Making Your Loyalty Program Go The Extra Mile

Once upon a time, all that was expected from a loyalty program was the ability to run a compelling exchange of points for prizes. 

Today, a good loyalty program is so much more. Not just an engagement tool, but a way to drive greater customer lifetime value, counter increasing acquisition costs, and create the community that your brand deserves. 

At the beginning of your loyalty journey, it can be tempting to start smaller and revert to that simple points and rewards system, assuming that you’ll add more functionality along the way. 

However, if you’re really serious about investing in customer retention, then there are some key considerations that shouldn’t be overlooked if you want your loyalty program to go the extra mile. 

Consideration #1 – the role your program plays in your on-site shopping experience

The majority of loyalty programs will sit on-site and provide customers with a space where they can log in and see their member profile. A strong start, but the best loyalty programs are integrated across every part of the shopper journey.

The highest performing loyalty programs are driving adoption and redemption at every possible opportunity, from arrival on-site to the point where a customer is committing to purchase within the checkout. Brands using on-site notifications to drive signups, or to alert members to available rewards see far greater engagement with their programs. Those going one step further and allowing customers to redeem their points and access their rewards while they are checking out and finalizing their purchase see increased reward redemption, but also increased average order values. 

This increased interaction doesn’t just make your loyalty program performance look good. It improves customer experience and helps your customers to see the benefit of staying engaged with your program. 

Consideration #2 – the extra communications channels you can unlock

There are a number of simple loyalty emails that you can set up and leave to send in the background, and these are a great starting point for keeping in touch with your customers. But for your program to make the most positive impact on your marketing, your loyalty data needs to be passed through to your everyday communications too. 

Marketers who incorporate loyalty data and information into the email marketing flows they’ve built within their ESPs see significantly increased email open and click-through rates. Messages and communications that are triggered by positive loyalty behaviors and interactions are uniquely personalized, standing out in a shopper’s inbox far more than the average marketing email. 

If you’re personalizing your email communications with loyalty data effectively, then it also makes sense to go one step further and add the same data points and triggers to other comms strategies such as SMS. 

Shoppers are hit with hundreds of marketing messages every day so it’s worth taking the opportunity to build your loyalty program triggers and data points into those messages to drive greater click-through and response rates. 

Consideration #3 – a better understanding of your program performance 

Some loyalty program metrics are table stakes – from reward redemption to average order values there are reports that you should look at on a daily basis to understand whether your customers are engaging with your loyalty program or not. 

However, if you can truly understand where your program is working and where it’s not, then you can start to make genuine improvements. The ability to understand more advanced loyalty analytics will help you optimize your retention channel far more effectively. For example, recognizing when each individual is most likely to repeat purchase, or conversely when they are most likely to drop off, enables you to react accordingly – profiting more from your most valuable customers, and saving those who might be about to disengage. 

Overall program analytics are useful for understanding the impact your program is having on revenue and customer lifetime value. However, individual insight allows you to address customers at an individual level so you can make the most of your relationship with every shopper and drive more performance from your program. 

Consideration #4 – the sounding board you have supporting your loyalty decisions

A simple loyalty program can be set up and run in the background, but an effective one that leads to an engaged Insider community requires a degree of decision making – just like any other marketing activity or channel. 

To make sure that your loyalty program delivers the ROI and customer retention that you’re looking for, you may need to lean on others for support, inspiration, and advice. The programs that drive retention most successfully have not been created on a whim – they have been carefully designed, discussed, and implemented in collaboration with a loyalty expert who understands how loyalty ties together with the other Marketing activities you already have underway. 

But the advice shouldn’t stop once the program is live. Your customers change and adapt every day, and so does your Marketing strategy. To ensure that your retention activity doesn’t get left behind, you’ll need to regularly sense check your strategy and run decisions past an expert. 

The programs that are regularly optimized and revisited are the ones that stand the test of time, growing with a business and helping your brand respond to the different challenges that unfold.

Summary

If you’re making plans to launch or update your loyalty program, don’t just take the easy road. Take this opportunity to think through these key considerations and make sure that you’re setting yourself up for retention success, rather than just adding an additional marketing channel to tick over.

Special thanks to our friends at LoyaltyLion for their insights on this topic.