A loyalty and rewards program offers the opportunity to solidify existing relationships, initiate new ones and convert your one-time visitors, buyers and prospects into repeat business and long-term members. Implementing a successful loyalty program is all in the process.
For your program to fully capture your customer’s loyalty and convert this into revenue and profitability, keep in mind important elements that are critical to the success of a loyalty and rewards program:
Precision Targeting – Many Loyalty programs fail to precisely target and segment their customers, both in terms of demographics/interest and in rewards offers. Instead, they may offer “discounts”, which only erodes margin and does little to build actual loyalty.
An effective Loyalty solution will offer:
– Precise segmentation capabilities of customers, including ability for customers to voluntarily “opt in” to various groups/clubs
– Precision offers, communication and rewards, targeted at customer interests.
Sanity Test. The goal of your program should be clear. Customers need to understand what’s expected from them and how they can benefit. In other words, there can be no “smoke and mirrors.” The program must be simple and easily understandable. You (and your employees in the field) need to be able to explain the ins and outs of your program to your customers in a way that is easily understood.
Value, Value and More Value. The rewards offered to your customer base must have a perceived value. Rewards offered to your customer base can be a combination of hard and soft benefits but in theory all should have a strong value associated with them in order to keep customers coming back for more. Customers really need to become emotionally invested in your program and feel as if they are being rewarded, they are a valued, have access and are being recognized. If not, the rewards will not become their goal and customers will lose interest in your program.
Rewards within Reach. The rewards of any customer loyalty program must be obtainable. The structure of your points and rewards system should be established in a tiered fashion in order to provide your program members with an opportunity to receive the perks and rewards associated with membership in your loyalty program. Random instant rewards drive the excitement, interest and momentum in the program.
Knowledge is Power. One of the most significant pitfalls to effective loyalty marketing is the use of tactics without the benefit of reliable customer data analytics. All the tools you need to develop a comprehensive customer profile are at your fingertips. Use survey questions to ask your customers what really matters to them. What giveaways appeal to them most? What offers are the most enticing? What rewards are most valuable? Using such information can be incredibly valuable in tweaking your program along the way and useful as a means of providing your customers with what they really want.
Communication. Establishing a loyalty and rewards program enables you to proactively communicate with your existing members, prospects or members instead of passively waiting for them to return to your web site or stop by a store to purchase your product. Talk to your customer base often with information and offers that make sense. A rewards program enables you to easily and affordably create communications that are valued by your customer (since they have a vested interest in your company and your products) and you can make those communications support and enhance your brand in a way that substantially differentiates your company from the competition.