CREATING CUSTOMER
LOYALTY PROGRAMS

05

  JULY, 2018

How does your brand reward the loyalty and behaviour of your desired customers? Is it through a discount card or point system? Or are you sheepishly admitting you really … gulp … don’t do anything at all?
How does your brand reward the loyalty and behaviour of your desired customers? Is it through a discount card or point system? Or are you sheepishly admitting you really … gulp … don’t do anything at all?
Don’t worry, we’re all guilty at times, perhaps not of overlooking the importance of our existing customers, but often in treating them all the same. With the soberingly high cost of acquiring new customers, it’s important we make the effort to engage, reward, and nurture our existing ones.

 

WHY REWARD LOYALTY?

The number one reason of course, will be to retain and grow your desired customer base, but there are other ‘perks’ from loyalty programs that will add immeasurable value.

Free Marketing – People talk. They also Like, Share, and hopefully report a positive experience to their circle of influence. According to Hubspot’s Ultimate Guide to Customer Loyalty, word of mouth marketing is more effective at driving new customers, than most forms of branded content and advertising. Loyal customers not only spend more, but tell their family and friends about your product or service.

“People talk. They also Like, Share, and hopefully report a positive experience to their circle of influence”

Upsell and Cross Sell Products – With any trusted brand relationship comes the opportunity to recommend other products or services. They might be ancillary to your own, or from a related ‘affiliate’ partner. Only today, my health insurance provider offered me a 10% discount to use their travel insurance affiliate, and it worked!  

It’s an Excuse to Regularly Talk to your Customers – How many rewards programs have to signed up to and then … crickets. No discounts. No newsletter. Nada!  If you’re going to all the effort to start a rewards program, take full advantage of it. Learn more about your customers and use this to continue the dialogue in a more personalised way. 

 

HOW CAN YOU REWARD?

According to our Hubspot Guide a customer loyalty program is a program offered by a company to those customers who frequently make purchases. I go one step further. Purchases yes, but it should also reward desired marketing behaviour. With ‘word of mouth’ marketing so powerful, then a share, like or referral can often equate to as much financially as a direct sale.

Given that the 2017 Loyalty Report suggests an average customer is involved with 14 loyalty programs, with the capacity to only engage with 7, it’s important to consider your strategy.

Use a Simple Counting System – One coffee equals one stamp. Buy 10 and the next is free! These loyalty programs can be relatively easy to set up and execute, and effective if you keep the logic simple. Yet, if you’re like me, you’ll have 4 different ‘coffee cards’ from various locations, all half filled and now ‘dog eared’ as they fight for real estate in my wallet. It can also be tricky to consolidate spend data for brands with both online and retail outlets.

Multi-Tiered Programs – A step up from the above are tiered loyalty programs. Virgin Atlantic Flying Club allows members to earn points which can elevate them up the ladder. The higher you move up, the more attractive the benefits.

Personalise Offers and Marketing – Instead of a ‘one size fits all’ approach to your loyalty program, what about tailoring the messages and rewards to suit the individual? Discounts aren’t always important to your customer, especially if you’re in a B2B market. Building up a data profile will enable more relevant, personalised and engaging marketing.

LOYALTY MARKETING

A lot of loyalty marketing today is still fairly homogeneous. Rewards are often based on a spend or a count system, and outbound communication takes a ‘one size fits all approach’.

Let me give you an example. Every year I travel with the same tour company and do a similar style of trip. As a ‘loyal customer’ I receive regular, but generic marketing correspondence, and the opportunity to take up ‘exclusive’ discounts on nominated trips. The problem is, the discounts are never off the holidays I like. Despite knowing all of my personal and purchase details I feel like this company doesn’t really know me. They don’t remember my birthday, or even realise that I travel at around the same time EVERY year! There is a better way.

Consider, not only my engagement, but loyalty to a travel company who ‘knows me’. Kind of like my own personal travel agent, sending me all the relevant deals, at the right time, through my preferred channel. They remember my birthday, and send me a special thank you after each and every trip. That’s the kind of company I want a relationship with!

One to one, multichannel marketing ticks all of these boxes, and campaigns can be ongoing and fully automated. A data driven system to create personalised messages, manage time and activity triggers, and execute via print, eDM, SMS and video channels.

 

 

 

PERSONALISED TRAVEL VIDEO
 
In summary, there is clearly more than one way to skin a loyalty program, and probably having something is better than nothing at all. Whilst we didn’t cover measuring the effectiveness of your program (that’s a whole other blog), this is obviously a critical part of the process.

My key takeaways from writing this article, are one, the importance and reach of ‘word of mouth’ marketing. A behaviour that many consumer programs don’t reward effectively enough. Secondly, how many brands still talk to and reward their customers homogeneously. With analytics, tracking and technology at an all time high, surely brands can start to make our communication a little more personal.

FOR MORE INFORMATION ON PERSONALISED, ONE TO ONE MARKETING

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