What is loyalty program marketing?
Loyalty marketing is a form of marketing that incentivizes customers to make repeat purchases with a particular company. These programs typically offer customers rewards in return for their recurring spending with a company, such as cashback, rewards points, or exclusive members-only incentives.
The Ultimate Guide to Loyalty Program Marketing To Win Customers
What is loyalty program marketing?
Loyalty program marketing is a tool marketers use to motivate customers to buy more products and services from a company. This strategy is used by several companies, including credit card companies, airlines, and retail stores. In some cases, these programs are free for customers to participate in. Credit card providers offer cashback and rewards points every time loyal customer uses their cards. Airlines have frequent flyer programs that incentivize customers by giving loyalty points and bonuses every time customers use their airline. Typically, retail stores provide gifts, discounts, special offers, and loyalty bonuses to their customers.
One of the most important aspects of marketing is loyalty programs. A loyalty program is a way for customers to show their appreciation for your business. A business can offer anything, from discounts to points that can be redeemed for prizes, with each purchase. But what is the difference between customer loyalty programs and marketing loyalty programs? This article will explore the difference between customer loyalty programs and marketing loyalty programs.
Customers can join a loyalty program by registering their personal information, including name, email address, phone number, etc., through a mobile app or company website. After signing up for loyalty programs, customers can start accumulating points when they purchase products and services. Then, the customers can redeem these points as cash backs, gift cards, discounts, and offers.
How can you encourage customer loyalty? Customer loyalty is a bond between customers and brands. When customers frequently visit and purchase from one brand, it leads to a strong relationship between customers and the brand. Loyal customers are an asset to any brand. Customer Loyalty is an ongoing emotional bond between brands and customers. Repeat customers are likely to generate more revenue for a brand than acquiring new ones. A good loyalty marketing strategy is to retain loyal customers to encourage repeat business and increase revenues. Loyalty programs work when a brand rewards customers by giving loyalty program points for every purchase. Customers can redeem these points when they buy again in-store or online.
Here are a few of the best loyalty program marketing case studies-
Sephora Beauty Insider is a points-based loyalty program where customers need to swipe their reward cards at every purchase, allowing the brand to track the money customers spend. Then they are grouped into three tiers that identify the top spenders who are rewarded accordingly. Customers earn points with every dollar spent that can be redeemed for Sephora beauty products.
Another example is the Amazon Prime rewards program, where loyalty members get free shipping and earn 5% cash back at Amazon and Whole Foods for a nominal annual fee. Amazon Prime is a paid loyalty program, where loyalty program customers pay either a one-time membership fee or a recurring subscription. Customers earn rewards points for every penny spent that can be also be redeemed for travel and gift cards.
The benefits of loyalty program marketing
Loyalty programs are a great way to build a customer base and build a community around your brand. They also help you better understand your customers, which in turn helps you to serve them better. Here let's discuss the benefits of marketing your company with rewards programs and how to get started.
Loyalty marketing is a great way to maintain a relationship with customers
Meet Ziployalty, your trusted marketing partner
Enhance Customer Engagement
Customer engagement is a major aspect of a successful business in the long term. Building a strong connection with its customers is necessary for a brand to sustain and create a positive image. Small businesses can utilize email marketing to inform customers about their loyalty programs, new offers and discounts, and products and services to build their brand loyalty. Restaurant Loyalty program marketing involves engaging customers through free drinks, food, and merchandise when customers sign up for their loyalty programs.
Strengthen brand loyalty
Brands can strengthen their relationship with customers by giving incentives, rewards, and gifts to loyal customers. This will help in boosting customer satisfaction and brand loyalty as a result. When brands consistently retain existing customers through a robust loyalty program, it builds a positive long-term customer-brand relation, further strengthening its brand loyalty.
Note-: Building a strong connection with its customers is necessary for a brand to sustain and create a positive image.
Improved Customer Retention
Brands can improve their customer retention rate by retaining customers over time. According to studies, attracting new customers is up to 25 times more expensive than retaining loyal customers. It is more profitable and easier to retain existing customers than to acquire new ones. Typically, retained customers spend more at the stores compared to new ones. Repeat customers become a natural way to advertize your brand as they are likey spread word-of-mouth referrals to their family and friends.
Loyalty marketing is a great way to reward customers for their business
Meet Ziployalty, your loyalty marketing partner
Better Customer Lifetime Value
Loyalty program marketing works for companies and customers alike. When a brand retains existing customers for some time, they attribute to its net profit. It is a two-way relation between brands and customers--while rewards program members earn points and get free loyalty rewards like gifts, discounts, and offers, brands build their position and a robust customer base. You can evaluate customer lifetime value by understanding customer experience and measuring customer feedback at key touchpoints.
How to implement loyalty program marketing?
To keep an engaged customer base, many companies are implementing loyalty programs. These programs are designed to reward customers with points or rewards for each purchase. How does this help your company? A loyalty program can increase the frequency of visits, improve customer retention rates, and often generate more revenue.
Retailers can create an in-house loyalty program, outsource it to a marketing agency, or engage a third-party loyalty program provider. One way to implement loyalty marketing is through tools available in point-of-sale systems. Many POS systems come with an in-built CRM functionality that allows brands to collect and store customer data and analyze customer behavior, customer acquisitions, purchase habits, loyalty points earned and used by customers, etc. You can use financial services providers or third-party providers to analyze customer data to create the right loyalty program for your brand that can not only boost your revenues but build a positive brand image in the long run. The right loyalty programs help you grow your business.
Here are some of the loyalty program marketing strategies you can imply to strengthen your customer base-
Give free perks and gifts
Brands can attract new customers and retain existing ones by providing great services and value for their goods. Another way is implementing a Customer Loyalty program marketing tactics like giving gifts and extra perks that will encourage customers to continue to do business with you. When brands provide additional benefits and outstanding services consistently, customers feel loyal to the brand. Once customers invest their time and money in a brand and receive gifts and perks in return, along with good service, they are more likely to become loyal customers.
Do You Know-: Many POS systems come with an in-built CRM functionality that allows brands to collect and store customer data and analyze customer behavior, customer acquisitions, purchase habits, loyalty points earned and used by customers, etc.
Give discounts or cashback
Customers appreciate brands that let them save money through discounts and cashback. Make sure that you study customer behavior before implementing a loyalty program. A good Loyalty Marketing program will allow you to retain customers and increase your customer base. You can provide attractive discounts and cash backs every time a customer comes back and buys your goods and services. Another way is by giving discount coupons to loyalty program customers for future visits, ensuring that the customers return for the next purchase. Brands can provide discounts for a limited time and special events like birthdays, Christmas, etc. You can encourage and thank your customers for their current business through coupons and giving loyalty cards.
Provide membership programs
Membership programs are paid loyalty programs where customers want to pay brands to get additional services. For example, Amazon Prime, where customers pay an annual fee of $119 to get perks like free shipping, movie downloads, and additional discounts, etc.
Give special discount for referrals
When you consistently exceed customer expectations, you cultivate loyal customers who return to your brand and spread word-of-mouth to their friends and family. You can give a special referral discount to customers for doing this. Give your customers a percentage discount on the number of their referrals who turn into your customers. Plus, you can give discounts to new referrals on signing up for your loyalty program.
Get customer reviews and feedbacks
You can ask customers to post feedback and reviews on your products and services on social media platforms. Collecting reviews and feedbacks is one of the best loyalty marketing strategies as several new customers look for customer feedbacks before they buy your product and services. Positive reviews will strengthen your brand image and attract new customers. You can show you value your customer relationships. You can reward customers who post good reviews about your products and respond to customers who might disagree with you. Make sure to ask customers to post a review after you have provided a solution to their queries. This will also help you have a positive impact on your future customers. Brands can offer customer service to provide solutions to customer queries, boosting customer satisfaction and repeat visits as a result.
Tell about your loyalty program
Once you have created a loyalty program, customers should know about it to sign up for it. Make sure to promote your loyalty programs through in-store displays, on social media platforms, and by sending regular emails and texts to your customers. You can collect customer data that includes customer phone numbers, email addresses, physical addresses, etc., to send information related to your loyalty program. Give incentives to your customers on sign-up, send coupons, birthday offers, exclusive discount cards, thank you discounts, etc., to your loyal customers to make them feel valued.