How to grow a customer loyalty program
According to a survey by management consultants McKinsey, the average American household subscribes to 18 loyalty programs. It has therefore become imperative for companies to have a scheme of their own.
Loyalty programs boost sales, aid client retention and promote new services and products easily. Plus, with 40% of online shopping revenue coming from repeat customers in the U.S., loyalty programs can make all the difference to a business’s bottom line.
Even more so when you consider that this 40% is made up from just 8% of customers.
However, it is not enough simply for a company to have a loyalty plan. How do you compete with the big stores that throw thousands of dollars into advertising? Without key planning behind it, huge opportunities are missed.
There is a 27% chance that a new customer will buy from a company again once they have made their initial purchase. That’s a pretty high conversion rate, but that rockets to 45% upon their second purchase, and then 54% after that.
Marketers spend a lot of time trying to acquire customers, when a loyalty scheme engages a ripe audience. Businesses need to be shrewd and strategic in how they use and grow their loyalty programs.
SMEs or non-profits need a customized strategy
Growth requires a clever marketing strategy. A loyalty program has to fulfill customer needs and requirements from the outset. For example, it could include offering discounts, imparting unique information, or providing a one-of-a-kind service like a VIP account.
- Rewards points could be distributed to customers who have spent over a certain amount.
- If you are a non-profit or a small business, providing exclusive and innovative content (blog, white paper, etc.) that discusses educational topics otherwise not accessible to other members of the public can also build loyalty.
- You can also initiate strategic partnerships to promote your plan. To find a good fit, understand your customers’ purchase processes and behavior. For example, if you’re a small dog food company, you might partner with a non-profit that promotes care and shelter for dogs at large. This way, you provide your customers with value that’s relevant to them but goes beyond what your company alone can offer them. All along, you want to show your customers that you understand and care about their needs. Also, it’ll help you grow your network to reach your partners’ customers, too.
Small team? We got you.
We build strategies that get noticed. Really. Give us 30 minutes.Let's Chat
No carbon copies, please
However, there is no point in marketing a loyalty program that is a carbon copy of a competitor and where your customers will gain no value. The loyalty plan must ultimately be engaging and worthwhile for customers to keep them coming back time and time again.
Reference your brand’s target personas. How do their behaviors suggest their needs? There is no point in starting a loyalty program based on a high subscription rate, for instance, if you are targeting customers who chase discounted pricing.
Once you have constructed a suitable scheme, market it so that it grows.
- Build and optimize a landing page to persuade first-time website visitors to join the loyalty program.
- Your website should then be further optimized to link to a sales page promoting the loyalty program and detailing all the necessary information.
- Referral incentives from participants are an excellent way to make use of word-of-mouth.
- Similarly, promotional emails offering savings or other enticing tidbits are a good way to spread the word. Such emails may fare better with the inclusion of video, which sees a 5x higher open rate.
Return customers build business. Focus on keeping and engaging them and strategize around how to serve them better, and you will have an established route to reliable success.