While customer loyalty programs are an indispensable tool for increasing customer retention and brand loyalty, unfortunately it’s not quite as simple as setting it up and watching your profits rise.
As with anything, you only get out of it what you put in. In order for a customer loyalty program to work for your business and achieve your desired results, it requires some maintenance and constant tweaking to target your customers effectively.
Here are some tips to follow to ensure you get the most out of your customer loyalty program…
Tailor your rewards to certain customer segments (if possible)
Rather than opting for a “one size fits all” approach, which is really no different to the outdated punch card system, why not tailor your rewards program to each individual customer so they can work towards earning a reward that is suited to them?
Each of your loyal customers are unique, and as such the perks associated with your loyalty program should be easily adaptable to suit each individual customer’s needs.
For example, for cafes & coffee shops, your ‘run-in-on-the-way-to-the-bus-stop’ customer may just be in it for the free coffee, whereas your ‘grab-a-seat-by-the-window-and-read-a-book-or-browse-the-web’ customer may appreciate complimentary Wi-Fi, exclusive entry to a special event you’re holding, a free muffin to enjoy with their coffee purchase, or perhaps a free all-inclusive breakfast.
Start customers off with a win
The best way to entice customers to sign up to your loyalty program is to offer them a reward right away.
Something as simple as a free or discounted coffee upon joining a cafe’s loyalty program might be enough to get the ball rolling, and your return on that initial investment in the form of a free coffee pays dividends in the form of a new regular customer.
As a recent Columbia University study found, “The illusion of progress toward a goal induces purchase acceleration”.
Offering a sign-up incentive is a proven way to make on-boarding customers to your loyalty program much easier more effective.
Random offers of kindness
Many bars offer “Happy Hour” discounts, where drinks are cheaper between 5pm and 6pm, for example. The idea is that people will come at 5pm for the discounted drinks, and then get comfortable and stick around long after 6pm.
These bars often have a policy understood by the staff, but unknown to the customers, that the Happy Hour is actually from 4:45pm to 6:15pm. This way, when a customer comes up to the bar at 6:10pm hoping to still get Happy Hour prices even though they’re too late, the customer walks away pleased rather than disappointed.
This same mentality can be applied to loyalty rewards programs – by adding extra “rewards milestones” into the program that the customers aren’t aware of, they will be delighted to periodically receive a free cookie with their coffee, for example, or a free treatment with their haircut.
Clarity is key
Back to that earlier point about visible progress inducing purchase acceleration, it’s important to show customers their rewards status.
A punch card or punch card app is a simple and effective way to run a loyalty program which clearly shows the customer how many stamps they have to go until they can receive their reward. When they get close, they are encouraged to come back and spend more so they can sooner reach their reward.
Consider setting up your loyalty program in a way that your staff members ask the customer if they’re a member at the beginning of the transaction, and then if they are, bringing up the customer’s account could bring up their usual or most common order, to make the whole transaction even quicker and more convenient for both parties.
Incorporating merchandise from your shop into the rewards is a great way to advertise your business at the same time as making your loyal customers feel like part of an exclusive group. Perhaps after a customer’s 20th visit, they receive a VIP item to take home like a hat or mug with your businesses branding on it.
Don’t be afraid to ask your most loyal customers for feedback on how to improve your program, or other aspects of your business for that matter.
A digital customer loyalty app is a fantastic tool for reaching out to get customers feedback to see if your business operations or loyalty program needs any tweaking or adjusting.
It also makes your customers feel more invested in your business when they see their suggestions being acknowledged and implemented.
When a customer signs up to your loyalty program, they are providing you with their email address and other contact details, which you can use to keep them informed on special deals and remind them of their rewards status, special events your business is hosting or involved in, and any other valuable or interesting information you think they might like to know about.
This form of communication between a business and a customer isn’t considered spam – this customer has voluntarily given you their details, and they are a regular visitor to your business. This is a much more personal way to stay in touch than a mass-produced email.
So don’t be afraid to use your customer loyalty program to reach out to your customers – they want to hear from you! Especially if it involves benefits for them.
A digital loyalty platform is also a convenient communication tool (talk to us about the communication feature of the Stamp Me Loyalty App).
Promote your program beforehand and during
The path to a successful customer loyalty program begins before you have even launched it – successful promotion of your new program through visible signage and assertive staff bringing it to customers’ attention will ensure your program gets off to a promising start among your existing customer base.
Setting benchmarks each month for new enrolments will help you track the program’s progress as well as setting goals and targets.
Boost slow days/periods
What’s your slowest day of the week? Or perhaps you have a lull between the morning rush and the lunchtime hour every day during the work week. Use your customer loyalty program as a means for boosting these quiet periods by offering special deals and discounts during these low-revenue periods to incentivise customers to come in.
It’s unlikely that everything mentioned here is applicable to your business, but by utilising your own combination of the above tips and tricks, you can create a highly successful customer loyalty program that will likely have people queueing out the door!
If you’d like to discuss how to get the most of your customer loyalty program in further detail, please feel free to get in touch with our team of loyalty experts.