How Can You Launch an Effective Customer Loyalty Marketing Strategy?
Did you know that 9 in 10 Australians have registered for at least one customer loyalty marketing program?
It shows that loyalty programs are an excellent way of retaining customers and generating repeat business! And people like signing up for them for several reasons like
- They can shop from their favourite brands without spending a lot.
- They can get several rewards and member-exclusive perks.
- They can be a part of a broader community, etc.
With the average number of memberships per Australian being 4.4, we cannot deny that a customer loyalty marketing strategy can produce mind-blowing results!
This blog covers the benefits and types of customer loyalty marketing programs. It also discusses the metrics to measure your program results with some examples to help you get started!
What Is Customer Loyalty?
It is a customer’s willingness to purchase from your brand repeatedly. Typically, it is related to the experiences customers have before and after buying a product from you!
Focusing on your customer loyalty levels is crucial because- it costs more to acquire new customers than retain existing ones. Moreover, there are more chances of your current customers becoming your brand advocates and helping you drive referrals.
Your customer loyalty marketing strategy allows you to convince your customers to stay loyal to your brand in exchange for some benefits. These advantages include discounts, free shipping, early access to new collections, free samples, etc.
How Does a Customer Loyalty Marketing Program Work?
Loyalty marketing campaigns work by offering customers different incentives. You can design any program type, depending on your customer’s preferences, requirements, budgets, etc.
Once you plan a customer loyalty marketing strategy, try advertising it properly. Many customers would love to join your program but are unaware of what you offer. Thus, reaching out to your buyers and informing them about your customer loyalty marketing campaign can help more people join.
Also, very few companies know that they can also acquire new customers using a loyalty rewards program. Create a beneficial and delightful campaign, driving prospects to switch to your brand and sign up for your programs!
Benefits of Introducing an Effective Customer Loyalty Marketing Program
Launching a rewards campaign can help a business in several ways, like
Increased Creditworthiness and Trust
Customer loyalty programs help you foster trust between your company and customers. It also increases your brand’s creditworthiness, allowing you to beat the competition.
More Word-of-Mouth Publicity
The members of your customer loyalty marketing strategy are more likely to discuss your brand’s perks with others. The outcome? More word-of-mouth referrals and higher revenue!
Build Long-Term, Genuine Relationships
Most customer loyalty marketing programs are long-term, pursuing customers to stay with your brand for several months or years. Try making your campaign perks relevant and personalised for every customer to make them feel their membership is worth it!
Increased Share-of-Wallet (SOW)
SOW describes how much money a customer spends on your brand compared to your competitors. A beneficial customer loyalty marketing strategy helps you grab more SOW than other companies!
However, the SOW concept only works for specific industries. For example, a supermarket’s customers might stay loyal to them for many years but shop elsewhere when they get better deals.
Thus, try to make your customer loyalty marketing campaign unique. It helps you hook your customers forever and prevent them from switching brands.
What Steps Should Your Business Take to Increase Customer Loyalty?
Companies can take many measures to keep their customers loyal and strengthen relationships. Below are some of these ways that can empower your customer loyalty marketing program:
Show Your Customers You Care
People do not join a company’s customer loyalty marketing campaign unless they feel a personal bond with your brand. Your competitors might offer better rewards programs, confusing your customers.
You must differentiate your brand from others by forming emotional bonds and giving customers a reason to stay with you! Thus, thank your customers from time to time and express your gratitude, primarily to the existing members of your customer loyalty marketing program. Tell them that you care and that their support is crucial to your existence.
You can thank customers in many ways, like sending emails, social media messages, etc. But sending custom direct mail letters or postcards is your best bet because they are more personal and memorable!
You may use PostGrid’s direct mail services to automate the drafting, printing, and mailing of your postcards or letters. Our solutions let businesses send personalised items that set them apart from the crowd and win their customers’ hearts!
Form a Supportive and Educational Community
Your customer loyalty marketing strategy lets you create a helpful community for your existing customers. It is the best method to retain them and generate repeat orders without investing much.
Customers stay loyal to brands that readily offer solutions when they have a problem and answer their questions on time. Hence, you can offer them access to a community that does that on your behalf.
Yes! Many businesses use this method under their customer loyalty marketing campaign to save time while boosting engagement and forming a vast network.
Try launching a community forum and FAQs page on your website wherein customers can interact with one another. You may also post informative articles on this forum regularly so customers can find answers for themselves.
Modify Your Marketing Rewards Programs Frequently
It is advisable to make changes in your customer loyalty marketing strategy from time to time to keep customers hooked. Businesses must use unpredictable programs, exciting customers about what comes next!
Using a customer loyalty marketing program that offers the same benefits throughout several years might not work well for you in the long run. Instead, opt for a campaign that can entice more people to join and helps you keep up with the latest trends.
Focus On Customer Onboarding
It is best not to wait for a customer to buy a few items from you or register for your customer loyalty marketing program to appreciate them. Channel your efforts from the beginning to make an excellent first impression that helps you get more memberships without you doing anything else.
One way to do that is by focusing on your customer onboarding process. You can send them a handwritten welcome letter with a small discount for the next purchase or a reward. It makes customers warm up towards your company and lets them know you value them!
Personalise Everything
62% of customers expect to receive personalised marketing communications. Therefore, level up your correspondence channels to add personalisation.
Personalised messages help you offer tailored solutions to your customers’ needs. You must design your customer loyalty marketing program accordingly to retain more customers and provide them with what they need!
Understanding Customer Journeys
You cannot actively approach all customers to register for your customer loyalty marketing campaign. Understand the customer’s journey with you and analyse their purchase behaviours.
Be Generous About Your Program Benefits
Offering meagre discounts or rewards to your customers in exchange for high-value purchases under your customer loyalty marketing strategy is morally right! Customers can see right through your plan to make them spend more without getting anything valuable in return!
You do not always need to offer unbelievable discounts to entice customers. Provide value in other ways and highlight your benefits to show customers that you are better than the competitor brands.
Add More Communication Channels
Another way to keep customers loyal is by offering them many options to contact you. It can be anything from registering for your customer loyalty marketing program to enquiring about your products.
Most businesses are active on emails but do not answer calls or vice versa. Try resolving these issues before you launch an elaborate customer loyalty marketing campaign.
The above ways can help you improve loyalty levels among customers and get them to join your loyalty marketing programs.
Also, ensure your customer loyalty marketing strategy has the following features while building and launching it
- Simple to understand.
- Provide relevant perks or rewards.
- Delights and surprises members.
- Enables members to earn redeemable points.
- Boost engagement, etc.
Types of Customer Loyalty Marketing Programs for Your Business
There is no hard and fast rule to stick with specific rewards programs. You can use similar campaigns as your competitors or introduce new ideas according to your business.
Often, companies combine several types of customer loyalty marketing plans to appeal to all customers and get the best of it!
Here are some ideas for you:
Tiered Loyalty Programs
Tiered campaigns help you segment your audience into different categories, like new, long-term, and repeat customers. You can offer separate benefit sets to each, depending on how much they spend on your brand.
It is the best customer loyalty marketing strategy for high-end businesses like airlines, 5-star restaurants, hotels, etc. For example, the Hilton chain of hotels in Australia provides a program, namely Hilton Honors. Free wifi, lowest rates, exclusive rewards, etc., are some of its perks that make the campaign exciting for customers.
Hilton’s customer loyalty marketing program has four tiers- member, silver, gold, and diamond. It drives customers to spend more on the brand and upgrade to a higher level, helping the hotel generate more revenue!
Tiered programs are perfect for long-term, high-value purchases to ensure customers stay with your brand for several years.
Points-Based Customer Loyalty Marketing Strategy
Companies use point-based B2C and B2B loyalty marketing programs more commonly than the other types. They are simpler to understand and offer upfront benefits.
Unlike tiered campaigns, point-based programs are suitable for short-term, frequent purchases. For example, fast food joints like McDonald’s can have a successful brand loyalty marketing strategy to encourage people to buy from them regularly.
You can start by fixing the value of your points. Many businesses offer 1 point for every dollar customers spend.
Also, state the value of these points- for example, 50 points equal 10 dollars.
Paid Loyalty Marketing Campaigns
Charging customers to join your customer loyalty marketing program seems counterintuitive. But these paid campaigns can help you create a vast network of loyal customers.
Since they have paid to join the campaign, they are likely to make more purchases and avail of the benefits—to get their money’s worth. Design a program that solves their problems and offers tailored perks.
Your first step is to identify your customers’ issues, including high shipping costs, taxes, no discounts, etc. Then, encourage customers to register for your customer loyalty marketing strategy that offers to resolve them.
Make your program benefits member-exclusive so that only registered customers can get discounts, free shipping, etc.
Partnership Marketing and Loyalty Programs
Partnership or coalition campaigns for customer loyalty marketing let companies partner with one another to retain their customers.
You can collaborate with a business that offers similar products or services as yours and provide customers with co-branded deals. It depicts that you care for your customer base and understand their requirements.
However, choose the correct types of companies to collaborate with to get the best results. For example, an equipment store may create a customer loyalty marketing strategy with a sports apparel online shop. Whenever customers purchase from the store, they get a coupon code for a 10% discount on the partner’s website.
These strategies help two businesses benefit mutually from the same program and allow customers to save a lot on their overall purchases!
Game-Based Customer Loyalty Marketing Programs
You can always add exciting twists to your rewards campaigns to engage more people and generate publicity. One way to do that is to launch a game-based customer loyalty marketing strategy for your customers!
You can design games or contests and invite your existing customers to register. Ensure your prizes are appealing and encourage people to participate in your game-based loyalty program.
For instance, you can ask customers to buy a product from a specific collection or avail themselves of a particular service to enter the contest. Then, fix a timeline and inform them what to do next.
Also, the odds of winning the customer loyalty marketing content should be high, guaranteeing customers that it is legit. Announce the winners on your website or social media and tag them. It further increases your game’s authenticity and motivates people who have not yet joined your customer loyalty marketing program!
Please note that you must know how to end a loyalty program before you begin! If you do not want your strategy to last forever or need to make modifications, decide these things before the program’s launch. It helps you remind customers before it ends and encourages them to renew their memberships.
Moreover, it prevents the negative repercussions of ending a customer loyalty marketing strategy, like upsetting customers and driving them to other brands with active rewards programs.
What Are the Different Metrics to Know Your Customer Loyalty Rates?
Companies can use several methods to measure how well their customer loyalty marketing program is working! They can use one or many ways, depending on the type of campaign and the number of customers.
Retention Levels
The easiest way to measure customer loyalty is by checking your retention rates. How many customers purchased from you again during the campaign period?
Did your retention rate increase after you launched the customer loyalty marketing campaign?
Customer retention also indicates how long customers stick with your brand. You can measure your loyalty program’s results to check whether they continue buying from your business after the campaign ends.
Customer Loyalty Index (CLI)
CLI is a metric you can derive by conducting customer surveys or collecting feedback from social media and other channels. It helps measure the performance of your customer loyalty marketing strategy by finding out how loyal your customers are towards your brand.
However, it records the customer’s intentions about them buying from you in the future instead of their actual buying behaviour. Moreover, some customers might not give you honest answers, jeopardising the authenticity of the results.
Hence, use this metric to measure your customer loyalty marketing program’s performance only in combination with other methods to get an accurate idea.
Customer Effort Score (CES)
This score demonstrates how much effort customers need to make to contact your brand and resolve an issue. It allows businesses to measure customer satisfaction and experience.
You can get your CES by dividing the total number of customers agreeing their company interactions are effortless with the total responses. For instance, imagine your customer loyalty marketing program has 1,000 members. If 600 agree that reaching your company is effortless, your CES becomes 600/1,000 x 100 = 60.
CES is an effective metric to calculate the results of your customer loyalty marketing strategy because it highlights what your customers think about you! It also impacts acquisition levels by spreading brand awareness and publicity.
Negative Churn Rate
Negative churn ratios tell you how many customers stay with your company during a specific period, say a year! Your customer loyalty marketing strategy helps increase this ratio by driving more customer engagement and generating more repeat business.
A higher negative churn rate means your customer loyalty marketing program is successful. It works oppositely to churn rates that indicate the number of customers who leave the brand.
Customers that help improve your negative churn rate are those who either purchased more products or upgraded their services! You may use your customer loyalty marketing campaigns to get more people under this category and ensure they do not switch brands.
Net Promoter Score (NPS)
We all have received a pop-up on several websites wherein a company asks us to state how likely we are to recommend their brand to others. Usually, there are 11 circles on the screen from 0 to 10, prompting you to select your rating.
This score shows how many customers are loyal and willing to discuss your company’s offerings with others. Typically, you can use NPS as a metric to measure your customer loyalty marketing program’s results. A higher NPS denotes your campaign is successful and can drive more engagement!
Multiple Purchases from Different Collections
Convincing your customer to buy the same item from you over and over is not a tough deal to crack! But getting customers to explore different categories and purchase other products signs that your loyalty marketing programs are doing their job.
Calculating how often a customer buys an item from a different range is an effective metric to check if your customer loyalty marketing strategy can progress. Of course, you must design a program that encourages customers to purchase from different segments by offering relevant rewards!
Social Media Engagement
Successful loyalty marketing strategies for customer retention always get high publicity on social media. They drive several online mentions, tags, stories, comments, replies, etc., improving recognition and awareness.
You can monitor how many customers speak well of your company and how many do the opposite. It allows you to reach out to them and resolve their issues, convincing them to get on board with your customer loyalty marketing program.
Best Examples of Customer Loyalty Marketing Programs
Many Australian businesses offer rewards programs to their customers to grow their business. Here are some of the best examples for your reference:
Qantas Frequent Flyer
One of the top airline companies in Australia, Qantas offers a point-based customer loyalty marketing strategy for its regular clients.
Their frequent flyers can sign up for the program and earn points on every ticket they purchase. They can also get points on shopping with Qantas’s partnered brands! Every 1,000 points equal $20 worth of coupons.
Then, customers can redeem their points within a specific period to book hotel rooms (at select places) and buy tickets.
Please note that the Qantas Frequent Flyer customer loyalty marketing strategy is also tier-based and paid! There are five tiers, including bronze, silver, gold, platinum, and the most advanced program—the platinum one. Customers pay a $99.50 fee to join, but the perks make it worth it!
The Coffee Club
This brand has over 400 stores across the country with approximately 400 million customers! The Coffee Club also has a paid loyalty marketing plan, with its VIP club registration costing $25 yearly.
The members of this customer loyalty marketing program get multiple deals, like
- Three free coffees on signup.
- Buy one get one free on hot beverages.
- A 10% discount on food on specific days.
- Free drinks on members’ birthdays.
Customers can track their earned rewards through the membership card or loyalty app. The app also gives them a chance to get a dollar for every $10 they spend! There are also many other giveaways, offers, member-only rewards, etc.
Priceline Sister Club
Australia’s leading beauty and health chain, Priceline Pharmacy, has an extensive customer loyalty marketing strategy to retain customers. It allows them to build trustworthy relationships and improve their brand recall rates!
With over 470 stores in Australia, Priceline’s customer loyalty marketing program has three tiers- the Sister Club, diamond, and pink diamond. Members win several awards, depending on their tier type—helping them access exclusive partner perks, gifts, beauty boxes, etc.
Other perks include
- A $5 voucher for 400 points.
- Rewards on beauty consultations.
- The Sister club lets members earn points that never expire.
- Automatic quarterly benefits on every 1,000 Sister Club points.
The best part of Priceline’s customer loyalty marketing programs is that they customise their rewards for every customer. It makes them feel valued and empowers the company-customer bonds further!
How Can PostGrid’s Direct Mailing Solutions Allow Brands to Launch Successful Customer Loyalty Marketing Campaigns?
PostGrid offers companies innumerable ways to plan and execute an effective customer loyalty marketing strategy to improve retention rates! For instance, its direct mail API helps businesses automate mailing coupons, invitations, handwritten notes, personalised postcards, etc.
You may send these items to your existing customers to push them to buy from you again. Or invite them to join your rewards programs and become long-term members in exchange for some perks.
Below, we have mentioned a case study of how a client converted 500 new customers through referrals and retained 200 existing ones using a loyalty marketing strategy:
One of our clients in the retail and e-Commerce industry wanted to retain its customers using a customer loyalty marketing program. But they also required referrals to drive new acquisitions using the same strategy!
We suggested they use QR codes for their direct mail postcards that redirect customers to your loyalty rewards marketing program. The mailer highlights several benefits and perks of joining the club in a fun way.
Our pre-built design templates made it easier for the company to print eye-catching postcards with high-resolution graphics to convince their customers to join!
The program allowed members to earn redeemable points on purchases. It also offered to double these earnings with every two referrals, which was an excellent deal to entice customers!
The customer loyalty marketing campaign’s execution and its results:
Our client sent over 4,800 postcards to its existing customer base using PostGrid’s Hubspot integration. These mail items had custom QR codes, unique for every recipient—to track their responses and measure campaign success!
Nearly 40% of people signed up for the customer loyalty marketing program within a few days after getting the postcards. Moreover, the business converted 500 new clients from referrals and got hundreds of customers to purchase from them again!
How did PostGrid help:
- PostGrid’s direct mail CRM helped them design and print their mailers in only two business days. Our reputed network of printers enables us to assign a vendor nearest to the client to help speed up the process!
- Our address verification feature allowed the client to update the addresses of their existing customers before their customer loyalty marketing program. PostGrid also adds missing details and standardises delivery information to help Australia Post complete deliveries quickly.
- The client wanted to track their customer loyalty marketing mailers as soon as they sent them. Luckily, PostGrid offers per-piece and real-time tracking with easy access to campaign reports.
Conclusion
Some businesses think a customer loyalty marketing strategy can drain their budget and result in losses. However, it is the other way around if they do it right.
A consumer loyalty marketing program requires a lot of data-driven planning at the start. But it lets you retain your customers and improves your brand image, helping you generate more profits than you can imagine!
Automated tools like PostGrid make it simpler to conduct such programs at low rates and without any manual effort. Drop an email at sales@postgrid.com.au or sign up to learn more about how we help clients with their customer loyalty marketing campaigns!
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