In the ever-growing and crowded online space, it’s important to stand out. One way is to engender loyalty with existing customers and keep them coming back.
Cultivating customer loyalty is more important than ever as so many brands are increasingly price matching to remain competitive. That means that keeping demanding customers is hard as many have no problem switching brands based on the experiences retailers can offer.
And one way to nurture customer affinity is to have a loyalty program. For retailers, the cost of implementing a loyalty program can be offset by turning existing customers into repeat customers and raising their lifetime customer value. And since it’s often far less costly to keep a current customer than acquire a new one, loyalty programs can provide a much need differentiation from competitors.
A loyalty program can provide etailers with a competitive edge and have many benefits. According to Bond, 77% of consumers say loyalty programs make them more likely to stay with brands. And loyal customers spend 37% more with brands when they are a loyalty program member, according to the Bond study.
In addition, 70% of consumers are more likely to recommend a brand with a good loyalty program, according to Bond.
However, as consumers are becoming savvier and more demanding, loyalty programs must offer more than just discounts. Shoppers are also looking for convenience and status
Make it Easy
With so much shopping being done on mobile, consumers are getting used to instant gratification. Shoppers want what they want when they want it. And it has to be simple, easy and convenient. That’s the heart of Amazon Prime and why the program has been so successful.
This means that programs should be easy to engage with. Loyalty programs — especially those that require a downloaded app — will fail if they require more effort than what they’re worth to consumers. The key to driving long-term customer loyalty is making life easier and solving problems for your loyalty members.
Status and Personalization is Paramount
Discounts are important, but consumers also crave personalized experiences. That can come in the form of early access to relevant products, invitations to events where they can bring friends and access to useful information.
Savvy customers expect product recommendations based on past behavior and see-through marketing efforts that aren’t tailored to their individual needs and preferences. Seventy-six percent of customers felt that receiving personalized discount offers based on their purchase history was important, according to LoyaltyOne.
Additionally, consumers who believe personalized experiences are very appealing are 10x more likely to be a brand’s most valuable customer – those expected to make more than 15 transactions in one year. These customers also shop more than three times more frequently, according to an Epsilon report.
Value is a Must
It’s no surprise that saving money consistently emerges as a top-three loyalty benefit. It’s easy to provide loyal shoppers with straight cashback, but harder to make it memorable. Rewards are also a top request from customers in loyalty programs. Seventy-five percent of consumers say they favor companies that offer rewards, according to Virtual Incentive.
There are even more ways to ensure a customer recognizes and remembers that they’re receiving value from your brand. Rather than giving a flat discount, some brands offer a rotating selection of free products or experiences. The customer then has the memory of interacting with the free reward which can be more meaningful and memorable.
While some trends might help brands refocus and refine loyalty efforts, it ultimately comes down to knowing your customer and understanding that an effective loyalty program can’t be all things to all people.