A few days ago, we published an article about customer churn. Today, we want to tackle a similar subject. As you already know, customer churn is a severe problem that affects almost every company. One of the best ways to curb customer churn is to build customer loyalty. Loyal customers are much more eager to make more purchases and unlikely to depart your company or store. That’s why you need a customer loyalty program. What should such a program comprise? There are several vital facets you have to bear in mind. Thankfully, we have devised a list of customer loyalty program ideas. Let’s cut right to the chase!
The customer loyalty program is based on a straightforward idea. You reward every customer that makes regular purchases or engages with your brand on a recurring basis. Such customers are always precious to every company. They significantly contribute to your business’ stability and potential to grow.
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Companies, especially online stores, offer various incentives and other types of benefits that are aimed at building a regular customer base. In some cases, it’s even possible to gain brand promoters. They are especially valuable, and let’s be honest–challenging to get. Brand promoters act like micro-influencers–they promote your company among their friends and families. This way, they help you maintain a high sales level and sell more.
As you can see, the customer loyalty program plays a crucial role in your marketing strategy. After all, it’s a known fact that it’s easier to sell more to your regular customers than to acquire new ones.
Now, let’s think for a second, what do companies offer? The list of benefits can be very long, and it typically consists of:
Loyal customer – a beast difficult to tame?
In 2018, SalesForce published a “Trends in Customer Trust” report that contains a massive amount of valuable information that will help you come up with your own customer loyalty program ideas. Let’s take a look at some of the crucial insights coming from this report:
- 54% of customers don’t believe that companies have their best interests in mind. It is a massive obstacle on the way to build customer loyalty. You have to exert every effort to ensure your customers you really care about them. How can you do so? For instance, by offering them rewards and benefits that matter to them, not to you.
- 84% of customers said being treated like a person, not a number, is very important. Don’t treat your customers like numbers! Adapt a personalization strategy that will help you win your customers.
- 95% of surveyed customers said that they are loyal to brands they trust. You can’t build loyalty overnight. You have to gain trust first. It can be a long way, but it’s definitely worth it! The same report states that customers who trust your company are more likely to recommend it, buy more, and spend more money.
This raises the crucial question:
HOW TO GAIN CUSTOMER TRUST?
Thankfully, you don’t have to guess. The same report provides an answer. You will win your customers’ trust when you:
- Give them control over what information is collected about them (92% of responses)
- Show your commitment to protecting their data (91%)
- Vow not to share their data without permission (88%)
What does it tell you? You have to be transparent and open about solutions and security measures implemented in your company. Trust is intrinsically connected with safety.
THE IMPORTANCE OF CSR
Consider another interesting aspect of gaining customer trust. Modern consumers value organizations that:
- Work to protect the environment (51% of answers)
- Offer equal pay for equal work (50%)
- Give something back to the community (49%)
- Foster diversity and inclusion in the workplace (48%)
This means that you should make sure you treat your employees fairly and care about the environment or community you operate in. It’s always a great idea to take part in various charity events and initiatives.
PERSONALIZATION AND SEGMENTATION
The Sales Force’s report shows that customers don’t want to be treated like numbers. Personalization (combined with segmentation) is the best way to make them feel treated like real people. What can you do in this regard?
- Segmentation is based on dividing customers into different groups. Why is that relevant? This strategy allows you to match promotional activities with a specific group. Segmentation helps you define an effective marketing message, communication channels, and a way of argumentation. It increases the effectiveness of the activities carried out, thus minimizing their cost.
- Personalization allows you to send personalized messages to customers and talk to them directly through the store’s website. For instance, you should think about personalized emails. They ought to be written based on interests and/or previous purchases of a given person. And when your logged-in customer enters the website, greet them with a personalized welcome (Hi, Alice! It’s great to see you again!).
Artificial intelligence is the most effective way to build a successful personalization strategy. We can create machine learning-based algorithms that will continually analyze your customers’ behavior and purchases and, on that basis, personalize communication. Drop us a line to find out more!
Customer loyalty program ideas
Building a customer loyalty program is a multifaceted endeavor. What should you take into account when working on it?
Customer loyalty program ideas: A POINT-BASED REWARD SYSTEM
The vast majority of companies operate this way, especially retail stores, grocery stores, and gas stations. Every time you make a purchase, you collect points on your account. If you gather enough points, you can exchange them for other products or additional discounts. These points can be accumulated in various ways–via a special card, in a mobile application, and finally directly on your online account.
Customer loyalty program ideas: FREEBIES
Many online stores selling shoes throw into every parcel an additional pair of shoelaces. It’s a tremendous way to build customer loyalty. Why? First of all, shoelaces have to be frequently replaced so, this way, you solve one of your customers’ problems. Second of all, freebies make your customer positively surprised, which creates a positive image of your brand in customers’ minds. For you, as an entrepreneur, it’s a straightforward and cheap way to build customer loyalty.
Customer loyalty program ideas: VOUCHERS
It’s another interesting idea. You could think about offering vouchers/gift cards over a specific order value. For example, if your customer makes a 1,000 USD purchase, you can give them a 100 USD voucher that can be spent on further purchases. Vouchers can have a physical form (a card, a personalized letter with a discount code), or they can be exclusively virtual (sent via email).
Customer loyalty program ideas: TIERED REWARDS
Again, don’t put all of your customers in one basket! If you have a regular customer who makes large purchases every month, they should be rewarded more than someone who buys something two-three times a year, right? Tiers will allow you to increase the value of the reward as your customers progressively move up the “ladder”.
Customer loyalty program ideas: JOINT VENTURE
In many cases, companies partner with other entities to offer more attractive rewards. This is particularly common when your customers and your partner’s customers overlap. Let’s consider an example:
It’s a loyalty program devised by American Airlines. This program allows you to collect points called miles that can be exchanged for flights for over 1,000 destinations worldwide. How can you collect these miles? By utilizing American Airlines partners’ services. These partners are:
- Car rental companies
- Restaurant and gas stations
It’s a perfectly reasonable solution. If a given customer travels a lot, they will surely be also interested in renting a car or dining at a restaurant. It’s a clear win-win situation. AA can offer an attractive loyalty program, their partners get more customers, and the customer can fly for less money.
Think of potential partners you can partner with. They don’t have to be your competitors (in fact, they shouldn’t!). Instead, look for organizations that offer complementary or similar services.
Customer loyalty program ideas: OTHER FORMS OF ATTRACTIVE REWARDS
Above all, keep in mind that your rewards have to be attractive to your customers. It’s always a good idea to ask them what kind of reward they would be interested in. Use your social media profiles or newsletter to ask them about their perfect rewards. Act accordingly to the obtained results.
Lastly, many companies offer exclusive access to special offers and pre-sale deals for their regular customers. This idea works perfectly in the fashion industry, where every new collection is highly anticipated. You could think of creating some sort of VIP club (come up with a captivating name) and send invites to your best customers.
Feel free to share your own customer loyalty program ideas. You can do that here by posting a comment, or go to our LinkedIn profile.
And if you’re interested in implementing an AI-based solution that will help you segment and personalize communication with your customers, we are at your service! Addepto is an AI consulting company experienced in the eCommerce sector. We will gladly help you devise and set a perfect personalization tool. Drop us a line today!
 Salesforce. Trends in Customer Trust. URL: https://www.salesforce.com/content/dam/web/en_us/www/documents/briefs/customer-trust-trends-salesforce-research.pdf. Accessed Nov 26, 2020.
 AA. AAdvantage® program. URL: https://www.aa.com/i18n/aadvantage-program/aadvantage-program.jsp. Accessed Nov 26, 2020.