HOW DO YOU CREATE A LOYALTY PROGRAM THAT LASTS?
Creating a loyalty program is not a difficult task. However, knowing what gives your customers maximum satisfaction and what motivates them to keep coming back to your business. When you get those basics right, you can create a loyalty program that addresses your customers’ ultimate needs and your business at the same time.
Brand loyalty is the primary aim of every loyalty program. Let this fact remain at the center of your planning while creating your program. Meanwhile, businesses and consumers have different goals and objectives. While buyers want to patronize a company that offers them products or services at a lower price and makes them feel esteemed, sellers also seek to build a large customer base that will keep patronizing.
So, how do you create a program that will achieve this balance? Here’s a step-by-step guide on creating a loyalty program that lasts with a strong following of loyal customers.
1. Choose a unique name
If you want to launch a successful loyalty program, you must get everything right, and it starts from the name you call it.
Indeed, your program’s name sets the tone for your customers, who are the potential members. It can be the reason a buyer chooses to join the program or sign up for another brand. Hence, you need to sit down and think deeply of a unique name that will sell your brand to buyers.
Your program’s name will communicate what your members stand to gain for joining the program. Also, emotion is one thing that can motivate customers to join your program. Hence, it’s good to find a name that can inspire a feeling that aligns your brand with your products or services.
Besides, what you call your loyalty and rewards program dramatically impacts the overall effectiveness of the scheme. Although most businesses undervalue what they call their loyalty program, it is crucial in establishing a strong relationship with the members.
2. Know your customers’ ultimate needs.
Typically, every loyalty marketing program’s goal is to gain customer loyalty, as the name implies. At the same time, customers cannot be loyal to a brand that cannot satisfy their needs. The same thing applies to your loyalty program.
One of the easiest ways to encourage customers to join your loyalty program is to design it to fit your customers’ needs. When you achieve this goal, you don’t need to persuade your customers before they sign up. Everybody wants to be in a place where he is valued. So are your customers too.
Now, how do you know your customers’ ultimate needs? It’s simple. Implement the following strategies to get the best result:
When you have decided to create a loyalty and reward program, thank you for coming is not the only thing you do when customers buy from your store. As your customers patronize, make sure you compile a contact list to have your existing customers’ details.
This step will help you create greater insight into how many customers frequently interact with your brand and why. It will also facilitate an easy launch of your loyalty marketing campaigns.
- Track your customer behaviors.
You have to study your customers’ behaviors to know what they want and when they want it. That will help you build a program that will satisfy them to the fullest.
- Take a multifaceted approach.
It is crucial to categorize your customers’ traits and preferences. It will help you have a multifaceted perspective of your diversified customers. When you get this right, you can be sure of having a program that will satisfy your customers with their uniqueness and diversities.
3. Choose your preferred loyalty program.
This step is one of the most crucial in the entire creating process. After you have known your customers’ ultimate needs, the next step is to choose the best type of loyalty and rewards programs that will motivate your customers to be loyal to you.
Here’s a list of the most common loyalty and rewards programs you can choose for your business.
- Points-based program: This type of program is the most common out there. In this point system, customers earn points for every purchase, which they can either use for future purchases or redeeming the points in other forms of reward.
- The tier-based program: in this type of program, customers will have to continue making more purchases to earn the required points to get to the next level—the higher the tier, the better the rewards.
- The paid program.
This program requires loyal customers to pay an annual fee to join the company’s VIP list. Customers on this list have access to several opportunities and outstanding rewards.
Other programs are the charity program, the partner program, the community program, the subscription program, etc.
4. Reward a variety of customer actions.
While creating your loyalty program, you must be bear in mind that loyalty marketing is not all about rewarding your customers only when they purchase. Many successful loyalty programs reward every action of their customers in favor of the business.
Your loyal customers should get rewards for sharing your posts, following your brand’s page, liking your posts, signing up for your emails, and more.
5. Offer a variety of rewards.
We’ve earlier discussed that customers have different needs and taste. So, you wouldn’t want to offer the same reward for all and expect all-around customers’ satisfaction. Ensure that you provide a wide variety of rewards to satisfy your esteemed customers’ various needs.
While some customers like to go on a trip, some may value a members-only event that separates them from other customers. However, this step will only be more straightforward if you understand your customers’ behaviors better.
6. Provide multiple opportunities for customers to enroll.
No matter how rewarding your loyalty program is, it is not complete if your customers find it difficult to join. You can create a mobile app that works on every mobile device to make it easy for your customers to access the program anywhere, anytime. You can also use loyalty cards, coupons, discounts, freebies, and more to keep it simple for your customers.
Loyalty and rewards programs are useful tools to build a large customer base that will keep coming back time after time. However, many loyalty programs failed because the organizers are ignorant of some of the abovementioned facts. Every successful loyalty program needs to focus on its customers’ needs and preferences.
Customer loyalty is defined as the willingness of a customer to interact with a specific company brand or purchase a product or service as presented by the company continuously. This loyalty program can also grow or be cultivated through the deliberate efforts of the business brand. However, the most critical factor to note is that a customer loyalty program’s effectiveness or success hinges on such customers’ favorable experiences with the brand.
This factor propels such customers to return and increases their likelihood to make repeat purchases from such businesses. Research proved that loyal customers could spend up to 67% more on desired products and services than new customers. Mind you, these loyal customers may only constitute 20% of your total customer base, but they can drive up to 80% of your total revenue. Hence the need to be deliberate about setting up a viable customer loyalty program.
Particularly in a somewhat saturated niche, it is vital to focus more on retaining a customer than acquiring new ones. Statistics show that it is five times easier to retain an existing customer than to acquire a new one. As a result, you can get a loyal customer to keep buying your offered product or service for practically their lifetime. This article lists out the top benefits of setting up a customer loyalty program.
Advantages of Customer Loyalty Programs
- Drive a continuous business
Loyalty programs allow your business to remain the first thing on customers’ lips when they feel a need for what you sell. These loyal customers are the most likely ones to return to your brand repeatedly after making a purchase. At first, some of them might have just found your bran randomly, but just one interaction should be enough to retain them and make them come back with the assurance of being satisfied.
The excellent experience you give to customers is your surest bet that they are willing to return to buy. And the chance of creating such an unforgettable experience depends on many factors. One of them is customer service relationship, delivery time, quality of product or service, and more importantly, the loyalty reward program that motivates them to return.
- Build a team of brand ambassadors
A team of brand ambassadors is the first loyal customer who kept coming back. And not only so, but they go ahead to spread the great news about your brand through direct word-of-mouth marketing without pay. Alternatively, some of them can post reviews on your site or share what they enjoy about your brand through social media. Research showed that happy and satisfied customers are more likely to share selling points of your business product or service with others.
Happy customers will also likely tell family and friends about your brand, making you reach more people and make more sales. As a result, these loyal customers turn brand ambassadors can save you much money from marketing while bringing you great results. And if you continue to impress customers, the team of influencers or brand ambassadors keeps increasing, with more results.
- Boost your revenue
What better way to boost your revenue than the assurance that a large portion of your existing customers returns and buy again. It is already a fact that these returning customers spend much more (close to 70%) than new customers. This increase is that they have built a level of trust in the brand, which continues to grow as a favored choice.
As a result, once a customer enjoys satisfaction with your product or service, they are willing to spend more money on it. Consequently, you get more revenues from sales to these returning customers who bring others to buy. Your net revenues also increase as you may not have to increase your marketing expenses while you rake in more sales revenues.
- Get valuable feedback
Through effective loyalty programs, loyal customers are more willing to answer surveys, quizzes, questionnaires, fill in contact forms, and other feedback channels. Moreover, they already like your brand and derive satisfaction from associating with your products and services. Therefore, it takes little effort to get a response or an engagement from them.
More so, these loyal customers are willing to share what they feel can help you improve the brand quality. At other times, they may want to encourage you to keep up your efforts on brand quality. Therefore, when you crate customer loyalty programs, you improve your chances of making returning customers give you helpful advice and motivation to keep up the excellent work. This strategy enhances the results you can get from core marketing strategies and actionable tactics.
- Guard against competition
As you enjoy the pleasures of customer loyalty programs and results, remember the existence of your competitors who are on the prowl. Therefore, you can protect your brand against competitors by developing a team of loyal customers who are willing to spend every penny on your brand. And as you earn more from these loyal customers, your competitor loses more.
As a result, the brand owner has to cultivate customer loyalty programs’ advantages to achieve greater productivity. Ensure you keep your loyal customers happy to reduce the chance they consider a competitor’s brand continually. More so, as you give more reward and profit to these loyal customers, you give more reason to continue to purchase from you and not your competitors.
On a final note, companies have discovered these fantastic benefits from valuable loyalty programs that help them achieve their marketing goals., every customer is happy to get a 20% bonus on a product or service because they are a returning customer. The customer marketing approach also creates a kind of omnichannel program through a sustainable customer database.
These loyalty programs convince customers that you care and that you have their best interests at heart. Therefore, it is no crime to benefit from this existing benefit for a long-lasting business relationship. The program also allows your brand to grow more value and drive up sales while beating off competitors.
Hopefully, you have not believed the lie that the easiest part of a business is starting because acquiring and sustaining customers can pose more challenges and may have caused some to give up on their business dreams. While it is essential to spend a great deal at spreading your brand’s awareness and winning the hearts of potential customers, you also have to prepare for what it takes to retain them.
A great brand should make room for more customers to return over and over again due to great satisfaction. It is also essential to learn the less challenging strategies of achieving better results, customer loyalty programs. These programs keep customers satisfied as they continually visit the brand to make purchases. Perhaps, the next notable question be how long it takes to build an effective customer loyalty program?
How long does Customer Loyalty Take?
Brand marketing departments spend much time buzzing around special selling seasons to dole out special offers to new and existing customers. For instance, holidays such as Black Friday, Christmas, New Year, Thanksgiving, Cyber Monday, and others are great opportunities. And part of the rush hour, a customer loyalty program brings in another twist to the story.
More so, great brands have implemented several loyalty programs and have established the goodies as returns. For example, Coca-Cola, Walmart, Nike, Victoria’s Secret, and some other top brands are users of customer loyalty programs that come as often as possible within a year. Notably, the length of time that the customer loyalty program takes may depend on the type of program’s choice. For instance, there are two basic types of loyalty programs:
- Homebuilt, in-house, or hosted reward programs, which boasts of various unknown variables and requires more customization from brand owners to build effectiveness from the targeted customers
- Software-as-a-Service (SaaS) partner reward programs are more like out-of-the-box innovative strategies to retain existing customers towards increased revenue through sustainable customer satisfaction and rewards. Many ecommerce stores such as BigCommerce and Shopify find this program very useful and perhaps because it requires less customization than others.
Hosted programs that require more customization take a longer time to implement. Furthermore, the brand may also spend even more time educating its employees about the program’s application. Brands can spend between one month and a year to develop a workable loyalty program even before the start of the hosted program. On the other hand, SaaS solutions take a shorter time to implement.
More so, because this process is quicker than others, users can implement them with fewer touchpoints. In all, implementing SaaS programs may not take more than a few weeks at most. In some cases, the implementation may take as little as a day at its lengthiest possible time. More so, apart from the choice of the loyalty program to use, perhaps the next piece of the puzzle can identify the best time to implement the loyalty programs.
When will Customers start to Trust Your Brand?
Based on a piece of professional advice derived from a new survey, it may take up to two years for your customers to completely trust and patronize your brand. In fact, in more specific terms, a customer takes up to two years of continuous dealing before agreeing that your brand product or service is one that can be trusted completely. SDL, a customer engagement company, published this fact while sampling up to 2835 people from 6 continents, five languages, nine markets, and four generations.
However, to reach the revenue topping point, it can take up to twice that amount of time: four solid years. At this point, your customers begin to spend much more money on your brand than on any other competitor. If you are more prepared for this work, you can determine to spend five years to get this done and begin to witness results. Similarly, you find it easier to treat your friends that you have remained together for more than 5 years than those you met only 1 or 2 years ago. The confidence is more natural with age-long friends than with others.
Best time to start a loyalty program
In the plot to identify the best loyalty marketing plan and program that can yield the best results for your business, three elements can help you make better decisions than others:
- Type of products
The industry your business brand is in determines the choice of loyalty program to integrate. Each of these aspects of the industry has its uptime seasons or ‘busy’ seasons that a marketing expert must consider when launching a new loyalty program campaign. For instance, ecommerce stores sell more during the festive seasons, holidays, and particularly Black Friday.
Besides, office, business, school-related stores, and suppliers sell more of their products during the back-to-school season. Similarly, fitness products may sell more during the New Year when many people are looking for ways to execute their resolutions. The time taken to implement loyalty programs includes preparation, planning, and the actual implementation.
- Length of the testing period and the launch stages
When you choose the program type, design, and customizes the new product or service, the next step is to roll out stage-by-stage all the required features and improvements throughout the timeline. Creating and nurturing a loyalty program is not a once-and-for-all system, but it demands closer attention and needs to be maintained over time.
Therefore, you may need to give yourself enough time while you focus more on the progress you would be making. A good strategy that many companies employ is the soft launch, which is a way of making the new program available to first a handful of people and getting all necessary feedback on them. When the company refines these reasons according to the received feedback, the final product is always nearly perfect.
- Size of the store or company brand
The size of your store or your business can also determine the loyalty program support that you need and when most are appropriate to launch the same. It may even be the most critical factor to consider before the start of the loyalty campaign program. In other words, it takes a reasonable time to grow and evolve into a system that can continually make more profit for the owner. Also, the process has the possibility of getting more prolonged than expected, depending on the size of the store
On a final note, we have established that the time it takes to build a formidable customer loyalty program is relatively high. But that is why there is no better time to buy a kick of such exceptional programs than on special occasions. Also, loyalty marketing program experts spend more time nurturing and cultivating the program before establishing trust with customers.