Tips for setting up and marketing your loyalty program

We’ve seen a huge variety of successful loyalty programs in the previous post that operate across a broad range of industries. Regardless of what your product or service is, successful programs all have one thing in common – they put the customer at the heart of their mission and the marketing around the loyalty program is cleverly planned.

Whether your store is small or large, we understand that no business decision should be taken lightly – and that includes investing in customer loyalty. Knowing whether it’s the right time to invest in a loyalty program is an important step. Read through the following post to help you decide whether it’s time to take the leap into loyalty. We’ll cover:

Here are four signs that it might be time to get started:

#1: Repeat purchase rates are stagnant or declining

One of the most effective ways to drive revenue from existing customers is to increase the number of times they return to your store and purchase again.

If repeat purchase rates are declining and the revenue from your existing customers

is not comfortably covering the cost of acquiring new customers, then it’s time to focus on retention.

Loyalty programs are proven to increase purchase frequency, with customers who join and redeem a reward being 68% more likely to purchase a second time than those who don’t.

81% of consumers agree that loyalty programs make them more likely to continue doing business with a brand.

Sign #2: Many of your customers are “at-risk”

The chances are that a reasonable number of your customers could be considered “at-risk” – i.e. they haven’t returned to your store to make a second purchase within an expected timeframe. If that number keeps increasing, then it’s time to identify and re-engage “at-risk” customers. This can be done by sending loyalty newsletters that showcase what offers and points the customer can redeem.

Sign #3: Checking you out, not checking out

If you’re finding that you have a high number of browsers compared to buyers, it could be time to improve the quality of traffic coming to your store.

Loyalty programs encourage satisfied customers to act as advocates, referring your brand to friends and family. Customers acquired through referrals are not only better qualified, but they also tend to spend 200% more than the average customer.

Sign #4: You’re caught in a race to the bottom

It’s no surprise that 88% of consumers pre-research before buying online. However, this doesn’t mean that they’re just comparing products. Today’s consumers compare prices more than ever before, leaving more and more retailers caught in a race to the bottom. Additionally, retailers are being forced to participate in discount days to keep up with their competitors.
Pillar Pages Ctas

If you’ve read through the list of signs and you’re thinking “yep” to each one, it’s time to get started with a loyalty program. Your loyalty program should have four main goals:

  1. To provide your customers with tangible benefits and value
  2. To encourage other customers to become loyal
  3. To increase your long-term profit
  4. To use your loyalty program as a tool to gather more data on your customers and spending habits

Furthermore, you need to decide who will own your loyalty program to ensure it runs smoothly and that you reap the most benefits.

The loyalty programs which run the most effectively split responsibility between marketing, customer service, dispatch, stock control and operations. Integrating loyalty into your company culture is important for efficiency.


Types of loyalty programs

We’ve seen many examples of successful loyalty programs above, but you need to decide the best loyalty program for your own, unique business.

Loyalty programs can reward transactional behaviours with a model that rewards points per dollar spent or they can reward non-transactional behaviours such as referrals and broader engagement with the brand.

To get the most benefit and appeal to all types of customer, we recommend rewarding a mixture of the two behaviours. A few more examples of non-transactional behaviour that you can reward points for are as follows:

  • Site visits – for either individual visits or when a customer returns a certain number of times
  • Account creation – when a customer registers, instantly give them points they can use in their next transaction
  • Referrals – this could be if the customer simply makes a referral or when the referred customer joins the program
  • Reviews – encouraging reviews can help you gather the social proof that will validate your brand over the competition
  • Social shares and follows – this shows customers that you are paying attention to them, encouraging them to continue acting as advocates on your behalf
  • Newsletter signups – this keeps the lines of communication open and ensures that customers are receiving your content, special offers and news.

Lucy And Yak Program
In the next section, we’re going to dive into how you can create and manage your own loyalty program.


Checklist for creating a successful loyalty program

75% of companies see a return on investment (ROI) from their loyalty program. Putting together an attractive loyalty proposition can seem daunting, but it is worth the time and resource invested. You don’t need a maths degree or be an expert in data to create something simple but effective to help differentiate your brand.

There are five key decisions you need to make when setting up your loyalty program.

✅ What activities will you reward?

There are countless ways to entice customers with rewards, but it might be best to stick with simple and easy-to-execute rewards to begin. Think about the obvious rewards to begin with such as points for purchases, site visits or account creation. Once you are more established you can add rewards for referrals and product reviews. This also gives you the opportunity to continue marketing your loyalty program with new, fresh and exciting offers and information.

✅ What value will you give your points?

Don’t get too hung up on how to structure your points system. Instead, make sure the strategy is motivating for your customers and that they can easily move up your points ladder. There’s nothing more demotivating than not having enough points to redeem a reward!

For example, if you set a rule to award ten points for every pound spent, customers will gain 1,000 points for a total spend of £100. You might set the exchange value of 1,000 points for a £10 reward, ensuring that it doesn’t take too long for customers to feel they are getting something in return for their loyalty.

The best practice is to test it out and see what works.

If something doesn’t work, try altering the value of your points over time. Just make sure it doesn’t negatively impact existing rewards and that you communicate the changes to the customer and why it will benefit them.

✅ What identity should you give your program?

Think carefully about how you want your loyalty program to look and feel as it’s best to get this right from the outset. It should complement your main branding, but also stand alone with a separate identity and name so that shoppers can easily understand what it is.

Your loyalty program might have a similar look and feel to your brand, but giving it a unique and memorable name will help ensure that it stands out to your customers. Over time, you might extend this approach to naming into other elements of your program, such as a name for the points you award or for the tiers you build into your program.
Waterdrop loyalty program

✅ What emails should you send as part of your program?

Loyalty emails should increase engagement with your program by demonstrating the value that being a member can add for a customer. Loyalty emails tend to see higher than average open rates of around 35% because they are personalised to each member.

For example, a welcome email gives you the chance to make a customer feel valued and to remind them as to why your brand values resonate with their own.

A points statement email lets them know that they are gaining from being part of your program and encourages them to return and spend to keep building their balance.

To get the most engagement from your loyalty emails and avoid annoying members from the start, create an email strategy that complements your existing approach to campaigns and communications. Getting this right from the day you launch will ensure your customers feel valued and engaged, rather than spammed.

✅ What does success look like for my store?

The most important part of launching your loyalty program is determining the impact that it’s having on your bottom line. There are many different metrics that can help you do this, and making sure you are measuring these from the very start is key to demonstrating the success of your program.

To truly demonstrate the ROI of your loyalty program, you need to be able to identify the lifetime value of your customers and have the ability to report whether it is higher for program members than non-program members. To do this effectively, you will also need to be able to track repeat purchase rates and average order values.


Loyalty marketing examples

It’s all very well to launch a loyalty program, but if no one knows you have one, it doesn’t do much good! Double down on your marketing efforts to spread the word about how your customers can benefit.

Email

Email communication is easy, at your fingertips and a highly effective way to engage your shoppers. Research shows that 74% of customers prefer to receive commercial communications via email and 91% of consumers check their inbox daily. Ignoring such an accessible form of marketing would be a huge oversight in any marketing strategy.

There are three main types of email you can send to communicate with your customer:

  • Direct – such as welcome messages, reward notification emails, monthly points statements, resources or special offers. Make sure these emails are relevant and personalised to your customers’ buying behaviours
  • Transactional – These are the result of specific actions and give you a reason to reach out to your customers. Post-purchase emails are a great example of this and offer an opportunity for you to give customers incentives to make another purchase, or leave a positive review and make a referral
  • Reactivation – These bring back customers who have stopped shopping with you. 89% of merchants claim that re-engaging with customers via email is effective so this should be a key part of your approach to engagement

It might be easy to think that email marketing is dead – but it’s quite the opposite. Email generates approximately £29 billion in retail sales annually. In addition, 86% of consumers want to receive promotional emails from companies on a regular basis, at least monthly.

Here are a few excellent examples of how some ecommerce stores are using their email communications to market their loyalty programs.

Beauty Bakerie

Beauty Bakerie run three loyalty email campaigns: point-expiry emails, monthly reward reminders and reward available reminders.

By sending these reminders to their customers’ inboxes they encourage them to return to their site, not allowing them to become at-risk or churned.

Displaying outstanding points balances and the products the customers could be purchasing

with their rewards, Beauty Bakerie emails make customers feel like they’re missing out if they don’t return.

Beauty Bakerie 3 Copy

Terry’s Fabrics

Terry’s Fabrics run regular exclusive double point events to surprise and delight their customers. These promotions are included in emails to remind existing customers of their loyalty program and entice them to return and spend again, sooner. The time-limited nature of the promotion creates urgency and encourages in-the-moment purchases.

Terry's Fabrics
It’s all very well to have an email strategy and to fire off regular communication, but you need to ensure that the communication is on-brand, clear and effective. Head over to the LoyaltyLion Academy to learn some tricks for writing effective loyalty emails.

Academy Cta 2

Social Media

Not only should you be promoting your loyalty program through emails and your website, but tap into the huge audiences available on social media too.

Be sure to communicate your loyalty program and its key benefits on Facebook, Instagram and Twitter, depending on which channel best suits your business needs. Not only will you reach new potential customers, but you may also find that key industry influencers become aware of and join your program, promoting it to their larger audiences in turn.

You could also interview members of your program and use their testimonials as material for your social media posts, ensuring that non-members hear the benefits straight from a member as a form of social proof.

Finally, don’t just post about your products and sales but use user-generated content such as product and store reviews generated via your loyalty program to drive social media content.

Astrid And Miyu Social Post
We have recently added a new Instagram feature to LoyaltyLion where customers can earn loyalty points by posting a picture and your hashtag on Instagram. This is a great way to build brand awareness, customer trust and acquisition!

Pop-ups

Utilise pop up boxes on your website to display information about your loyalty program when the customer lands on your site.

These prompts can cover a range of topics, including the immediate benefits of your program such as “Earn 100 points for signing up”. You could also lead with promotions such as double points sales or seasonal campaigns, centring the messaging around a sense of urgency.

Baseballism Popup


 

Conclusion

When you have considered all of the above points about the various types of loyalty programs, best practices and marketing and you’re mind is made up, you’ll be ready to set the wheels in motion and get started.

Book a consultation with one of our loyalty specialists to find out more. Or, check out our free ebook all about getting started:
Pillar Pages Ctas

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