Increasing revenue starts with securing customer loyalty. As a retailer, the strongest tool in your marketing toolkit is your store's customer loyalty rewards program. A solid rewards program focuses on targeting segmented customer groups with irresistible incentives and helps you monitor each campaign's success. The benchmark for success is increased spending. But what if your targeted campaigns aren't generating additional sales?
Tired, boring, lackluster rewards programs are a dime a dozen, and worse, they're everywhere. If you've ever had to remind a sales clerk to scan your rewards card at a checkout counter, then you've experienced a taste of what we're talking about. If the sales staff isn't promoting the program, or even mentioning it, then how much value can it really have for either party?
Sadly, a lot of rewards programs fail to provide that much value, because rewards campaigns aren't effectively marketed to members and therefore those members aren't taking advantage of the offered sales incentives.
The failure, however, doesn't lie within the customer loyalty rewards program, but rather in its execution and the outmoded technology responsible for delivering it.
It will always cost less to motivate existing customers to patronize your business than it will to attract brand-new customers and get them shopping. A customer loyalty rewards program will always be your strongest marketing tool, as we mentioned. So, how can you utilize your rewards program to maximize sales?
Getting creative and shaking things up with innovative loyalty rewards ideas that go beyond points, tiers, email newsletters, and plastic scan cards is the direction you'll want to head towards, and this article will show you how.
TECHNOLOGY IS EVERYTHING
Plastic scan cards and email sales campaigns aren't obsolete… yet, but eventually they will be. While they haven't officially reached their inevitable expiration date, plastic scan cards and email sales campaigns do not represent the latest technologies. Today's modern consumer lives life within their cell phone or mobile device. Apps are where it's at. Customers can now pay at the register without a debit card, credit card, check, or cash--they simply tap their cell phone against the store's credit card processing device. Yes, your customer loyalty rewards program must stay ahead of the technology curve no matter how small your business.
If you're a business owner currently shopping around for a customer loyalty rewards program to implement at your retail store, educational organization, professional office, or healthcare facility, then you would be wise to immediately rule out any loyalty program that does not come with an app. If you already have a program in place but it uses antiquated email communication technology, we strongly recommend that you consider looking into white label services that can license you an app for your loyalty program. Our recent article, What Is White Labeling And Does Your Loyalty Program Need It? defines white labeling and how using a white label app for your loyalty program can greatly increase customer interaction, engagement, and sales.
By integrating and utilizing the latest technologies as part of your customer loyalty rewards program, you will retain all of the benefits of a standard program while amplifying ROI. Right now, the average email campaign open rate is as low as 15%. The click-through rate is considered good if it's around 2.5%. And the click-to-open rate should be between 20%-30%. Those percentages should concern you, especially that only 15% of your newsletter emails regarding sales, discounts, giveaways, and incentives are actually opened.
How does that compare to the open-rate of app push notifications? In 2020 alone, the direct open rates for notifications rose to 60% across all industries, according to Mobile Marketer. The difference is astronomical, but is it really any surprise? Who hasn't opened the Promotions tab of their Gmail account, been met with a wall of spammy email campaign newsletters, and deleted most of them outright without even reading the subject line? The experience of receiving a push notification on your mobile device is much better and often includes a tingly zing of excitement. Because these app notifications, when opened, can convey concise promotional information that's short, sweet, to the point, and visually appealing, consumers are more likely to act on the incentive, too.
A loyalty program app is an enhancement of, not a replacement for, a standard program that comes with plastic scan cards and email campaign newsletter capabilities, which means that it will also enable you to initiate promotional campaigns such as:
- Free product and service giveaways, sweepstakes drawings, & BOGO deals
- New product and service trials in exchange for points & positive online reviews
- Preferential service terms for high spenders
- Referral rewards points incentives, including social media sharing, tagging, and hashtagging
FIND THE COMMUNICATION SWEET SPOT
In order for your loyalty members to take notice of your marketing outreach efforts and respond receptively, you'll need to figure out the optimal frequency to contact them with your latest sales campaigns. This can be tricky business and there's no one-size-fits-all solution, but there is a correlation between outreach frequency and increased sales. For example, one survey found companies that sent one promotional email per month had an increase of roughly 7.5 orders per month, whereas companies that sent between 10 and 20 emails per month averaged an increase of 18.5 orders. That's a difference of over 250%, which is remarkable considering the low open rate of email promotions in general.
But what happens when you email your loyalty members too frequently? You run the risk of recipients either hitting the unsubscribe button or flagging the sender as spam. If you're sending out too many push notifications within your loyalty program app, the user can easily disable the notifications altogether. There's a difference between being proactive and pushy, and there's also a difference between exercising healthy persistence and being downright obnoxious.
So how can you strike a balance and find the communication frequency sweet spot? Focus on creating an engaging conversational experience rather than bombarding your loyalty members with sales campaigns. Shorten your targeted customer list segments so that you're running more diversified and personalized promotions. And closely monitor the open rate as well as the offer-to-sale ratio, which your loyalty program analytics should be constantly compiling. Let's take a look.
Your customer loyalty rewards program comes with a built-in opportunity to brand and market your business, which means that it has the potential to go beyond merely increasing your revenue. When your loyalty program is connected to your social media platforms and also comes with an app, the communication possibilities become endless. You can use these technologies to spark conversations online, across social platforms, and within the app itself. Rather than only contacting your loyalty members with new sales, deals, and discounts, try integrating short, sweet conversational campaigns with call-to-actions that will expand your digital footprint. For example, send out a push notification that offers a "one day deal" that will earn customers 30 points, rather than the usual 15, for buying a sandwich tomorrow. Or try a surprise and delight campaign that gives select loyalty members an additional 100 points just for being awesome, but those points must be redeemed by the end of the week. For every quick, friendly offer, include a "catch" that upon redemption, the customer must Tweet, share, or otherwise post on social media or an online review platform.
The more personalized your loyalty campaigns are, the more successful they will be. Certain customer types gravitate towards certain product lines and no two consumers are completely alike. While you may have success running seasonal campaigns or holiday-themed promotions that are extended to all of your loyalty members, it's far more effective to group your customers into segments and then target each segment with highly personalized offers. What this means is that your loyalty program needs to have the technological capabilities to collect as much customer information as possible upon sign-up and via the customer's purchasing history. Then, within the loyalty program software, you can create your segments, grouping customers into highly unique and specified types that take into account individual buying trends, favorite products and services, and other demographic information.
Finally, you must analyze both the customer and campaign data as you run your promotions, and make adjustments as you go, if you want to maximize ROI. For more on analyzing campaign data and targeting customer segments, we recommend you read our recent article, 8 Tips for Creating a Successful Loyalty Program in 2020.
CUSTOMER SERVICE INFLUENCES REPUTATION
When it comes to building a reputable brand, the customer service experience that your business provides to its customers plays a huge role. Customer service encompasses more than the complaint department of your company. In fact, "customer service" is a term that refers to the customer's entire interactive experience with your brand, from the moment the consumer discovers your brand to their very last purchase after a lifetime of loyalty. Every interaction with your business contributes to the customer's experience with your brand, and is therefore included in the customer service you're providing.
Those cumulative experiences must be positive. Decades ago, a dissatisfied customer would go to the customer service counter of a store, voice their complaint, and receive some degree of reconciliation. Nowadays, truly upset customers take their grievances to the internet, and oftentimes they do this even before they've given a business a chance to rectify the issue. Bad online reviews directly impact a business's reputation, and frankly, they can spread like wildfire. If you're a small business owner operating within a niche industry, one poor review can pull down the rest, and any prospective customer considering doing business with you could get turned off the moment they read another customer's complaint. We're so passionate about this topic that we dedicated our last article to the subject-- How Customer Service Impacts Your Loyalty Program.
When excellent customer service perks are integrated into the rewards you offer your loyalty members as part of your customer loyalty rewards program, many benefits result. Firstly, positive customer service experiences translate into expanding a positive brand reputation, especially when your happy customers post five-star and high-star reviews online about your business. Equally important is the increased probability that those same happy customers will also be all the more likely to boast about your brand on social media and interact with your brand online, telling their friends, family, and social circles about the products and services they enjoy.
You can take advantage of this tendency by enhancing the customer service experience that your loyalty members receive. How? By offering them additional customer service perks as rewards for their spending in the following ways:
- Offer free shipping
- Provide interest-free pay later opportunities
- Create VIP privileges
Remember, every positive customer service experience is an opportunity to strengthen the relationship between your loyalty member and your brand. There's no better time to ask a satisfied customer for a positive review than when you've made them happy, so integrate a system to solicit positive customer testimonials and reviews directly after your loyalty members have received special perks if you want to quickly rack up five-star reviews online.
Truth be told, we've only just scratched the surface in terms of how you can creatively reward your loyalty members for continuing to patronize your business. But be sure that the foundation of your rewards program is securely rooted in the most up-to-the-minute technology, that the frequency of your campaign communication efforts has been perfected, and that the customer service experience offered to your loyalty members is top-notch.
Once you master those foundational aspects, try rewarding your loyalty members for taking designated actions, such as:
- Signing up for your loyalty program
- Downloading your loyalty program app
- Posting, sharing, tagging, and hashtagging your business's handle on social media
- Leaving an online review
- Providing feedback by taking a survey
You can also build your brand and strengthen relationships with your customers by surprising and delighting your loyalty members with points for special occasions, including:
- Birthdays, anniversaries, and special milestones like high school and college graduations
- Donating to a charity your business supports
- Attending an event at your location
- To say thanks
We could go on and on, but instead of turning this blog post into a novel, we'll just invite you to subscribe so you'll be among the first to know about new branding and marketing strategies that you can implement to keep your rewards program a cut above the rest. If you would like personalized, hands-on help with your loyalty rewards program, our loyalty strategists can assist you with utilizing the latest Loyal~n~Save app technology and put you on the fast track to increase customer loyalty and boost sales.
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.