Guarantee a 15% Revenue Boost with Loyalty Programs?
First, you need to understand why it is you need a Loyalty & Referral Engagement Program. (Hint: Revenue & Retention)
A loyalty program can align your entire business toward the most profitable segment of your customer base, customers who have high repeat purchases or order value. As the program continues and matures, you’ll be able to use the analytics data you’ve collected from your platform to uncover ways to make the least profitable customers become more profitable and thereby increasing your customer lifetime value.
Recent studies have shown that loyal customers tend to convert and spend more money with brands they like, with around 78% of them being willing to spread the word to family and friends.
Combine the fact that loyal customers are more likely to refer business to a company that they like and the fact that their network is about 92% more likely to convert based on those references, and you’ve got a very strong revenue engine that’s just waiting to be turned on.
So, knowing that there’s a huge revenue potential waiting to be tapped from loyal customers what components are needed to run a Loyalty Program. While businesses can, and do, customize individual loyalty programs, it should be understood that a loyalty program comes down to this basic principal – reward customers for taking certain actions and they are likely to stay with your company.
Let’s look at the components of a Successful Loyalty Program.
1. Defined Actions that Result in Rewards
- Successful loyalty programs focus on a single customer action: getting customers to buy again. Rewarding for repeat orders is top priority for successful loyalty programs but rewarding for other actions such as store visits, referrals, social shares, etc. also builds engagement.
2. Clear Reward Redemptions
- The clearer and simpler this step is the more engaged participants will be. Avoid only allowing customers to redeem points manually or offering rewards which are difficult to redeem (i.e. coupons or gift certificates that are “only good at certain locations at certain times”, etc.)
3. Reward Variety
- Offer your customers several kinds of rewards but take comfort knowing that not all have to be monetary. Sometimes customers simply like to be recognized but adding in free shipping or discounts never hurts. Whatever rewards you offer keep it simple at first, start with three or four and then by looking at analytics and conducting surveys see what’s working and what’s not. This allows you to confirm if more are needed and what excites your participants.
4. Rules: K.I.S.S.
- When it comes to the rules of your loyalty program, Keep It Simple Silly or you’ll drive people away. The rules simply need to be sensible, clear and are ones that protect you from abusers.
While it can be hard to retain customers in today’s fast paced environment, you can do it with a Loyalty Program, especially if you understand the core aspects of a Successful Loyalty Program. Hopefully the above information will help you get started. However, before you do start you should connect with one of our Loyalty Program Specialists so we can make sure you are indeed on the right path. That’s the only way to be sure you’re pushing things in your company’s favor!
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