5 tips to devise the best customer loyalty programs
In present days, the average attention time of people is eight second. There is so much of competition that people can’t concentrate on a thing for long. Thus, customer loyalty programs can be a life-saver for your product(s). In fact, your existing customers spend more than the newcomers, 67% more.
A happy and loyal customer will also bring in more people for your business. Well, I do. OK, this one-off incident happened two years ago. I pre-ordered a book online which was available at an introductory (discounted) price. All was well, the book launched and dispatched but they couldn’t deliver it (quoted one of the many reasons). I registered a complaint.
By that time, the book which I ordered at ₹200 was listed at ₹275+shipping. I would have just left it. But the support executive asked me to order it again, and they will reimburse the extra amount. And they did. There was no loyalty program in effect; only a business and a returning customer, who still transacts with them.
“If people believe they share values with a company, they will stay loyal to the brand.”
— Howard Schultz
According to the Forrester research, 41% of the online revenue comes from the repeat customers in the US. People who sign up for customer loyalty programs are less price sensitive. If they found the first purchase (or service) good, they will return and give you a better business this time.
Many things go side-by-side to get you a loyal customer — customer experience, customer satisfaction, and not to forget providing value. Customer loyalty programs can aid you in the process.
“You’ve got to start with the customer experience and work back toward the technology, not the other way around.”
— Steve Jobs
Repeat customers lower your marketing expenses. They act as word-of-mouth advertisers, bringing in more people. It’s your job now, to make them loyal and sign them up for your brand’s rewards program and here are five tips to achieve the same –
Offer them an app
Everyone — well, almost everyone — has a mobile in hand. So, it sounds about right to give them a mobile experience along with the perks of your loyalty program. The data from the Colloquy Loyalty Census shows that a person in the US is enrolled in 18 customer loyalty programs (average) but is active only in 8.4. So, not all brands who invest in loyalty programs are successful in retaining 100% of their customers.
A mobile app though can help a person to keep track of their points and also, keep them updated on the offers.
You have a better chance of a sale with an app instead of a link through email.
Moreover, apps offer easy-to-use process for order placement.
Here, I would take the example of Starbucks. Their app not only shows your points in detail but also lets you escape the queue by ordering ahead. Again, instead of fumbling with a person to get your favourite pizza over the phone, apps with detailed menu are a preference for many.
Get them to pay extra
Oh! You can’t say that give us ₹500; we are giving you a membership card. Offer them some value for the money, and they will keep returning for more. But first, provide them with a valuable service.
A happy customer will buy more the next time they do business with you. And to make them do it sooner, attract them to your loyalty program with extras. The best example of this model would be Amazon Prime. At ₹999 a year, they give you a priority service — free shipping and early access to deals. And you also get to enjoy the video and music streaming services.
Did they go bankrupt? No. Since the person paid to get the benefits, they return more often to do business with Amazon. But only if they’re satisfied with their service.
Customers remember the experience more than the discounts offered.
Another measure a business can undertake is to provide more benefits when you cross a certain spending limit — tiered customer loyalty programs.
Going to talk about it next.
Divide them into tiers
The tiered loyalty programs are made in a way to give more benefits to the returning customers and also, the company. You can offer more benefits to those who buy or use your services more than others. These tiered customer loyalty programs can be designed either on the points basis or a certain amount of purchase.
Things, like spending ₹10,000 in a month and become a Gold member or accumulate 1000 points to upgrade your membership level, are the examples. And why would someone want to upgrade? Because it includes some free access to services or gifts with each service. It may also include privileges or exclusive deals for members at those levels.
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
— Warren Buffett
Talking about privileges, Titan Encircle Platinum Tier membership offers 30 points per ₹1000 spent on accessories instead of only 10 in the Silver Tier. These points can then be used to get discounts and the members also get additional offers. And how to get the Platinum Tier membership? Spend ₹20,000 (only) in a day.
Starbucks’ Gold Level members, for example, get a reward after every 125 stars and free refills among other benefits like birthday rewards. And they also get a personalised Gold card.
Who doesn’t like some love?
It’s not (only) about rewards
Yes, sometimes, customer loyalty programs are not about rewards. Gifts and priority services are no good if your products and services aren’t valuable to the customer. First, make customers a priority, and you already gain a loyal one without enrolling them in reward programs.
Not your office, but the customer is the centre of your business.
Offer matching products and recommendations, and they will buy it even if they are priced without discounts. People love getting a little help here and there.
And then comes the service, an exceptional service. 74% of millennials would switch to a different retailer if they had poor customer service, states an ICSC survey.
Let’s consider Amazon Prime again. They have a strong customer base. Why? Because of the quality of the products and services they provide. If they didn’t, no one would pay ₹999 to become a Prime member of Amazon; no matter what benefits you throw towards them.
“Courteous treatment will make a customer a walking advertisement.”
— James Cash Penney
Keep it simple
And the best customer loyalty programs are the best because they don’t burden their customers with too many rules — the terms and conditions.
53% of Americans participate in a loyalty program because of ease of use, shows the Colloquy Loyalty Census.
You don’t want to refer new customers to check the program terms as to why they can’t use their points. Make it simple for them, at least in the beginning.
No one would like to spend ₹50,000 to earn 500 points which are worth ₹50. And when they try to spend that treasure (₹50), a popup says you need minimum 5,000 points to redeem. Confused?
Well, that’s why I said to keep reward programs simple. Fewer the rules and restrictions, more “loyal customers” you will get.
Those were the five tips for the best customer loyalty programs. Yes, loyalty programs can be of significant help in increasing your profits and cutting the costs. And once you have got loyal customers, the perks offered by loyalty programs will make them feel more special.
Get your team trained, cultivate the relationship and give your customers the best service experience they can have.
“If you don’t care, your customer never will.”
— Marlene Blaszczyk
