As a retailer, you know that your store's loyalty rewards program won't be successful unless customers have joined and members are actively taking advantage of the deals you're offering exclusively through membership. A properly designed rewards program generates revenue because members are continually shopping, earning rewards points, and then spending those points by shopping more.
Sounds great, and it is. But if your loyalty rewards program has little-to-no members or if the members you have aren't active, then you technically haven't gotten your loyalty program off of the ground yet.
Enrolling new members must be at the top of any loyalty program and therefore should be considered priority number one if you're a retailer, whether you've recently launched a rewards program or you've implemented one years ago that's still struggling to positively impact your bottom-line.
Loyalty programs are meant to increase customer retention, which in turn increases the lifetime value of your customers. In this article, we'll walk you through effective marketing tactics that will give you the highest possible chances of converting your customers into loyalty program members who actively shop with you and trend towards continually spending more every time they come into your retail store.
There are two phases a customer must be guided through in order for them to become an active loyalty program member.
The goal of the first phase is "onboarding", or converting a customer into an enrolled rewards program member. And the goal of the second phase is "exclusivity", which admittedly is an impossible metric to assess. However, you can think of this second phase as securing a greater and greater portion of your members' "wallets", so that your members are ever-increasing their spending threshold at your store, choosing you over the competition, more and more, until they only shop with you… exclusively.
For the sake of keeping this article simple, let's refer to the second phase as "increasing loyalty".
Convincing your store customers to sign up for your loyalty rewards program isn't as easy as it sounds if you keep the goal of phase two in mind right from the start. You want active members, not eye-rolling shoppers who will sign-up just to get you to shut up. Any retailer who has a rewards program where 80% of the members are inactive knows what we're talking about. Sadly, this describes most rewards programs. In the long run, this will do you absolutely no good. So how can you, as a retailer, avoid this and instead make a strong first impression?
Onboarding Strategy #1: Create Enthusiasm
Create enthusiasm from the start by offering rewards, incentives, or even some freebies straight out of the gate when customers sign up.
These incentives can be in-store or in-app, if your loyalty rewards program comes with a mobile app. You can offer free samples, coupons, second-product-free deals, select services free deals, or anything you can think of. You get the point. By straightforwardly "giving away" a product, sample, or service that's of value to the customer will create a lasting positive impression, and most importantly, it will convert the customer into a loyalty member and push them out of phase one and into phase two.
You can also offer bonus rewards points as a loyalty program sign-up incentive, but if you opt for this strategy, you'll have to pay close attention to the results. For example, once you sign up members with automatic bonus points allocated to their account, how long does it take them to return to your store to redeem those points while making their next purchase? Do they redeem? Have you even seen them again at your store? Did their points expire because they forgot they actually signed up for your program in the first place?
If these sound like harsh, glass-half-empty questions, trust us, the reality could be even more dismal if you don't keep a close watch on the success rate of this signup incentive strategy. Remember, the goal is to push every customer all the way through to phase two, i.e. ever-increasing loyalty that eventually resembles shopping at your store exclusively.
Onboarding Strategy #2: Use In-Store Signage
Your customers, whether they walk into your store or arrive at your website, won't know that there is a customer loyalty rewards program in place at your store or that they can join and start saving, unless you make them aware of it.
You probably don't need much convincing to agree that in-store signage, especially digital signage, is an effective communication method and yields a higher success rate than even your sales personnel telling customers anything. There's a reason for this and it's a good one. At any given time, your store likely has more sales and deals going on than any one employee can verbalize easily. In fact, each aisle could have its own set of promotions happening, and that's a great thing.
Even if your loyalty rewards program is straightforward and can be explained in a sentence, expecting your staff to convey the benefits of joining to each customer that approaches the checkout register is frankly too high an expectation, because the "benefits"--unlike the program itself--could be myriad, complex, and require a bit more explanation.
In-store signage can get the point across and clearly communicate the benefits and incentives of your loyalty program, and if you have digital signage, you can design and display attention-grabbing promotions that are informative, interactive, and successful at interesting your customers to sign up. Then, once they reach the register, they'll already be primed to enroll.
Onboarding Strategy #3: Promote With Digital Marketing
Your reach in the online sphere is potentially infinite, which means that if you aren't using digital marketing to promote your customer loyalty rewards program, you are greatly missing out.
There are numerous customer communication channels at your disposal, whether at this point in time you happen to be taking advantage of them or not. To be perfectly blunt, you should be taking advantage of all of them right now, and they include maintaining a website, regularly posting on the most prominent social media platforms (i.e. Facebook, Instagram, Twitter, LinkedIn, and dare we suggest TikTok), issuing digital newsletters, and keeping actively engaged with the customer reviews that pop up on the major review sites like Yelp, Google, and even TripAdvisor.
If you're keeping up with these digital channels to communicate with your customers, then it shouldn't be too difficult to also promote your customer loyalty rewards program via these channels, as well, and offer an immediate way for customers to sign up right then and there digitally.
As you grow your digital footprint online, acquire "followers", and stay engaged, you can also use your social media platforms, website and corresponding blog, and review sites to share the highlights of your loyalty program. For example, if a loyalty member reaches a VIP tier, you can share social media posts about it, tag the member, link the reward gift they received to the same product in your digital catalog to drive web traffic. There's really no end to what you can do when you bring promoting your loyalty program into the digital space.
If you follow our onboarding guidelines and enroll new members into your customer loyalty rewards program in the ways we recommended, then your new members will be starting out with a high degree of enthusiasm for your program. You might have given them a valuable product, service, or other incentive to reward them for merely signing up. Perhaps you've tailored your program to award them with a hefty amount of points within their first month just to keep them engaged, returning, and spending. No matter how you've attracted them, the fact of the matter is that it's not enough that they're enrolled. You must keep them engaged and keep engagement high, but how?
Increase Loyalty, Strategy #1: Have A Good Reward Mix
Rewards points, when redeemed, ultimately have a cash value in the sense that they provide a discount or reduced price on either select items or a customer's total at the checkout. But cash rewards such as these aren't the only rewards you could be offering to your loyalty members. Non-cash rewards could come in the form of a tangible item, such as a free product, or a free service. The latter provides the member with a rewarding experience, and these days, customers have proven to value experiences that they can cherish, and they value them even more than free items. Try to mix in both types of rewards, and don't overlook the benefits of also having a "swag shop" attached to your loyalty rewards program. For more on the purpose and benefits of implementing a swag shop as part of your program, check out our article What Is The Swag Shop.
Increase Loyalty, Strategy #2: Create Multiple Ways to Earn Points
Creating different ways to earn rewards points will keep your program fresh and fun for your customers. It will also increase engagement by providing different avenues of rewardable interactions. The more ways that loyalty members engage, the more chances they have to earn points. While the greatest points-earner will likely remain making purchases, you can also compliment this by adding bonus points campaigns on items and services you're featuring. When you think about creating additional ways for customers to earn points, you really want to be thinking about the various types of reward systems you can implement, such as tiered rewards, gamified rewards, and VIP-only rewards, to name a few, and get as many up-and-running as you can manage. Doing so will diversify your program and depending on which types of customers engage with which reward systems, you can begin to compile customer data, demographics, and vital information about your sales campaigns and strategies, which can help you tailor even more successful campaigns in the future. For more on rewards systems, our article Different Types of Loyalty Programs offers a detailed look, and if you'd like to gamify your loyalty program, be sure to read How To Gamify Your Loyalty Program.
Increase Loyalty, Strategy #3: Remind Inactive Members
Let's face it. A retailer like yourself can do everything right and still wind up with loyalty members that have fallen off the face of the Earth. It happens. But what shouldn't happen is for you to shrug and let them disappear. Sometimes customers need to be reminded that they are enrolled in a great loyalty program that is designed to save them money so long as they stay engaged. Sending out reminder emails, SMS texts, and in-app push notifications are great ways to gently remind your less engaged members what they're missing out on. You can even offer them some kind of reward for coming back and shopping with you again. The point here is, don't give up. It will take less time, money, and energy in the long run to revitalize an inactive member than it would to acquire a new one.
If you're interested in gaining in-depth pointers on how to structure a successful loyalty program, be sure to read our article 8 Tips For Creating A Successful Loyalty Program in 2020.
This article was written by Loyal-n-Save, an omni-channel customer loyalty solution for retailers looking to increase customer retention and new customer acquisition.