Getting new clients costs six to seven times* more than keeping existing ones. Additionally, existing customers are 50% more likely** than new customers to try a new product from you, and spend 31% more***. This clearly illustrates the value and impact of having a customer loyalty programme and the growth impact it can have on your business.
Implementing a program that rewards customers who stay with your company for a long time and better yet, for life, is a great way to boost customer loyalty.
The 2018 Bond Brand Loyalty Report**** showed that 70% of consumers are more likely to recommend a brand with a good loyalty programme, while 77% of consumers say they are more likely to stay with a brand that has a loyalty programme.
This is arguably the most common loyalty programme methodology in existence. Frequent customers earn points that translate into some type of reward such as a discount code, ‘freebie’, or other type of special offer.
However, many companies falter with this method as they make the relationship between points and tangible rewards complex and confusing. E.g. "Fourteen points equal one dollar, and twenty dollars earn 50% off your next purchase in April!"
That's not rewarding. That's a headache. If you opt for a points-based loyalty programme, keep the conversions simple and intuitive.
Although a points system is perhaps the most common form of loyalty programme, it isn't necessarily applicable to every type of business. It works best for businesses that encourage frequent, short-term purchases, like our mobile phone supplier clients.
A mobile phone supplier has a points-based system with their staff whereby they earn points for every product sold. They can then redeem those points on products for themselves as well as bidding on them in a reverse auction. A reverse auction is when a product starts at a price, or in this case a points amount. Participants then wait until the amount on the screen goes down. They will then bid on what they are willing to pay, but they also have to be mindful of other participants as they might be willing to bid more, and if so then they will then miss out.
Finding a balance between attainable and desirable rewards is a challenge for most companies designing loyalty programmes. One way to combat this is to implement a tiered system that rewards initial loyalty and encourages more purchases.
Present small rewards as a base offering for being part of the programme and then encourage repeat customers by increasing the value of the rewards as the customer moves up the loyalty ladder. This solves the potential issue of members forgetting about their points (and never redeeming them) because the time between purchase and gratification is too long.
Bank of America for example has a great tiered bank loyalty programme that offers increased benefits at each level. Having different levels entitles the customer to a percentage off their interest rate booster, and a percentage of bonuses on select banking services.
The biggest difference between the points system and the tiered system is that customers extract short-term versus long-term value from the loyalty programme. You may find tiered programmes work better for high commitment, higher price-point businesses like airlines, banks, or insurance companies.
Loyalty programmes are meant to break down barriers between customers and your business. So, are we seriously now telling you to charge customers a fee to belong to a loyalty programme?
In certain cases, a one-time (or annual) fee that lets customers get around common purchase challenges is actually quite beneficial for both the business and the customer.
If you identify factors that might cause your customers to leave you can create a fee-based loyalty program to address those obstacles.
For instance, have you ever abandoned your online shopping cart after tax and shipping were calculated? This is a frequent issue for online businesses. To combat it you might offer a loyalty programme like Amazon Prime — by signing up and paying an upfront fee customers automatically get free two-day shipping on orders (plus other awesome benefits like free books and movies).
Strategic partnerships for customer loyalty (also known as coalition programmes) can be an effective way to retain customers and grow your company.
Which company would be a good fit for a partnership? The answer depends on the everyday lives of your customers, their needs, and the purchase processes.
For example, the Chinese banking company, ICBC has a simple yet effective loyalty program. Their reward program offers 1 point for every HKD/RMB spent with their ICBC Credit card. This can be exchanged for cash discounts, cash coupons, air miles (Air China Phoenix Miles, Hong Kong Airlines Fortune Wings Club Miles, and China Southern Airlines Sky Pearl Club) or on charities (Caritas - Hong Kong, Yan Oi Tong Charity)
While the main emphasis of the company’s loyalty programme is their travel rewards and points system, what makes it attractive is the company’s partnership with a lot of great agencies.
A customer loyalty programme, at its root, is you trying to create a deeper emotional connection with your customers. This is why in creating a customer loyalty programme you can use these strategies to make sure you have an effective customer loyalty programme that transforms customers into brand advocates.
1. Add A Personalised Touch To Your Email Communications
While sending out marketing emails to promote your items may be a good idea. Using highly personalised email can greatly affect your marketing campaigns positively.
According to Statista*****, personalised emails have an open rate of 18.8%, compared to only 13% for impersonal emails.
2. Use “Emotional Branding” To Connect With Your Customers
Your main goal in creating a loyalty programme is to build a deeper emotional connection with your customers and this is because emotions are the driving force for most of the purchase decisions made by customers.
Fostering an emotional connection with your consumers can increase customer brand loyalty. 65% of people surveyed said that being emotionally linked to a company helped them purchase more frequently.
3. Make Use of Social Media to Maintain Consistent Engagement
Engaging with your customers on social media networks on a regular basis is essential if you want to come across as a company that they can relate to and trust.
To put things in perspective, according to a recent research on the “Number of global social network users 2017-2025”, published by Statista******, 2.95 billion individuals throughout the world used social media in 2019. This demonstrates the enormous amount of potential people that could be reached on any of these social media platforms.
4. Charm Your Customers on Special Occasions
Seemingly routine days to you can potentially be very special events for your clients. To develop a deep and meaningful relationship with your customers, keep track of their big days, such as their birthdays. Without such dates, your data is incomplete.
According to B2B marketing, on average, it takes 7 interactions with a brand before a purchase takes place. So, implementing these strategies will immensely help your goal of ensuring that the touchpoints on your customer’s journey are positive, enjoyable, and unforgettable.
5. Customer Touch Points
The importance of a great customer journey cannot be stressed enough and its importance to the way your customers see your brand.
Identifying the key touchpoints in your customer journey, calculating the amount of positive impact each touchpoint has on your brand, and mapping each touchpoint can help your business consolidate all the different ways your customers interact with your brand and optimise their experiences.
Implementing these strategies are a great way to start creating your own customer loyalty programme that builds trust, creates great experiences for your customers, and the potential that they become brand advocates for you.
As you can see, having a loyalty programme that is tailored to your business can be an indispensable tool that can positively impact multiple KPI’s for financial services.
Engage your customers wherever they are with an omni-channel loyalty programme that's more than just a swipe card and encourage them to engage organically with your brand.
Drive customer and staff loyalty with reward programmes designed to decrease the time between purchases, increase basket size, and create loyal advocates from your customer base.
Take your customer engagement to the next level with a powerful, omni-channel marketing platform. Delight your customers, measure campaign performance, and drive revenue with TouchpointMX.
By using customer touchpoints, adding personal touches to your communications, making use of omni-channel marketing channels and creating an emotional connection with your customers you can play a role in every step of the customer journey.
Nothing is left up to chance. Instead, you provide targeted information at just the right time. Whether you’re a one-person business or an enterprise-level team you should use touchpoints to enhance the experiences of your customers, empowering you to retain more customers and encourage growth.
Turn your customers from occasional shoppers into loyal brand advocates, maximising your ROI along the way. Contact our dedicated customer loyalty team today to get started.
References:
* https://www.signalmind.com/infographics/cost-acquiring-new-customers-vs-retaining
** https://www.invespcro.com/blog/customer-acquisition-retention/
*** https://www.invespcro.com/blog/customer-acquisition-retention/
**** https://stampme.com/do-loyalty-programs-increase-sales/
***** https://www.statista.com/statistics/260678/e-mail-open-click-rates-personalization/
****** https://www.statista.com/statistics/278414/number-of-worldwide-social-network-users/
******* https://www.b2bmarketing.net/en-gb/resources/blog/marketing-rule-7-and-why-its-still-relevant-b2b
Turn your customers from occasional shoppers into loyal brand advocates, maximising your ROI along the way. Contact our dedicated customer loyalty team today to get started.