How customer loyalty and retention can be achieved
20th January 2022
Not sure if a customer loyalty plan is right for your business? Let’s start by imagining you’ve gone online and bought a gift for your friend’s birthday. Now when it arrives it’s in beautiful packaging, high quality and you know your friend will love it.
After you’ve made your purchase imagine that the same brand sends you a series of emails (without bombarding you). This leads to their customer loyalty program and all the discounts, and other enticing perks they offer as part of that.
You now not only love the product but are incentivised to shop here again. So, how likely would you be to now repurchase from this store?
If your answer is that you would, then the proof is in the pudding. Customer loyalty programs hold immense power over your retention and repeat purchase rate. This all helps towards improving your customer lifetime value!
If you haven’t created a loyalty program for your customers hopefully these tips and examples below will help you to get started.
What is a customer loyalty program?
Let’s start by diving into what exactly a customer loyalty program looks like.
As we briefly touched upon earlier, customer loyalty programs, involve you sharing rewards, discounts, and other special offers with your customers in order to tempt them into making additional purchases.
Customers who’ve already purchased from you know your brand and hopefully trust you. Meaning that they’re usually more receptive to your messaging. And, chances are, you spent a lot of time convincing them to make that first purchase. Make those efforts worthwhile by continuing to incentivize them with a loyalty program.
Loyalty programs offer your customers added value. Therefore your customers need to feel like they’re getting something truly beneficial, desirable, or useful to give them that extra incentive to keep shopping with you.
Is a customer loyalty program right for your brand?
It’s important to note that loyalty programs aren’t a one-size-fits-all strategy.
For example, some niches are more prone to one-off purchases. Think about buying a car or furniture. These are items you won’t be repurchasing regularly. Whereas brands selling products that customers are more likely to purchase frequently such as food and drink, beauty and fashion, etc… would almost certainly benefit from setting up a loyalty program.
If you want to create a loyalty program or improve your current one we’ve gone through a few different types of programs you may want to consider.
Examples of loyalty programs to boost customer retention
Take a look at these ideas and examples below and get inspired.
Give customers cashback
Cashback schemes are slowly gaining traction with eCommerce businesses. An array of eCommerce brands offer their customers credits after they’ve purchased through their online store. Which customers can use to reinvest in future purchases with the same brand. This offers a great win-win because your customers get added value and an incentive to buy from you again.
Create a loyalty system with points
Following the previous example, point-based loyalty programs are some of the most commonly used retention programs. In this scheme, customers receive points for completing certain actions. Such as placing an order, signing up for an account, referring a friend, and much more. These points add up in their account which they can then put towards future purchases with your brand.
VIP customer benefits
What distinguishes a VIP customer from a regular customer? Often VIP customers are the people who’ve either spent a certain amount of money with you. Or those who’ve purchased a specific number of products over a set period. Having a VIP customer list allows you to strategically offer higher-value rewards to users who fit the category requirements. VIP offers provide a feeling of exclusivity to people who already love your brand. And it can encourage a sporadic shopper to make additional purchases with the aim of getting into the club.
You can take this one step further with VIP segments tied to a tiered loyalty program. Where the more money customers spend with you or the more orders they make, the more valuable their rewards become.
Refer-a-friend scheme
Where retention meets acquisition. With a refer-a-friend loyalty program, you can reward your loyal customers while gaining new ones at the same time. You could offer your customers discounts, credits or points, or even freebies for referring their friends. This is often seen with subscription products/services such as Hello Fresh food boxes.
Give-back and charity programs
Another type of loyalty program that might prove worthwhile is charity incentives. Customers may be more likely to return to your brand if you have a give-back or charity program. Contributing to your corporate social responsibilities whilst engaging previous shoppers. Patagonia recently did this for their Black Friday promotion. Donating its entire global sales income from its own website and stores to 80 grassroots environmental organisations around the world!
Now we’re not saying you have to donate 100% of your profits but you could offer to donate 15% for each order you receive from your customers. Or you could set targets and give back once you’ve reached those goals. You can even get your customers more involved with your give-back program by prompting them to choose a charity you’ll donate to when they place their order.
A customer loyalty program is a highly effective avenue to take to help you encourage repeat business and long-term loyal customers. Ensure that the perks and rewards you choose will be a valuable addition to your customers’ experiences and align with your brand’s ethos. It will all add up to provide you with a winning customer loyalty program.
