To make your loyalty program stand out, you should align the program to your business strategy. Make it more personalized and aligned for better retention
Did you know that a vast majority of your customers visit your store only one time? Yes, one time! You spend all that money and time on customer acquisition only so that customers can come that one time.
Now sit back and think! How much did you spend, and what did you get from it? The answers were expensive.
It’s said that it costs five times more to acquire a new customer as against retaining the existing customer. Plus, you get a 25%-95% increase in profits if you increase your retention spend by 5%. That’s huge!
You cannot deny that your existing customers are more likely to try out your new product launches against a new customer.
That’s precisely why customer loyalty is an essential component of your retail business. It is loyalty that drives customers to your stores again and again. When you spend on their experiences, they tend to spend more on your business.
However, having a good loyalty program is not enough. You need to drive a program that is aligned with your business strategy.
- You will know your business goals and how the loyalty program can help you achieve the same
- You will create a program after thoroughly understanding what your customers need. It will eventually help increase retention and drive loyalty.
The question now is how? What steps should you take to align these two? Based on our understanding of the loyalty programs and how customers consume it, we have devised a few tips that might help.
#1 Use Data to Drive Loyalty
It is essential to know your customers to drive maximum value from your loyalty program. You should ideally connect the program to your customer database. It will help you understand how the customer reacts to every experience or incentive that you have created.
You can accordingly drive more value, which will eventually result in better sales. For instance, when you know that most customers love a particular product at your store, you should add it to your loyalty rewards. However, you will not know this unless you have connected the insights to your program.
You can even improve their experience across touchpoints with a complete understanding of their preferences, habits, and other factors that drive loyalty.
#2 Keep it Simple
The whole loyalty program should be as efficient and straightforward as possible. It should be rewarding, no doubt but, the learning curve should be minimal.
For instance, the customer should know how they can earn a point and when they can redeem a point. You should also ensure that redeeming the points is simple and efficient.
You should have fewer rules, and the system should be transparent. When you keep it simple, you gain more trust.
While it is important to be simple, you should also try to be creative. Offering exciting experiences across your loyalty program can make retention easier.
#3 Align it to Organizational Objectives
Loyalty should be driven by customer relationships and not by the incentives or the products you offer. You need to use the program to drive more engagement and ensure your customers talk about experiences they share with your brand.
This will help you achieve organizational-level goals as well. Your business objectives are aligned with customer relationship and engagement. Every small step you take through this program should be designed to make the customer’s overall experience delightful.
Apart from the in-store experiences, you should drive experiences through messages, campaigns, and other channels. Spark conversations that will drive repeat visits. An omnichannel presence and a customer-driven program will help you gain more profits.
You can enjoy a successful loyalty program when you align the program’s goals to your business goals. Moreover, you should plan the program in a way built on the customer’s insights and is driven by their preferences.
Building a solid relationship with your customer through transparency and trust can enable continuous success. Here are a few best practices to boost your loyalty program:
- Use the customer insights to incentivize the program
- Keep it simple and efficient
- Do not add too many terms and conditions that you confuse the end customer
- Offer omnichannel and personalized experiences to drive repeat visits
A successful rewards program will help you gain excellent results that will drive your business growth.