Loyalty programs are more than keychain cards and coupons. If you’re looking to grow your customer base and cast a wider net, increase your purchase size and frequency, or even boost brand equity for your store, then building a robust loyalty program is essential.
Still not sold? Think about it from the consumers’ perspective. They’re constantly inundated with shopping options and offers, so you need to give them a reason to shop at your store over all the others.
In fact, according to Invesp, 69% of consumers say the choice of retailer is influenced by where they can earn some sort of rewards program. 57% of those who join are looking to save money while another 38% are looking to earn points.
However, a successful loyalty program requires much more than a monthly shotgun of discounts. In addition to regular deals, you need to build an irresistible program that excites your target consumers.
Yes, we’re going back to consumers again. It’s imperative you know your consumers inside and out in order to create the best possible offers and promotions that they’ll actually use. This means employing digital marketing tactics, like sending personalized messages across social channels that fully engage consumers. It also means building emotional connections between your merchandise and your customers’ interests. Simply put, you need to go above and beyond.
To help you get started, we’ve created a list of best practices for building a robust loyalty program:
1. Make Your Loyalty Program Mobile-First
It should go without saying that digital-focused strategy is key to compete in a market among tech giants like Amazon and Total Wine. That’s part of why doling out rewards on mobile, rather than physical cards, makes the most sense.
Everyone lives on their smartphones— so catch them there and keep their attention. This is especially important for millennial consumers, a third of which reported disliking physical rewards program cards and who spend a whopping five hours, on average, everyday on their smartphones. This also eliminates any issues of consumers forgetting their card, or even forgetting they are a member in the first place.
Push notifications are also crucial to reaching consumers. Using short and sweet messages (10 words or less) with keywords that engage and drive traffic (offer, ends, super, deal) at the right time of day for your store can turn over sales and bring consumers into your shop.
This is also a chance to seamlessly integrate customizations tailored to your audience by offering events, tastings, or even a merchandising item. Still, don’t believe a simple alert on your phone works? Localytics research found that once a push message is opened, only 15% of users who clicked ended up converting, compared to 54% of users who clicked on a segmented push message. Doubling down with an email echoing the sale also helps drive consumers to your store.
2. Keep Your Loyalty Program Free
As nice as it would be to pocket a small fee from every new user, charging does nothing to keep customers engaged. If anything, it deters them from joining to begin with.
While diehard fans may be okay with paying a little up front to save money later, most newbies will shy away and tell you to forget it. By keeping your loyalty program free, you’ll hook more newcomers on their first or second visit — and then keep them coming back again and again to reap the rewards.
Just think about the sheer number of apps and email subscriptions that compete for smartphone space and customer attention every single day. Unfortunately, fee-based programs will be cut during the first round of review. The only investment a new user should make is their name and either email address or phone number. Plain and simple, this creates little friction and inspires them to opt-in easily.
You can also build the momentum of your program, and your business, and keep it rolling with a steady stream of new users — which will also create more brand recognition and clout for you across the industry. From there, you can build on a tiered system that will trigger more sales and better kickbacks for your fans (more on this later).
3. Earn Points Without Spending
To really encourage engagement and get users excited about your program (read: get them really hooked!) you need to make your rewards accessible. This means that at some point or another, you’ll need to give customers the opportunity to earn points without making a purchase. Small but simple steps like earning coupons for store visits can add up and leave a lasting impact on your audience. Plus, it will certainly drive both the likelihood and frequency of their visits.
For example, try offering a 5% discount after every five in-store visits. You can also offer points through social referrals, which casts your audience net even wider with no lift on your end. Put your customer to work, so to speak, in other areas as well: ask them to complete surveys and reviews for both feedback and testimonials or attend events in return for rewards points or direct discounts. This system smartly serves both parties, forging a true loyalty between them— and you can’t really ask for a better incentive than that.
4. Tie Your Loyalty Program to Store Events to Supercharge Both
Events can also do double duty for you. By adding unique member events to your store’s calendar, you can encourage consumers to sign up and engage with your loyalty program. Events are also a prime opportunity to offer more or higher points for a limited period of time, which can help you leverage scarcity and customer aversion to lost opportunities. The fear of missing out is real, and it’s powerful.
From there, you can supercharge the event. Give it an exclusive feel by making an entire night out of it, getting creative with seasonal themes, building an ambiance, and offering product sales on the spot. Not only does this create excitement and cache, but it will also make your program members feel appreciated and rewarded. Plus, perks on a limited-time basis will spark sales, referrals, and even more engagement.
Stores that create hype around their specialty events, see surges upwards of 60% in sales. Successful supercharged events are strategically planned based on exclusivity (members only), frequency (rare but still accessible), and timing (filling a gap that competitors leave open). Keep all of this in mind, and market it well, and you’ll be able to squeeze every drop of benefits from a loyalty program event.
5. Add Tiers To Your Loyalty Program
Probably the most important aspect of any loyalty program is its structure. Set this up correctly for your business model, and there will be smooth sailing for you and your loyal customer base. More often than not, a successful loyalty member model includes tiers. That’s because, in one study, for example, 50% of respondents said they increased their spending or changed other purchasing behaviors in order to achieve a higher tier status in a rewards program. It’s human nature to want to progress and to know where we rank among others. Plus, the cause and effect cycle of spending to earn and earning to spend innately triggers more engagement with your program and the store.
To start, present small rewards when customers first join, then exponentially ramp up those rewards as their purchases increase. This will obviously encourage more sales, but you can also use perks and access in a tiered system as well. Stagger benefits like exclusive products, tastings, member discounts and more throughout these levels to both reward your tried and true customers, and act as a carrot to push new customers toward the higher levels. This inherently creates a rotation of expectation and desire that leads to repeat store visits and, of course, more purchases — because customers know that purchases progress them through the program, toward those shiny, coveted rewards at the top.
6. Interact on Social For Engagement & Feedback
It should come as no surprise that we are advising engagement on social media as part of a successful marketing and sales program. When it comes to your loyalty program, in particular, don’t make it a one-way street. By actively interacting on your social accounts, you are allowing and encouraging customers to provide feedback on your store and your program. And, as we already know, feedback and reviews are essential to growth and success. While in-person feedback during an event is great, online info from surveys and social campaigns can be just as revelatory. This type of engagement makes the customer feel catered to. It also lets you leverage their feedback and actually make an improvement — as a business owner you need to constantly test, change, and improve in order to succeed.
As humans, connecting with brands over social media has put faces and character behind otherwise enormous names. Use this to your advantage by building a presence that instills awareness and trust with customers. Plus, you can give consumers the power to share their rewards with others, growing your member base and collecting more engagement across your social media channels (including likes, shares, and comments on Facebook and Twitter), giving your brand personality and legitimacy. Growth across multiple mediums obviously builds a broader interest base, which, in turn, contributes to your sales funnel.
A solid loyalty program can make all the difference for your store. Your program is the front lines of customer experience. It embodies the two-way relationship that all 21st-century retailers need to cultivate with their customers, if they are to succeed. And it all comes down to proper design — a free, mobile-first, tiered structure — as well as clever implementation alongside events & promotions.
Don’t wait, the holidays are here. Start building or improving your program today, and we’re sure you’ll see the difference with your customers.
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