:
Always leave the opportunity for customers to suggest their own idea that is not on the list, and encourage them to participate in the survey: a small prize - an additional discount, free shipping or test access - will increase the number of people willing to answer the questions.
Below are several resources that make it easy to create surveys and structure the information received:
- To create surveys and votes, use Polldaddy, Survey Monkey or Google Forms. They offer simple settings and features.
- ChartsNinja or Infogram can help you publish your results. Upload a table with the results and get an impressive chart or infographic.
Always stay connected
Clients are more likely to talk about your failures than your victories. A dissatisfied post about Kiehl’s became the beginning of an entire investigation:
Kiehl's found a way to get out of the situation and reduce customer dissatisfaction. She apologized, sent a courier and sent the client’s product for examination:
Be different from your competitors
It's not about discounts, it's about features, services, resources and other things that provide value to your customers.
If your product or service is no better than your competitors, customer service can be an advantage. For example, the owner of the comic book store Shield Comics puts aside books that interest them for his regular users, and even specially purchases publications if suitable ones are not available. In addition, he personally informs them on Facebook when something worthwhile comes into stock. This approach attracts a lot of buyers:
Be the most comfortable
Warby Parker makes new glasses faster than its competitors. Customers don't have to spend hours on the phone, fill out endless forms, and wait days or weeks for a response. Just contact the company on Twitter, and specialists will respond to you instantly.
Thanks to this approach, customers turn to Warby Parker again and recommend them to their friends:
“Glasses are like a pendant around your neck, but only for your eyes. This is what I repeat to myself the next time I buy a pair of Warby Parker glasses that I don’t really need.”
Think about how you can make common activities more convenient for users. Little things like automatic ordering, form filling, and reminders will make their lives easier. They should spend a minimum of time purchasing a product or service and a maximum of time enjoying it.
Solve your customers' problems
Give your customer a free extra benefit that will solve their problem and make their life more convenient. Then you will become for him not just a supplier of goods, but you will be practically irreplaceable.
Artemy Lebedev's studio created the Typograph service. It simplifies text layout. The EMAILMATRIX team has developed tools that speed up the work of email specialists.
Make quality your priority
Prove the quality of your product with action. For example, Standard & Strange showed in their newsletter what their shoes look like after 1.5 years of use:
Like any asset, customer loyalty is not given for nothing. But it's worth the effort.
The higher the loyalty, the higher the company's income and the lower the churn of customers. Satisfied customers will definitely tell their family and friends about you, and this is the best advertising.
Decide for yourself which of the proposed strategies to use, but try to make your brand irreplaceable and unforgettable.
In this article we talked about the features of LTV and how to increase it. Next time we’ll talk about how to correctly calculate LTV at each stage of the sales funnel. Follow the announcements of articles and stay in touch with us.
Today's consumers belong to an average of 13.4 loyalty programs. However, only 24% of them admitted that they were completely satisfied with the bonus products they use.
Dmitry Kholomtsev, executive director of KUPIVIP e-commerce services, explains why it is important for businesses to create a convenient and understandable loyalty program and how to successfully implement it.
A convenient loyalty program can increase the share of repeat purchases
Customer retention is one of the most important tasks modern business, be it retail, connecting services or any other business. Today, technology makes it possible to attract new customers so effectively that actually letting them try your service or product is not such a difficult task.
But how to interest a client to return, how to retain those who are not making purchases from you for the first time - questions of the next order of complexity.
According to statistics, repeat orders from loyal customers account for more than 60% of the total business turnover of any large retailer.
A convenient and user-friendly loyalty program is one of the key ways to increase the share of repeat purchases and reduce churn, naturally, along with good service and high quality products.
Natalia Zhuchkova
Director of Media and CRM "M.Video"
Of course, the loyalty program should be convenient for customers and mobile - no one is ready to carry packs of cards with them, especially if purchases are not made every day, for example, as in the segment household appliances. Several years ago, we switched to “digital” customer identification.
It is enough to indicate your phone number at the checkout to receive bonus points when purchasing, and it is convenient to track your balance and pay bonuses for new products in personal account Online. We offered clients access to all information on the bonus card and from their smartphone - using a mobile application.
Three classic types of loyalty programs
- Cumulative
A program based on the accumulation of points that can be used to pay for subsequent purchases. This is one of the most common types of incentive programs, and the key to success is its ease of understanding and use.
The accumulative loyalty program is widely used in the service sector, especially in the tourism sector: as a member of a hotel loyalty program or booking service, you will earn points for every trip, every ruble spent.
The second common area of application is retail of any format: today, so-called cash-back reward systems are used by every second store.
Example. Large North American retailer Nordstrom has launched a loyalty program with its debit cards, which double the accumulation of bonuses when paying in the brand's stores.
According to Nordstrom representatives, more than 40% of their customers already use the bonus debit card. The retailer's goal is to increase this number of loyal customers.
KUPIVIP launched a similar loyalty program in September last year: for each purchased order, the client receives 3% cashback, which can be used to pay up to 100% of the cost of subsequent purchases within 90 days. More than 20% of clients already use bonus rubles regularly, and this share is growing every month.
- Multi-tiered
The more the buyer uses the product, the more points and benefits - this is how you can describe the principle of this program in one sentence. Often such programs are used in the service sector.
The versatility of multi-tier loyalty programs is that they can combine different mechanics: increasing the number of purchases, stimulating communication with a brand online, promoting a certain category of goods or services, gamification.
Example. A good example multi-tier loyalty program launched in Russia is the updated “Vkusomania” from “Azbuka Vkusa”. In addition to the classic accumulation of points for each purchase, the club program offers personalized discounts based on the user’s previous purchases, the opportunity to purchase tickets to master classes, holidays and tastings, as well as the opportunity to donate your bonuses.
A multi-tiered loyalty program is difficult to implement from the point of view of calculating efficiency. It requires a close study of your client audience, segmenting it and identifying preferences.
But such a bonus system allows you to reach the widest audience.
A mix of the first two types is possible - this approach is used by M.Video. Customers receive points for every purchase, and they can spend them both on equipment and services, for example, on “gold” in World of Tanks and other game content.
Thus, program participants save on average about 20% on purchases. According to the retailer, the program already has about 20 million people, for Last year the number of regular customers increased by 15%, which indicates the popularity of the proposed mechanics.
- Coalition
The most common type of loyalty program for: Today, almost every bank can offer a number of co-branded cards. In addition, an affiliate program can unite several partners from different areas.
A coalition retail loyalty program is of particular interest if your brand is looking to cross-channel (promote online and offline channels). After all, a partner in an online loyalty program can be, for example, a brand’s own offline store.
Example. Children's clothing retailer Carter's launched a cross-brand loyalty program in the fourth quarter of 2015. Rewarding Moments customers earn one point for every dollar spent at any US Carter's, Oshkosh B'gosh or online store.
For every 75 points, the buyer receives a $10 credit, which he can then spend in any of the brand’s stores. According to company representatives, the loyalty program increased online sales by 20%.
A Russian example of an omnichannel loyalty program is the offer of the Karen Millen brand. The bonus system was launched in the chain’s offline stores a long time ago, and in 2015 the brand decided to implement an integrated approach.
The accumulation of discounts now occurs for online and offline purchases, while discounts within the loyalty program are also taken into account cross-channel.
It should be noted that the bonus program for online purchases is registered automatically: every user registered on the site automatically becomes a member of the loyalty program, which greatly simplifies understanding and working with the program for users.
How to Implement a Successful Loyalty Program
- Formulate a proposal
It's simple: answer the question, what benefits will a customer participating in your loyalty program receive? At the same time, try to analyze whether you want to work with all your consumers or highlight the most profitable segments by offering them an exclusive bonus system.
The second approach, despite its seemingly limiting component, works for many brands, especially in retail, because often 20% of customers provide 70% of the income.
- Determine infrastructure requirements
This component defines the input to the implementation of the program: what tools do you need, what resources will you need? At this stage, it may be worth engaging experienced contractors who will help calculate the economics of your project, because often the brand does not have enough of its own resources to implement a full cross-channel solution.
In different cases, infrastructure may include:
- Main sales channels: website, mobile application, retail stores
- Service departments and issues: call center, delivery, information using POS materials
- Back-end: loyalty database, implementation of the program mechanism, analytics and efficiency
- Additional elements to consider: social media management tools, interaction with online marketing
- Define the best way using your loyalty program
Try to make the most of any customer analytics available to you.
The market is developing rapidly, today's consumers are accustomed to to the highest level service and a completely personalized approach. The more “tricks” you can offer that are interesting specifically for your audience, the better.
At the same time, keep it simple. Gamification, quests, questions and answers and constant communication with clients on social networks will suit you if your audience is at least in the age category that understands the meaning of these words.
Experience of the Eldorado company
Natalia Balashova, head of the Eldorado loyalty program group
Our loyalty program has a simple and understandable system for customers to accumulate and write off bonuses from each purchase, increased bonuses for the products of our clubs and the opportunity to receive closed offers for promotional products. More than 85% of buyers use a bonus card when making purchases: enough mobile phone to spend or accumulate your bonuses.
The main goal of loyalty programs for electronics retailers is to stimulate the frequency of customer purchases, because on average, customers return to our stores twice a year. In our experience, any promotions with bonus mechanics do an excellent job of this task.
Unlike household appliances and electronics stores, fashion industry stores prefer discount schemes of loyalty programs. The higher margins of this business allow it to offer customers a direct discount or a discount based on customer status.
Fashion retail, especially in the premium part of the segment, has absolutely amazing image programs to stimulate customer loyalty. A brand, by learning what is truly important to their customers, offers them value in a way that is not expressed in financial terms.
An example of such a story is the Worn Ware on Patagonia program, when the client is offered not bonuses or discounts, but repairs to their favorite clothes so that they stay with them forever.
About trends in the online retail discount system
Konstantin Gorshenev, project manager, AKIT Onedaysale
Consumers today increasingly look at prices and want to buy goods here and now. By bringing together a huge number of promotional offers, we were able to identify certain trends that have a significant impact on online retail and consumer behavior.
The main one is the system of discounts in online retail in general.
It continues to gain popularity and will certainly develop further.
More and more cashback services, joint purchase services, aggregated loyalty cards of several online stores and others are appearing online.
These savings trends are gaining popularity online, because by receiving additional bonuses and discounts in addition to the convenience of home delivery, the consumer remains in double benefit.
Online stores today more often choose marketing tools – digital and interactive promotions – rather than advertising.
Large companies, when introducing a product to the market, create special websites, increasing interest in it. Conventional contextual advertising is gradually being replaced by new interesting formats that are becoming extremely convenient and familiar to consumers.
Looking at fans of Apple or Pepsi products, many businessmen dream of such love from their clients. One of the important steps towards building such relationships is the creation of a well-thought-out loyalty program that will help earn the trust of representatives of the target audience.
Jeff Smith, CrowdTwist's director of marketing, recommends:
“To achieve consumer loyalty, brands need to deliver personalized messages on the channels that engage them. Create an emotional connection between the customer and the product.”
Here are five strategies to help you create an addictive loyalty program.
1. Create multi-level systems
This encourages consumers to change their habits by challenging them to compete for the ultimate prize - the opportunity to become part of a select group.
American market research showed that 50% of respondents increased their spending or started buying another product to achieve higher status in a particular bonus program.
Creating levels forces people to compete with each other. Alex McEachern, loyalty specialist, explains:
“Customers are eager to upgrade to the next level in your program because they want the added benefits and status that comes with them. It's human nature that we always want to know where we stand in society."
Here is an example from the experience of Best Buy. Clients can be at one of three levels. An easy-to-understand table shows what benefits you can get from each and how to get there.
Lindsay Colovich, content marketer at Hubspot, offers this advice to business owners:
“Offer people small bonuses for joining the loyalty program. And then encourage loyal customers to fulfill the conditions that allow them to move to the next level for greater rewards.”
Tempt your clients with more and more bonuses. This can be a powerful argument in the future when they choose who to contact.
2. Include social interaction
Humans are social creatures who enjoy communicating with each other. Capitalize on human instincts using social media.
For example, representatives of Starbucks on social networks ask customers to express their opinions on how the level of service in coffee shops can be improved. The MyStarbucksIdea program lets you vote on other people's ideas so creators can see how popular their idea is.
Avoid situations where clients receive their bonuses and remain silent about it. Make it easy to share your joy with others!
3. Reward for more than just purchases
Research shows that American companies spend about $2 billion a year on increasing customer loyalty, and the average family participates in 14 programs but is active in only six of them.
Creating and maintaining loyalty programs takes money and time. Plus, you'll have to compete for customer attention with several other brands. Differentiate yourself and you will have no competitors. Most companies limit themselves to awarding points when paying for goods.
A new trend is to offer bonuses not only for purchases, but also for other useful actions.
“Bulu Box” monthly rewards customers who write reviews and testimonials about products with bonus points. Thanks to the participation of these people, the company understands what can be improved and can communicate its products to more potential buyers.
The Walgreens’ Balance Rewards program is centered around the brand’s mission (“improving quality of life”). The company rewards those who choose healthy habits with points: running in the morning, monitoring their blood pressure or quitting smoking.
“The philosophy of the loyalty program is simple: reward customers for repeat business and sales will increase. This is a transparent and powerful strategy."
states Jed Williams and John Swonziger.
Customers need an incentive to purchase your product.. Give it to them, but don't stop at shopping bonuses.
4. Create unique bonuses
Now more than ever, consumers want recognition and prefer rewards based on tastes and preferences. In exchange for their loyalty, they seek access to exclusive products and experiences. Some of the best bonuses are designed by small business owners.
The FoBoGro store in Washington, for example, allows regular customers within 30 seconds, collect as many products as they can manage.
And Panera Bread surprises its loyal customers. They never know what bonus they will receive until the moment it is awarded. The restaurant chain’s website states: “Please show your card every time you visit our establishments. As soon as we understand what you like, we will definitely surprise you with a surprise.”
Coming up with a unique reward is not as difficult as it seems. Julie Cottinier, founder and CEO of BrandTwist, recommends three key principles:
- Encourage customers to share with others the history of their interaction with your brand.
- Offer them an opportunity deeper, wider or earlier access to its products.
- Consider a unique experience that will capture their attention.
A personal touch will make customers loyal to your brand.
5. Be mobile
A few years ago, customers carried their rewards cards in their wallets and purses. This worked, but implied a number of limitations (for example, it was easy to forget the card at home or lose it). Nowadays most people have smartphones. Keep up with the times!
Integrate your loyalty program with mobile devices.
Segment consumers by interests, location, and habits. This way you can establish communication with them and get additional profit.
Remind us about your bonus program. Offer additional discounts.
Don't ignore modern technologies. They will allow you to be on the same page with the buyer.
Loyalty for life
- Customer loyalty cannot be bought, it need to earn it.
- Build multi-level systems For consumer involvement.
- Offer bonus points not only for shopping.
- Create unique ways to rewards that will surprise your clients.
- Make your customers addictive!