Enhancing your company’s brand experience, building loyalty, and retaining your customers are vital components of any thriving business. Research shows that increasing retention by 5% increases profits by up to 95%, with highly engaged and loyal customers spending 90% more often and 60% more per transaction. So if you can crack your loyalty marketing program, the financial benefits are significant.
However, how do you plan, develop, design, and implement an effective loyalty marketing program? Here we reveal our top ten checklist that ensures your loyalty marketing program success.
1. Identify your loyalty marketing program goals
The first step in creating or enhancing your loyalty marketing program is determining what you want to achieve. Next, you should consider your business goals and rank your objectives in order of importance.
Brand-strengthening and loyalty marketing activities might have the goal of:
- Completing more check-outs
- Increasing the average value of orders
- Improving shopping frequency
- Re-activating inactive customers
- Encouraging brand engagement
- Building loyalty through personalisation
- Rewarding your most valuable clients
- Moving beyond discounting your products or services
By identifying your goals and objectives, you can create a business case to ensure buy-in from all management levels, which is particularly important in large organisations.
2. Measure your success
It is all well and good saying this is what you want to achieve, but if your goals are not measurable, you will have no evidence to quantify success, failure, or effectiveness. Measuring success means determining your metrics and monitoring your numbers.
It is best to begin by determining where you are now, where you want to be, and the timeline for getting there. By setting a fixed period, of say, three months, you will be able to determine if your loyalty marketing program is gaining traction and worth investing in over the long term.
When you measure your success, you know your return on investment and can make informed decisions on scaling-up, scaling-down, or pivoting your loyalty marketing towards an alternative strategy.
3. Identify your audience
It is impractical and inadvisable to create a loyalty marketing program that targets your entire client base. Customer relationships exist at different stages of maturity, and your approach, communication, and rewards must reflect this. For instance, new clients might appreciate a discount, while established clients might value having their voice and opinion heard.
Your marketing strategy will get the best results if it focuses on one segment at a time. It is a case of identification followed by tailoring an approach to meet the business’s goals.
4. Determine your investment
The loyalty marketing budget is central to success but goes far beyond simply the cost of the reward or discount. When determining your investment, factor in the cost of development time and identify the predictable and unpredictable expenses.
5. Consider your technical capabilities
The technical challenge of implementing a loyalty marketing program can be significant. You could build a platform and test and trial it. Alternatively, you might save a considerable amount of effort and cost by leveraging off-the-peg loyalty marketing software.
Your choice of loyalty marketing platform will need to connect with your existing systems and database, automate marketing and reward management, offer smart loyalty logic, and integrate reporting against your goals and metrics. Your company’s technical IT expertise may be sufficient, or you may need the help of an IT systems agency.
6. Specify the customer actions that add value
There is more value in loyalty marketing than retaining a customer and encouraging repeat purchases. Your business will gain value if it promotes customer engagement, reviews, and referrals. You might want to reward actions such as reading newsletters or attending an event, which informs clients and helps them recognise why your organisation is the best choice.
7. Trigger emotion to create loyalty
If your loyalty marketing program solely focuses on gifts that hold little value for your customer, you run the risk that they will find a better deal elsewhere. Instead, your actions should aim to build loyalty through triggering emotions and encouraging clients to stay, even if a cheaper deal is available elsewhere.
A loyalty program can stir positive emotions by supporting a cause aligned with clients’ views and beliefs, encouraging engagement with gamification, or capturing data that enables communication personalisation.
8. Connect your loyalty system to your existing systems
To maximise effectiveness, your loyalty system needs to connect with your existing systems. For example, you might need the software to show reward points during online checkout or apply a POS discount in-store.
9. Create awareness
Customers that are members of loyalty reward programs spend more than non-members. So it is crucial to encourage enrolment across all customer touch-points. Having a loyalty program will not help you meet your business goals if customers are unaware of it. Your communication opportunities include social media, newsletters, website banners, in-store promotion, personalised emails, and inbound customer service calls.
10. Respond to your data
Your loyalty marketing program should not remain static. You need to observe, record, track and assess your data and evolve your strategies and approaches based on customer feedback and success metrics.