Successful Loyalty Program

How to Run Successful Loyalty Programs Without Offering Discounts

Discount! The eight-letter word has the power to attract new customers, increase sales, and enhance inventory turnover. Being one of the oldest forms of sales promotion, it has been used by almost all businesses at least once since their inception. But can it enhance brand loyalty?

Various studies have found that discounts can’t drive loyalty. On the contrary, it can have opposite effects.

As per the findings of double-blind studies, discounts reduce the efficacy of the products that are being discounted. Many customers believe that discounted products do not perform as strongly as their full-priced counterparts. In the long run, discounts decrease brand value and repel discerning and value-conscious customers.

But don’t worry. You don’t need to offer discounts to attract customers and make them purchase repeatedly. This blog post explains how you run successful loyalty programs without offering discounts. Read on and thank us later.

1. Offer free trials

Free trials drive excellent conversion rates. A 2017 study found that companies that offered free trials reported average conversions of 65 percent among users. Another study revealed that free trials are extremely more likely to convert prospects into paying customers and retain them for a long time. If you consider offering free trials, make sure you offer it for one to two weeks to enable users to use the product for a reasonable duration. By that, they will understand the value of the product and know its worth.

2. Send welcome messages

Did you know that a welcome message can increase customer engagement by 33 percent? A majority of customers, close to 75 percent to be precise, expect a welcome message from a brand, reveals a study. Among welcome messages, welcome emails result in five times more clicks, four times more open rates, and a much higher read rate than other marketing emails.

After your customers sign up for free trials or make their first purchase, send personalized and heartwarming welcome messages. Make sure that your welcome emails address your customers by their first names. Also, include call-to-actions in the welcome emails to encourage your customers to visit your website.

3. Offer attractive payment or subscription plans

Payment plans not only help customers to pay conveniently but also facilitate better customer engagement. Brands that offer attractive payment and subscription plans have massive advantages over brands that require their customers to pay upfront prices for their purchases. Convenient payment plans and processes provide a huge opportunity to enhance loyalty.

Make sure your payment plans are simple and affordable for your customers. Have multiple payment options such as net banking, mobile wallet, and Unified Payment Interface, as well as traditional options such as credit cards, debit cards, and of course, cash.

4. Remember and celebrate special occasions

Maya Angelou rightly said, “People will forget what you said, they may forget what you did, but they will never forget how you made them feel.” When you remember your customers’ birthdays, anniversaries, and other special occasions in their lives it makes them feel special and remembered.

Many successful brands have set a precedent by sending personalized notes and gifts to their customers. To encourage their customers to celebrate their special occasions with them, many brands tailor bespoke coupons for their customers. Some brands such as Barbeque Nation celebrate their customers’ birthdays, anniversaries, and other special days with pomp and ceremony.

5. Provide excellent customer service

What do Apple, Starbucks, Ritz Carlton, and Zappos have in common? They run best-in-class loyalty programs. Do they have anything else in common? They provide exceptional customer service. It’s not at all surprising how the brands in question command relentless customer loyalty despite charging a premium for their products and services. 

Once you provide awesome customer service, you will create immense value for your customers and you will win their loyalty. When it comes to providing excellent customer service, make it extremely easy for your customers to contact you. Don’t rely only on phones, use multiple channels such as chat, text messaging, instant messaging, and social media to provide customer support.

6. Create a community and run membership programs

Did you know that online communities have a massive impact on brand loyalty? A recent study found that nearly two-thirds of respondents said that being members of online communities made a huge impact on brand loyalty. It’s not at all surprising why brands such as Harley Davidson, PlayStation, Lego, Sephora, Disney, and Barbie have such gigantic communities all over the globe.

You can create a close-knit community for your customers, channel partners, and influencers and organize various events for members. You also can run tier-based membership programs and create special or exclusive clubs for community members.

7. Enable customers to give back for a good cause

Does giving back to a good cause increase brand loyalty? Oh yes. Instead of offering discounts, many brands charge a premium and donate a portion of their revenues to several good causes and keep their customers invested in them and their mission. A great example of a brand that is winning customer loyalty with its philanthropic campaigns is TOMS Shoes, which donates a pair of shoes to the needy for every pair purchased. By including the cost of the free shoe into the price of every shoe sold, the company is not only sustaining its operations but is also making a profit.

When customers donate to a good cause, they feel good about themselves and that encourages more repeat purchases. The sense of pride in doing something for society is priceless. Compared with a brand that doesn’t support philanthropic activities, a brand that contributes to a cause has more chance of getting loyal customers.

8. Make your loyalty programs transparent

At a time when loyalty frauds are on the rise, having a transparent loyalty program will win customers’ trust and enhance your brand image. At LoyaltyXpert, we take transparency extremely seriously. Our features such as dual wallet, and QR-based scanning, helped our clients to run crystal clear loyalty programs. You can run transparent loyalty programs and prevent loyalty fraud by partnering with a trustworthy solution provider such as LoyaltyXpert.

In conclusion

Discounts can attract price-sensitive customers but they can’t retain them for long. A little higher discount from a rival brand can make them leave in hordes. Those who don’t look beyond discounts aren’t your customers anyway. So why waste your time, effort, and resources on them?

At LoyaltyXpert, we can equip you with solutions to unlock unwavering customer loyalty. Book a free demo now to find out if it would work for you or not.