Using Loyalty Programs to Your Advantage in Marketing
April 30, 2024

As consumers, we all like being rewarded for placing our trust in a particular product or brand. It is human nature to want to be appreciated for showing one’s loyalty to someone or something.

In marketing, this is no different. How many of us are part of loyalty programs and enjoy being pampered with discounts, special offers, and gifts? Everyone, I am sure. Companies use loyalty programs to not only retain existing customers but also to attract new ones, which is considered a costly process. An Accenture study has revealed that more than 90% of companies today operate one or more loyalty programs to draw and retain customers.

According to research by Salesforce, 72% of marketers say that meeting customer expectations is more challenging than it was before. As such, loyalty programs then need to be better than ever in how they are designed and marketed. The benefits of such programs are diverse, such as having a higher lifetime value, increasing referrals, allowing for a better gathering of essential data, setting the stage for influencer marketing, and generating a positive Return on Investment (ROI).

So, what do marketers need to keep in mind when launching and maintaining brand loyalty programs?

The customer is king

Using Loyalty Programs to Your Advantage in Marketing

This age-old adage will never go out of fashion. This is because it is an essential truth. Knowing your customer well enough means knowing what their needs and behaviors are. Therefore, acknowledging what your customer wants and supplying that through one’s loyalty program is key.

Obviously, your customers have demonstrated loyalty towards your brand because they appreciate your brand values. Therefore, setting clear brand values and designing your loyalty program around those is important.

Talk to your customers

Keep a conversation going with your customers. Know which digital media platforms they are on and promote your loyalty programs through these channels. A loyalty program becomes useless unless customers know about it beforehand and are driven to make more purchases because of it. To this end, companies can use their existing marketing channels such as websites, direct mailers, Instagram pages, and so on to build awareness about their loyalty programs.

Don’t forget that mobile apps are the hottest trend to acquire anything these days, so use them to your advantage. Loyalty programs should ideally be accessible via mobile apps through QR code scanning systems, etc. That way, customers can receive notifications on the latest offers and easily see how many points they have accumulated and how many more points they need to achieve the next reward.

Furthermore, enrolling in such a program should be easy. If a customer has to stand in line for a great deal of time and fill in tedious forms, there is no doubt that you will lose them. Making enrollments simple, such as via SMS or email with the minimum amount of information required, is the way to go. Also, offer incentives for customers to sign up. Personally, I hate those loyalty programs that actually charge you a fee to sign up. It is ironic indeed, that one has to pay to be recognized as a loyal customer.

In addition, when selling loyalty programs, make sure that the rewards are worth signing up for. If there are rewards such as cash discounts, money-back offers, and bundle offers, customers are more likely to sign up and also refer friends to the program.

Finally, establish a service culture. Just because your loyalty program is on an app, it does not have to depersonalize your brand interaction with the customer. Have a mechanism in place where customers can approach actual people from your organization to talk to and discuss how their needs can be met. In fact, a study conducted by the ECSP Europe Business School revealed that communications with customers push more than 20% of overall customer trust in a brand and that particular company, this ultimately translates to profitability.

Keep in mind…

The 80/20 rule should be your driving factor, in that 20% of customers will bring in 80% of your profits. So, focus on the right customers and make sure that they are rewarded for their loyalty. Therefore, identify who your best and most profitable customers are, and keep them and their buying habits at the center of your attention.

Also, remember that a company’s loyalty program is only as good as the technology that is used to deliver it and the staff who are invested in the program. If one or the other or both fall short, then it’s time to strengthen these and start afresh.

(Anouk De Silva)

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