You might have witnessed many advertisements by the companies to woo their customers on every platform available. Through digital media, print media, hoardings, etc., companies use every method to capture more customers.
Out of all the tactics used, loyalty programs are the most important and fruitful strategies. Going beyond the purpose of awareness-building, the loyalty programs enable the ongoing communications, foster relationships with the customers, and help in value generation.
In this article, we will discuss the strong impact of loyalty programs in today’s era and how they must be planned to capture more market.
Why use loyalty programs?
Loyalty programs are that component of marketing and branding that helps to stand out in the highly competitive market where all the companies have almost the same plans.
Often, it makes it quite difficult for the customers to differentiate between the brands, and therefore loyalty programs are the only deciding factor left for the customers. So, companies have started with plans that are more customized and able to fulfill the customers’ needs.
The primary purpose of loyalty programs is to establish an ongoing context for learning more about customers, influencing their behavior, and adding value in return.
It also helps in increasing the value of the advertising industry. After enrolling the customers into loyalty programs, customer behavior can be tracked using targeted coupons, upgrades, downloads, customer referrals, etc.
Benefits of customer loyalty
Using loyalty programs, operators increase revenue, stimulate usage, retain the customers, especially the prepaid users. The information captured by the company helps to understand the needs of the customers and further introduce targeted offers, great e-CPM advertising opportunities, and then segment the customer base too!
Customer segmentation helps in better implementation of their loyalty programs. If the loyalty program is the last and the only option for your company to ramp up the sales, you must undoubtedly go with the loyalty program because it will surely retain your loyal customers. This will eventually lead to a surge in sales and increase customer retention.
To increase the relevance and competitiveness of their products and services and drive specific offers, brands and agencies make full use of loyalty programs to influence customer behavior. It is yet another way of making your customers excited about getting more rewards. You can announce the offers on social media platforms, and it will surely bring the most loyal customers. This will help you in creating a buzz about your brand online.
Another enchanting feature of loyalty programs is that it advertises your app’s great features! You can manage your product’s image, enhance communication, and optimize your site according to its needs. Through all the data collected, you can reflect all those numbers in the annual reports to promote your product.
The most important aspect of loyalty programs is that they are cost-effective. It is noticed that an old customer is seven times more affordable than a new customer. Loyalty programs assist in retaining past customers through offers and improve customer relationships.
Do’s of customer loyalty
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Create rewards for more than just spending
Loyalty programs aren’t just another way of pushing the customers to buy your product. The application must be designed to show that you care about your customers and involve them more in participation.
It can be done either by writing reviews online, participating in online surveys, or even some campaigns. Don’t ever attach the loyalty programs with the purchase of the product. Listen more to the customers and allow them to give you more advice.
Will you offer a sweet dish coupon to a diabetic patient or a cricket match ticket to a football lover? Not as the customer will decline the offer and ruin your relationship with that customer.
Today, companies generate a lot of data that can be processed and analyzed to know about the tastes of the customers. Therefore, you must use it to craft personalized programs to suit the needs of the customers.
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Shortening the journey of the customers to the benefits of the loyalty program
You want customers to get attached to your company through the loyalty program; therefore, you decide when the benefits of the loyalty program can be availed. If the period is quite long and benefits are not worth the price of the product/service, customers will leave it. So, pay attention to the program’s journey and how quickly the customers can gain the benefits.
The company’s significant earnings come from the minority group that subscribes to the most expensive plans, but companies must strive hard to cover a broader demographic. Through unique loyalty programs, they can bring more people under the carpet of costly procedures. This can be done by analyzing and diving more in-depth into their behavior and needs.
Don’ts of customer loyalty
The biggest mistake committed by many companies is that they launch loyalty programs without explaining its benefits to the customers, and how it is better than others. If there is a communication problem, then customers won’t subscribe to it. Also, you must analyze the behavior and collect feedback from those using the loyalty program. The need of the hour is to analyze your onboarding strategies.
Generally, all the programs are designed to keep the millennials in mind, but no one thinks of the centennials who can’t live without the internet. So, a smart strategy would be to start targeting this portion rather than the millennials.
“What gets measured, gets managed.” The more you measure the behavior, needs of the customers using analytical tools, the more you will know about the drawbacks in your loyalty programs.
Developing mobile loyalty strategy
This is one of the most common and popular app startups in which the customers get some free content, services, minutes, or points every time they install an app or complete a challenge. It will increase ARPU and reduce churns.
To increase more revenue and reduce the frequency, customers can be rewarded for topping-up at higher amounts. For example, Apps like mCent, Ladooo, Earn Talktime pay you through mobile recharge whenever you install a particular app or complete any offer from that app.
It invites the customers to give their information about personal demographics and the preferences regarding the marketing offers. This will be utilized to analyze the behavior of the customers and further enhance the loyalty programs.
Members, in return, get exclusive offers, promotions, contests to participate, etc. E.g., those having a love for music can be called for live music concerts or the latest modules; gamers can be given coupons, and so on.
Mobile coupons can be used to drive purchases, increase the spending by the customers, and provide various benefits. It will promote and sell other products or services of the same company.
Jack In The Box, which is an American fast-food restaurant, is a perfect example of this. They send a text message to their customers having “Get a FREE Jumbo Jack with the purchase of a large drink” message with a link. The link provides information about the deal and a coupon to redeem the offer.
Many companies give rewards to the most active users. Based on lifetime or ARPU, they receive gifts targeted to their usage patterns, personal information, and preferences. Apps like AppInsite give cash rewards to the users spending most of the time using their app, sharing and commenting.
The community provides a persistent channel for customers to receive brand or operator communications and sharing and accessing their products and services.
Mobile communities try to include portals and social networking features to get access to more users. Using social media details, companies can generate user-related content and share it with the user’s friend’s circle too!
How major retail brands use mobile loyalty programs
Through their app, Starbucks provides points for every dollar spent and accumulates thousands of loyal and active customers. The best offer is to order ahead of the skip line that grabs the customers’ attention.
Using the app, customers earn points on shopping and gift rewards directly from their device. They also incentivize people with free food on using the app. It is categorized under three types, the normal one, the silver members, and the red members. For every $1 spent, the regular members get 10 points, silver members get 11 points, and red members get 12 points.
Its recent Piece of the Pie program is so successful that it added over 20 million people. It boosted their sales by 65% this year by rewarding the memberships. Just place an order of $10 or more to earn 10 points towards FREE PIZZA.
After earning 60 points, customers can redeem them for a free medium two-topping Domino’s pizza! Domino’s tech team has developed a pizza identifier that will scan each pizza or slice and, through artificial intelligence-driven software, identify the image as pizza so that points can be awarded. This technology will recognize all pizza – not just Domino’s – for rewards.
Its loyalty program grew by 33% by adding eight million members. It also operates through mobile apps and rewards the members through it! You will earn five points for every $1 spent and a free beverage reward coupon every 200 points.
Conclusion
Summarizing, we can say that most of the loyalty programs today operate from mobile apps and give incentives for every dollar spent. Designing a loyalty program requires a lot of market research and deliberation by the experts.
We at RavStack have been designing loyalty programs for the past few years and have successfully driven our clients’ sales. Our team has specialized experts who did extensive market research and then lay down a detailed loyalty program.
Contact us anytime, and our team will reach out to make a unique loyalty program for you!
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September 16, 2020
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August 19, 2020
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