Do you know more than 90% of the companies now have a Loyalty Program running on their platform? But why is everyone integrating a Customer Loyalty Program in their store? What are the benefits of creating a Customer loyalty program? We will solve all your Customer Loyalty Program doubts in this blog. 

Let’s have a look at the topics covered in this blog-

• What Is A Customer Loyalty Program? Explanation With Examples
• Benefits Of A Customer Loyalty Program
• 8 Steps To Build A Customer Loyalty Program
• Strategy To Build A Successful Customer Loyalty Program
• 10 Different Customer Loyalty Programs

What Is A Customer Loyalty Program?

A customer loyalty program is an initiative run by your company to thank clients for their ongoing business. 

Free merchandise, early and exclusive access to new products or events, point systems, awards, free products, and exclusive merchandise are all examples of rewards that you can provide customers as a way to say thank you for their business. 

If a loyalty program is available, 68% of devoted consumers will sign up, and the benefits and special offers will encourage them to keep making purchases. Due to the advantages these programs offer to their businesses, customers often make larger purchases. Given that they already take pleasure in purchasing from your business, why not offer them even more incentives?

The simple answer to that question is that providing incentives without receiving something in exchange directly is too expensive. When you examine a single purchase, this seems to be the case. But loyalty programs have advantages for your company that go beyond a single or two purchases.

If you’re wondering if client loyalty programs are worth it, consider the following important advantages that they might offer your company. But first, allow me to briefly discuss some platforms that make thanking your clientele simple.

DSW

Designer Shoe Warehouse, also known as DSW, has long maintained a conventional loyalty program in which participants earn points for every transaction they make. As they spend more, they can unlock higher tiers of prizes. Their software functions flawlessly. Customers don’t need to memorize a punch card because their internet system can identify them by their name, phone number, or payment details.

When incentives become automated, there’s a risk that users will lose track of the initiative. Customers aren’t encouraged to spend more in order to earn more if they are unaware of the loyalty program. In order to maintain customer engagement with the program, DSW needs to remind customers of their status and the potential rewards for spending more money at DSW locations.

DSW started an email campaign to remind clients about their program at the beginning of 2017. A customized email explaining how many points were required to receive their next $10 off coupon was the campaign’s main component.

Offers that they are presently qualified for

a brief account of their contacts with the business, comprising the duration of their loyalty membership, the number of points they have accrued, and the total amount of money they have saved over the previous two years.

The degree of personalization was what caused the campaign to be so effective. A loyalty program such as DSW’s provides the firm with a wealth of client information. In order to create emails that are hyper-personalized and relevant, DSW took advantage of this (along with some reliable email automation), setting them apart from other generic marketing emails that are languishing in clients’ inboxes.

Starbucks Rewards

While it’s become standard practice for merchants to handle loyalty programs using a mobile app, Starbucks introduced a novel concept when it originally introduced My Starbucks Rewards via the Starbucks app. Customers find the program incredibly simple when they use their app—there is no need to sign in or remember punch cards.

Customers have to use the Starbucks app to order or make payments in order to accrue loyalty points, or stars, as they call them. By centralizing consumer interactions in this manner, a wealth of information about customer preferences and behavior is produced.

Orders of choice for drinks, client lifetime value, commonly visited venues, seasonal preferences… Starbucks can obtain data on all of these behaviors and more by directing users to the app, enabling them to provide more customized benefits and communications to their patrons.

A loyalty app can be a fantastic method to gather and organize consumer data if it is feasible for your business. Otherwise, you may obtain the majority of the same data with the aid of a strong point-of-sale system.

The Northface

The North Face, a retailer of apparel and outdoor gear, offers loyalty members a choice in how they can redeem their points, with alternatives catered to their own lifestyles. This encourages loyal members to earn more and more incentives.

With the VIPeak program, users can accrue points through regular purchases as well as through special methods including downloading the North Face app, checking in at specific locations, and attending events hosted by The North Face. Customers can use their points to book unusual travel experiences, such as a mountain climbing expedition in Nepal when it comes time to redeem awards.

The North Face’s rewards program speaks to its target clients directly rather than just urging them to spend more money. These are carefully chosen experiences that contribute to strengthening the bond between the brand and its customers, not just generic product discounts.

Even though, as a small shop, you might not have the funds to support an Alaskan hiking trip, you can still develop a customer-focused loyalty and reward program that will fortify your relationship with them.

Benefits Of A Customer Loyalty Program

Developing a client loyalty program and offering supplementary, special perks to customers can be advantageous for all organizations. It’s possible that you are already a part of such programs, such as a referral bonus or frequent flyer points program. 

Loyalty programs can help you stand out from the competition and retain clients in a crowded and competitive market. Although recurring business from devoted clients is more likely, there are other justifications for launching a program. We’ll go through the advantages of a client loyalty program for your company below. 

Better Customer Retention

These days, consumers consider a variety of factors while choosing what to buy. They base their purchasing decisions on brand involvement, shared values, and emotional ties. Customer loyalty programs are an excellent method to interact with customers after the sale, to connect with them on common ground, and to give them even more value, which will increase their satisfaction and likelihood of returning to your store. Working with clients on recurrent exchanges is another option. With home service firms, for instance, you may work with homeowners to develop a maintenance schedule that calls for weekly or monthly visits. This maintains the client’s interest and enrollment over time. 

Plus, 88% of consumers who experience brand loyalty intend to stick with them, and 83% intend to increase their spending. 

More Customer Referrals

Customers will inform their friends and family about your customer loyalty program if they find it beneficial. This kind of word-of-mouth advertising can increase your company’s revenue by bringing in new clients at no expense to you. In actuality, word-of-mouth advertising generates $6 trillion in annual consumer expenditure, and consumers are 90% more likely to believe in and purchase from a company that a friend has recommended.

Cost-Efficiency

Retaining satisfied clients is more economical for your company than bringing in new ones. It costs 5–25 times more to acquire a new customer than to keep an existing one.

User Generated Content And Reviews

Referrals from friends and family are nearly as reliable as online customer reviews. Programs for customer loyalty that provide incentives for reviews and ratings on websites and social media will provide real user-generated content—that is, testimonials from satisfied customers—so you won’t have to.

8 Steps To Build A Customer Loyalty Program

Adopt A Multi-Channel Customer Service System

Understanding your consumers’ demands is the first step toward developing a loyal customer base. When it comes to connecting with customers, especially when they need assistance, a multi-channel support system is one of the finest options. Consumers will have more access to your support staff, which will lead to more contact with them. The more times you engage with customers, the more frequently you may affect their experience. 

Offering an omnichannel experience—where clients have a uniform experience across platforms, devices, and channels—is another benefit of having several channels. This raises customer satisfaction because it makes your customer service more approachable, which is exactly what you want when disgruntled clients come to you for assistance.

To assist your customer care personnel in covering several channels, think about implementing a help desk and live chat tools. Artificial intelligence (AI) tools, such as chatbots, can reduce the effort of handling incoming request distribution and organization for smaller teams without the need to engage additional staff.

Provide Exceptional Customer Service

Giving out free merchandise, special offers, and other benefits is not the same as going above and beyond what customers expect in order to deliver great service. Quite the contrary is true. Consumers do not want free samples; they want answers to their problems. Freebies and discounts are merely a band-aid solution.

As an alternative, set a challenge for your staff to hear what the client has to say and consider their input. Although these can help sweeten the sale, your customer will almost certainly be pleased with the solution than they would be with a replacement or bonus.

Focus on Your Customers, Not On Your Competitors

While researching competitors has its place and time, it isn’t as useful as you might believe because copying them in an attempt to gain their business won’t always yield the same outcomes. You must be even more inventive than your rivals if you want to outperform them in the eyes of your clients.

Large increases in client loyalty are the culmination of numerous tiny choices. That implies that you won’t rely just on a single innovation to achieve success. Every day, a devoted customer’s recommendation, every product purchase, and every customer interaction add to the daily growth of brand loyalty.

Hence, resist the need to check whether the grass looks greener on the opposite side because it most likely gets watered by a separate sprinkler.

Consistency Matters

Consistency is a key factor in the success of franchises like McDonald’s. Regardless of where they are in the world, customers are aware of what to anticipate from these establishments. Although it doesn’t appear to be a component in fostering consumer loyalty at first glance, it does, and here’s why.

Customers find it simple to integrate brands into their lives when they offer consistency in their offerings, both in terms of goods and services. Consider the scenario where you are craving ice cream and your only thought is of your go-to McDonald’s cone. They will always be honest and provide just what you asked for. You will eventually come to trust it because it has repeatedly shown that it can live up to its promises.

Create Meaningful Customer Interaction

Almost three-quarters of consumers say that feeling devoted to a brand depends on receiving good customer service. Furthermore, 76% of clients state that following a negative encounter, they would no longer do business with a company.

Any business can make errors, but the secret to keeping clients is owning up to them and fixing them as soon as they arise. 

Loyal customers anticipate a satisfying interaction with your brand each time they use it. They want to feel that you appreciate them just as much as they do, if not more. They may choose to do business with rivals if they feel their patronage is undervalued.

Here’s where a CRM can help since it keeps track of previous interactions a customer has had with your company. It keeps track of calls, emails, and personalized notes that provide particular client information. This results in a more customized experience since staff members can use significant historical data about previous encounters with a client.

Deliver Added Value

Not only are you competing with your rivals for the attention of your clientele, but so are they. Each is racing to prove to their clients that they are the most capable of meeting their needs. How then do you defeat them? Go above and beyond what they anticipate.

According to research, in practically every field, one in four clients is willing to pay 10% more if they are guaranteed a positive experience. In addition to providing a loyalty program, which we’ll discuss shortly, you can accomplish this by establishing a rapport with your clients that goes beyond the point of sale to show that you care about their way of life as much as their financial situation. 

Organizing activities or competitions that appeal to your target market is one method your business may enhance the client experience. Red Bull, an energy drink company, has amassed a sizable fan base, for instance, by supporting extreme sports teams and events.

To further enhance value, consider establishing a client community. This could be as straightforward as an ideas forum or information source, or it could be more intricate and involve a devoted network of supporters.

Consider the Harley Davidson brand. It established a network of brand evangelists who represent Harley Davidson at various dealerships across the United States. Customers who are a part of these communities are given the impression that they belong to an elite social club with a certain status. 

Share Your Positive Customer Experience

Why not spread the word to others if you’re creating satisfied client experiences? To educate others about the advantages your business offers, collect and disseminate customer reviews and feedback. Then, distribute these narratives across your various platforms. Customers are more likely to believe in other customers’ recommendations than in your advertising, therefore it’s critical to capitalize on favorable encounters to increase customer value.

In case you’re not sure where to look for reviews, independent review platforms such as Yelp provide you with a wealth of user reviews all in one location. To acquire qualitative data on your brand, you may also think about implementing NPS® and other feedback methods. Alternatively, you could ask clients to submit testimonials that you can post on your website. 

Reward Your Customers

The most valued customers for your company are those who are devoted to your brand. Customers that feel an emotional connection to your brand are actually more valuable over the course of their lifetime than the ordinary consumer. These clients spend more money with you and ought to be recognized for it; in this situation, a loyalty program is crucial to fostering client loyalty.

Strategy To Build A Successful Customer Loyalty Program

Choose Your Loyalty Program Name Wisely

Selecting a catchy name is the first step towards a fruitful client loyalty program. It should pique people’s attention and curiosity and compel them to take part. Above all, you need to set it out from the several other loyalty programs they may already be a part of. 

The name should elicit excitement in people to join, rather than just informing them that they would receive incentives or a discount.

The Rad(ish) Rewards customer loyalty program from Vega, a vegan supplement company, and the Beauty INSIDER program from Sephora are two of my favorite names for customer loyalty programs. Customers are piqued to learn more and sign up because these creative, original names make subtle allusions to benefits without giving them away.

Your Program Should Have A Deeper Meaning

Customer loyalty programs can be seen as a sly marketing tactic by certain consumers who are skeptical of them and want to spend more money with companies. That may be one of your objectives, but it shouldn’t be all about the money. 

Create a captivating customer loyalty program by focusing on the “why” behind your product or service to pique clients’ interest.

A range of customizable hair care products is called Briogeo. Customers can receive shampoo and conditioner customized for their hair at their doorstep by just answering a few questions on a survey.

Like its product, its rewards program is focused on the needs of the customer. Customers can earn three points toward a savings discount on their subsequent purchases for every $1 they spend. Customers understand that this loyalty program is bringing them closer to even more reasonably priced hair care items since it is straightforward and uncomplicated. There is a win-win.

Reward Various Customer Actions

Is there another method you can show that you value your customers’ loyalty in addition to sales? Reward customers who do not make a purchase.

Customers who interact with your company through sharing content on social media, watching product videos, using your mobile app, and subscribing to your blog are still significant indicators, so thank them for their support.

Provide Different Rewards

Offering discounts to your clients isn’t the only option to give them more.

Spending a particular amount or accumulating enough loyalty points allows users to exchange them for free event and entertainment tickets, free subscriptions to other goods and services, or even donations made in honor of the charity of their choice.

Lyft effectively accomplishes this with its LyftUp initiative. It’s simple and satisfying for users to make a difference while utilizing the service as usual because they can round up the cost of their ride to the nearest dollar and contribute the spare change to the charity of their choosing.

Make Points Valuable

Make it worthwhile for people to sign up for your customer loyalty program by providing something of value in exchange. 

Assign a monetary value to your points, for instance, if your customer loyalty program includes cashback benefits so that customers can see how much they may earn—and spend—by making more purchases from you.

Credit cards are a great tool for this since they show consumers how they spend points dollar for dollar. All you have to do is watch any advertisement where points are offered in exchange for cash, gas, groceries, or airline miles.

Also Provide Non-monetary Benefits

Customers value values; in fact, two-thirds of them are more likely to spend money with brands that adopt positions on social and political topics that are important to them.

Thus, make sure your rewards program incorporates those principles as well.

With each purchase, TOMS Shoes donates a pair of shoes to a youngster in need. Knowing that its customers value resources for the developing world, TOMS goes above and beyond by introducing new products that support causes close to their hearts, such as maternity health, clean water access, animal welfare, and eye care, in an effort to inspire them to lend a hand in other ways.

Provide Different Opportunities To Enroll 

Once your customer loyalty program is up and running, make sure you’re advertising the advantages of signing up.

Indicate the points that customers can get from spending a certain amount of money next to the price if your online store offers rewards for purchases.

This may have happened to you when using an airline that has a credit card for loyalty points. The flight attendants may inform you that if you apply for the airline’s credit card, you could receive 30,000 miles toward your next trip.

Additional strategies to achieve this include pushing on-site push notifications upon completion of a point-earning activity by customers and advertising the program on social media platforms.

You Can Even Partner Up With Other Brands 

What is superior to a single reward? Well, there are two rewards.

Co-branding rewards programs are a fantastic method to increase brand awareness among prospective clients and to reward devoted current clients with even additional benefits.

Brands may provide free access to co-branded partnerships to their most devoted followers. For example, T-Mobile offers a Netflix membership to consumers who buy two or more phone lines.

Make Your Loyalty Program A Game

Everyone enjoys playing games and competing, so capitalize on that enthusiasm to engage with your audience more regularly.

Many companies gamify their loyalty programs for consumers in order to gain important interactions on their apps, websites, or at the point of sale.

Points translate easily into a gamified format. Consider Treehouse, which offers coding and app development lessons. Engaged users earn points that add up to a badge, which they can show off on their websites and social media accounts to prospective employers and coworkers.

In terms of budgetary freedom, you might not have much if your company is expanding. You may nonetheless, however, provide a compelling incentives scheme that encourages patronage.

10 Different Customer Loyalty Programs

Even if they don’t have the same financial clout as larger firms, developing enterprises can nevertheless use incentives to get customers to come back to their establishments. Small businesses must be innovative and create a special system that benefits both the business and the client when creating their rewards program.

Here are some typical strategies that expanding businesses use to increase client loyalty through rewards programs.

Punch Cards

Punch cards are a typical B2C company reward program. Customers who use it receive a business card with a hole punched in it following each transaction. Customers earn benefits and prizes when they accumulate enough punches on their cards. The advantage of this approach is that it ensures that customers will come back after a predetermined period of time in order to earn the incentive, encouraging repeat business and increasing revenue. 

With their well-liked punch card loyalty program, Nothing Bundt Cakes gives consumers a complimentary personal cake with every 12 cakes purchased.

Opt-In Email

An opt-in email asks for the customer’s email address so that you may communicate with them. Your business may email the customer offers or promotions when they provide their consent.

Emails can be sent at nearly any frequency and are inexpensive to write and send. To send emails effectively, you can also use email automation solutions.

Free Trials

Free trials can be utilized in rewards programs, but they are usually considered of as incentives to convert potential leads. Consider the scenario when you are about to introduce a new good or service. You can provide your loyalty program participants with a free trial. This serves as a marketing strategy that gets your customers ready for a follow-up sales contact in addition to rewarding their loyalty.

Partner Programs

Searching outside for companies to collaborate with is one method to bring value. You can make an offer that helps your partner and your shared clients, as well as yourself, by pooling your resources.

Companies that provide credit cards, such as Visa and MasterCard, frequently achieve this by providing cards that are endorsed by particular brands. While it’s wonderful to have a credit giant on your side, you should first look for non-competitive local firms that you can collaborate with in order to expand on what you have to offer.

Referrals Programs

When your customers can assist you in finding fresh leads, why should you do it all by yourself?

Offering a desirable reward for client referrals is one way to encourage devoted consumers to become advocates. Customers will gladly take the time to network your business with other potential prospects if your offer is compelling enough.

Points System

A tried-and-true technique for monitoring consumer loyalty is point tracking. A desirable incentive and a fair timeframe for earning the incentive are the two essential components of these programs’ success.

Point-based loyalty schemes aim to strike the ideal balance between the two to prevent customer annoyance. If you offer exercise equipment, for instance, customers may buy from you somewhat frequently, and there are a lot of different companies to pick from. 

Your incentive would have to be worthwhile, such as a complimentary t-shirt, and it would have to be earned by the consumer fast enough to motivate them to keep going for it without becoming obsolete.

Finding this balance by allocating a point value per dollar is a wise move, but you must ensure that it is equitable. A $10:100 point ratio could not be possible for your profit margin if it takes 100 points to earn a free t-shirt that typically costs $20, while a $1:1 point ratio might deter users from signing up altogether.

Loyalty Discounts

An added benefit to the conventional customer loyalty programs we’ve already discussed is loyalty discounts. These kinds of initiatives let you aid customers in return while gathering information that will enable you to tailor their purchasing experience. The Community Rewards program at Kroger is an excellent illustration of how loyalty discounts work.

Using this kind of program would entail providing consumers with regular, predictable discounts each time they show an identifying flag linking them to the program. This could be a phone number, a card, or a QR code.

Your company records information about the customer’s purchases on the back end. As you gain expertise, you’ll be able to recognize patterns, trends, and behaviors in your consumer base, which will increase their loyalty to your company.

Because the incentive is steady and predictable, these kinds of programs are quite effective at motivating customers to return again and time again.

VIP Memberships

When a company offers VIP benefits, it adds an air of exclusivity or luxury, much to the concept of a loyalty club.

Offering a VIP membership program allows clients to sign up for your company’s email or SMS in return for more user-friendly or better-chosen products. They will not only be more intrigued by your latest products, but they will also receive alerts every time they check their voicemail or email.

Mission Driven Programs

It is beneficial for the world and businesses to give back to the community. Offering extra perks for customers to spend with you, such as contributing to a worthy cause, is a terrific approach to building client loyalty.

For example, Mamaearth’s mission-driven program, states that for every purchase made in their store, they would plant a tree for it. Till now they have planted 482463 plants. 

Community Programs

For small businesses, community programs work really well since they can draw clients from the surrounding region or online.

Over the past year, it has become evident how a business may influence its audience by presenting itself as a means of fostering connections. Instances include the emergence of bakeries at nearby flea markets and family-run gyms that provide Zoom sessions to their patrons in an effort to make them feel more engaged. These are all actions that small businesses can do to foster social cohesion and client loyalty.

Conclusion

We hope that through this detailed blog, you were able to learn about the Customer loyalty program. However, if you are looking for an ecommerce development company that can help you with store development or maintenance, then you should check out Appic Softwares. 

We have an experienced team of ecommerce developers who are well-versed with loyalty program setup and more. You can even hire dedicated developers from us and let them manage your store. 

So, what are you waiting for?

Contact us now!

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