Loyalty is something that every business works tirelessly to achieve in their customer base, but it's also one of the most challenging things to keep, once you've got it.
Customers have to know they can trust your business to always follow through on any promises that you might make to them, whether that's through offering quality products or reliable services.
Clients at Northsail know they can trust us, because we always deliver our projects on-time, on-spec, and on-budget, but it wasn't always something people could assume. We've had to earn that trust through years of successful projects and satisfied customers.
If you want to earn more loyalty from your customers, it could be time to consider adding a customer loyalty program to your website. This gives your regular visitors the opportunity to earn loyalty rewards for making frequent purchases from your business.
We've got some tips that will help improve your customer loyalty marketing and program design, but before we get to that, let's talk a bit about the importance of customer loyalty, the benefits of this business model, and what loyalty really is.
There are actually a few different types of customer loyalty.
When someone purchases from you for the first time, you want them to have positive experiences, so that they'll leave as satisfied customers and return for future purchases. This is called customer retention, and it’s one way of measuring your current loyalty levels.
Building loyalty means finding ways to engage current customers, so that they want to return to your business over and over. Once you've created a healthy, long-term relationship with a customer, they develop an emotional connection to your brand, which is called brand affinity.
When a person chooses to return to you over your competitors repeatedly, we call them loyal customers. These are your brand champions. The people that tell their friends and family about your business, at least until you give them a reason not to.
Unfortunately, customer loyalty is very fickle. A couple of bad customer experiences, and you can lose even the most devout fans of your brand. They’ll start looking elsewhere if you're not meeting customer expectations, or the quality of your products/services changes for the worse.
Customer loyalty is vital for the long-term success, profitability, and scalability of any business.
82% of businesses agree that customer retention is cheaper than new customer acquisition, so unless your goal is to expand the reach of your brand, it's cheaper to focus on keeping your current customers than it is to find new ones.
You can build loyalty over time through consistent, reliable service to your clients, but you can also expedite the process by introducing loyalty campaigns to improve your customer retention rate, or focus on creating a rewards program that encourages customer engagement from both new and old patrons.
Adding this type of value over the customer lifetime is a great method for creating customer satisfaction, with the use of bonus rewards. It can also increase the velocity of their buying cycles, which is great for your bottom line.
Loyalty programs in particular are popular with most people, even those who are new to your business.
These start to add value after a single initial purchase, typically through some sort of points system. The most successful loyalty programs tend to have tiered programs, which offer a wide range of rewards from swag to gift cards.
Not only does this create added value for members, above and beyond the products and services that you're providing them, but it gives you an opportunity to track customer behaviors.
It's easy to track overall transactions, but for in-store purchases, it can be a lot harder to identify which customer segment you're servicing, unless the person provides you with some kind of identifying information.
Through offering a loyalty card, or having some sort of POS tracking system for loyalty accounts, you can begin to clarify your customer segments.
This gives you the opportunity to improve your customer service, as well as your offerings for their future visits. It can also tell you a lot about their buying habits, which is a great tool for planning future contests and promotions.
After all, your marketing methods will always be most effective when you're reaching the right target audience.
There are a few different types of customer loyalty programs with benefits that are unique to each of them.
Value-based loyalty programs are typically subscription programs, where members agree to pay you a subscription fee once per month/year on a credit card. In exchange, they get access to a set of special bonuses that regular visitors don't have.
Most often, we see points-based systems being used, instead of value-based loyalty programs. This is mainly because people often don’t want to pay a subscription fee for something, unless they truly feel they're going to get their value back on the cost.
With your most loyal customers, that may not be a problem. For new or tentative visitors, paying a fee for something they may not use isn't a good option.
With point-based programs, members will collect points for each transaction or for spending a certain amount per transaction, and they can use those points on future purchases for discounts or special bonuses.
This is a vital piece of any tiered loyalty program, because it gives your clientele the opportunity to get their friends and family behind your brand as well, in exchange for some extra rewards.
Typically, you'll see this in a points-based loyalty program, because customers will receive 'x' number of points towards rewards for each person that they also sign up as a member.
The best part about including a referral program is that your existing members will likely be sharing their positive customer experiences with their loved ones in an effort to get them to sign up, so that they can take advantage of the bonuses you're offering.
This means, they're going out of their way to offer social proof to these potential new clients, so they'll be building trust in your brand, before these new visitors have even made their first purchase!
If you're going to have a loyalty program, we'd consider this feature an essential part of your customer retention strategy.
Customer feedback can provide you with an enormous amount of information, both good and bad, about the ways that your business is succeeding in serving your clientele, as well as the places that you might be falling short.
Finding out where your products or services are lacking is a great way to improve your customer relationships over time, and ultimately, increase the amount they'll spend at your business throughout their customer lifetime.
The percentage of customers that will offer feedback for you will go up substantially, as soon as you give them some kind of added value. In particular, you may see an increase in the amount of positive feedback that your business receives when they have a seamless experience shopping with you.
People are quick and eager to share negative stories, especially when they're looking for a resolution or some kind of retribution. Frequent customers will give you repeat business, but they may not be vocal about why they keep coming back.
Knowing what you're doing right is just as valuable as part of your knowledge base as understanding where you've made mistakes. Be sure to include this feature in your rewards program, so that you can start hearing more about the good alongside the bad.
Lots of businesses will offer a sign-up reward code like 'Welcome15' or something similar as a thank you for people agreeing to join their loyalty program. However, this isn't the only way you can personalize some of your rewards offers.
For example, consider giving your members birthday rewards as a special present on their big day. It doesn't have to be anything huge, even a 10-15% off code for their next purchase is usually appreciated.
People want to believe that as a business owner you care about their personal life achievements, the same way that as an owner, you want clients to care about the success of your business. Giving them a little bit extra (when a lot of other businesses don't these days), can really help set your brand apart from your competition.
And even though it could be something you offer all your members; it will still feel like a custom reward for members when they receive it, because it’s tied directly to their personal life event.
As great as it is to offer physical cards for your loyalty program out of your physical stores, in today's digital world, you have to be sure that your online community can access these same benefits.
In lieu of a physical card, you can create unique QR codes that members can bring into the stores with them, as well as use online through your website. This takes away the barriers between these two types of visitor traffic.
Social media marketing is also a valuable resource for connecting with people and building customer trust in your brand, so why not lean into the digital sense of community and make your tiered loyalty program available here as well?
Even if you can't engage everyone through these broad-reaching platforms, you're sure to connect with a percentage of customers that will be interested in signing up - especially if you're not charging a subscription fee.
In fact, this can be a great way to encourage new visitors to try out your business for the first time, after signing up. They'll be collecting bonuses on their first visit, which means your rewards program will be building loyalty from their first transaction.
Of course, if you've got an extensive list of email addresses for your existing customers that you've built through online account sign-ups, as well as in-store email campaigns to collect visitor data, you've already got a great promotional tool at your fingertips.
Email campaigns are a great way to reconnect with people that haven't shopped with you in a while, and remind them of all the new and exciting things your business is offering.
They may be interested to see what your tiered loyalty program has to offer, especially if they think that they'd be interested in visiting you again in the near future.
Just be sure to keep things informal and as personalized as possible. Try not to create templates that feel copy-and-pasted or dry. Otherwise, you may see a percentage of customers unsubscribe their email address from your list out of frustration.
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