Why actually should your customer be loyal to you? He has 21 loyalty cards in his wallet, he collects points in 30 online stores (mostly being unaware of that). He is more likely to complain loudly and leave you if you make a mistake that to be loyal if you customer service is perfect.Even though customer disloyalty is more and more an issue, well designed and executed retention program can greatly improve your sales – when retention grows by 5%, revenues grows by 25% – 95%.
So we made a list of 4 crucial factors, which must be taken into consideration on the way. We start from understanding what program actually is.
1. Loyalty program is a stimulus
The aim of a program is to convince customer that choosing our company pays off and encourage him to more purchases. The fact that the program exists is a stimulus – additional benefit from purchase.
To create desired effect, it must be properly adjusted:
– Too strong can make customer used to high standards which we cannot meet in a long run
– Too weak won’t get people’s interest
– Too frequent and aggressive will discourage them
– Too rare will be easily forgotten
3. Proportions are the key
Loyalty programs are pretty similar to each other – they’re all about rewarding purchases (with discount, points, cashback, premium materials): no room for some special originality here. But devils is in the detail. The point is to balance many factors:
– Attractive benefits for loyal customers,
– Effort – benefit ratio
– Size of your seasonal and regular discounts
– Dynamics of your business branch
3. Gamification
Loyalty program should develop along with growing customer loyalty and passing time, using gamefication – applying some games mechanisms in your program. It can be collecting (points), ranks, rewards, but pay attention also to achievement of badges or levels.
Based on knowledge you already gathered on your customers, determine how many levels of loyalty can you introduce and what criteria will be used for measuring customers progress (amount of purchases, amount of money spent, scoring…?). Arriving at new levels is an extra stimulus as we subconsciously are happy and proud when seeing our own progress (even in loyalty plan).
How to use customer’s loyalty levels: automation
It’s not about you giving your customers more and more discounts as they progress or spending amazing amount of money on gifts for them, Use these levels for communication:
– prepare different newsletter and mailing templates for each levels
– adapt website content to user’s in loyalty program
Try to be affirmative (Congratulations on achieving new level!) to build association between pleasant feeling of triumph and shopping at your store.
A lot depends at good copywriting here: concept of naming levels and idea of communication must be not only unique, but appropriate for your users.
4. Simplify and automatize
Use Marketing Automation for point counting and automated mails with information on achieving next level or benefits. If you have physical stores, consider beacons for loyalty program, so your customers don’t have to take out loyalty card out of their wallet.
It’s a general rule: if you can move some obstacles out of customer’s way, do it. Reduce choices and crossroads. Research prove that customers prefer simplicity over high quality customer service.
Not everyone needs loyalty program
See point 2 – if you can’t get right proportions, don’t do it. Better not to have a program that to have lousy one. How to recognize bad loyalty program?
– Unattractive to customer
– Non-intuitive, over-complicated
– Not put in long-term strategy, with no particular goals assigned to it
– Badly calculated.
What more do you pay attention to while creating and curating loyalty program?
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