How can loyalty programs help brands reach out to customers and make a difference?
Brand loyalty is a pattern of consumer behavior where customers become committed to brands and make repeat purchases from the same firm. Loyal customers do not focus on the price factor.
Loyalty programs will always have a place in the market. Customers wish to be recognized for the loyalty that they show towards a brand or retailer. However, at the same time, traditional loyalty programs are losing their relevance. They are set to become more prominent, personalized, and more of a connection between the consumer and the brand.
Understanding the general aspects of loyalty, choosing a suitable type of program, and continually using fresh ideas for creating coveted loyal customers remains crucial when it comes to getting the best out of the loyalty programs.
Loyalty programs can be membership programs, relationship programs, or discounts, service, and shipping-related perks.
• Discount or perks
Companies or retailers provide discounts and perks to buyers. They drive repeat business but may not help in creating a loyal customer base.
• Relationship program
Relationship programs are about content and connection and not about discounts. Nike’s relationship program is the best example. If you buy running shoes, Nike provides personalized content relevant for a marathon runner. The content educates you. They know you, your likes, dislikes, and offer only the most relevant messages.
• Membership program
Amazon’s Prime program is the best example. Members pay to get access to perks like videos, and more. Your perks are standard for all the members.
General aspects of customer loyalty
• The investment
The budget or investment for customer loyalty can be spent on making consumers happy with gifts and improvement in the service.
• Developing savvy
How well do you know your customers? You can simply send them a survey or ask questions during the interaction. The data can help in designing strategies that can make them more loyal.
• Harmonizing with customers
Complementing the customers and serving them better. Training the employees and making little changes in the way the firm communicates with customers can prove to be of great help for retaining consumers.
Six ideas that can help in creating coveted loyal customers
• Don’t mix loyalty programs with marketing
If you lose customers as soon as you take away the rewards and perks, then the firm mistakenly introduced a marketing program as a loyalty program. Loyal customers stay with the brand because of the overall experience, and not just for the perks or rewards.
• Creating an emotional bond with the customer
There is a thin point of difference when it comes to loyal and satisfied customers. Loyalty is an emotion, while satisfaction is a rating. Find a way to connect to the customers, make them feel special, thank them for the business, and treat them like they wish to be treated.
• Personalization and customization
Providing a tailored and personalized experience to customers is easy these days due to the availability of data. Thus, make sure all the communication between your firm and the customer is personalized.
• Provide priority shipping
Customer satisfaction measurement and research specialist, CFI Group, conducted a study to find out why consumers signup for loyalty programs. Roughly, 63% of the study participants said they prefer to go for a loyalty program for speedier delivery of products. Most of the e-commerce players sell loyalty programs in the form of membership like a piece of cake because consumers appreciate priority or free shipping while buying products.
• Creating confidence
People wish to do business with firms that they know, like, and trust. Out of these three factors, creating trust is the hardest part. Providing a consistent, above average, and predictable experience at all times can help in earning trust.
• Break down customer loyalty into small chunks
Rather than focusing on the lifetime, the loyalty strategy should concentrate on the next time. What is the firm doing to make sure the customer would come back the next time? Think about the next time, every time.
Reshaping loyalty programs that were designed a decade ago
Everyone is a part of some, or the other, loyalty program these days. However, very few loyalty program members remain loyal to the brand.
Several businesses appreciate the importance of loyalty programs. But, they are using strategies that were designed several years ago. Consumer’s expectation and the competition was much different back then. Thus, these old programs do not perform anymore.
In the post-COVID19 scenario, loyalty programs need to be appealing for the-savvy consumers, relevant to industry trends, and easy to access.
Loyalty programs are not cheap and may need as much as 5 percent of the total sales value as a budget. Thus, they need to be designed with the right discipline to reach the right set of customers.
The company’s top and bottom-line numbers can have a dramatic impact, with just a small increase in loyalty. It results in higher growth in terms of engagement or brand equity. Customer loyalty is one of the secret weapons used by small businesses for growth. It requires the least investment compared to the cost needed for acquiring new consumers and is the best way to build a business. With customer loyalty, you can retain the customers easily, you get more referrals from them, and they write great reviews as well.
Every customer loves a specific shop and brand. At times, they remain loyal to them even if there’s no loyalty program. So, targeting the right set of buyers for loyalty programs is essential. Experts advise firms first to target customers who buy from multiple brands so that they can be converted into loyal brand ambassadors.
Can loyalty programs prove cheaper than spending on advertising and marketing to get new customers onboard? The answer is yes, research has already highlighted that bringing a new consumer to the brand can be between 5 to 25% more expensive compared to retaining the existing ones.
The best example of a superb loyalty program is Amazon Prime. It influences the customer’s behavior in some way or the other.
If you need a specialist firm to design and deploy a loyalty program for your brand, you should discuss your project details with LoyaltyXpert. The team can help in drastically improving the brand’s customer retention rate.