It used to be that walking into a retail establishment and being given some form of a discount, special offer, or free sample was a unique and appreciated moment. Now, as customers, we expect a reward in return for our consistent business. We sign up for rewards cards, loyalty programs, email discounts, mobile coupons … anything for the extra savings.
On the merchant side, this is all summed into two words: customer loyalty. But with big brands building customized applications, credit card loyalty programs, and more, how do small businesses keep up? How do we measure the return on investment on something as basic as a punchcard?
That’s what this resource will extensively cover. We’ll go through what some of the top brand loyalty programs look like, dig into data proof, and end with how to make it all happen on a small budget.
Okay, so you may understand the concept of customer loyalty … but is it really worth it for your brand? How can you benefit from more loyal customers — better yet, how do you know if your customers are already loyal?
We ran an exclusive study of customer loyalty benchmarks from merchants with whom Thanx has delivered loyalty insights. The random sample size surfaces a number of interesting insights, and is comprised of the following:
Let’s dig deeply into the seven major stats and what they say about customer loyalty in the modern buying world.
The very first step to kickstarting your own loyalty marketing program means drafting what your experience should look like. This is layered into it’s own two steps.
First, think through the technology needs. Questions to ask yourself:
* In step three, we’ll review why a punchcard may not be the smartest choice here.
While these questions don’t need to be finalized at this stage, you should begin visualizing what possible experiences could look like.
Second, you need to decide what the purpose of the program is. There are a few different approaches to a loyalty experience:
The technology and structure both go hand-in-hand in creating the ultimate experience you want for your loyal customers.
Of course, picking a structure for your loyalty marketing strategy is useless without understanding the end goal. Here are some example goals:
You may create the best customer loyalty program to reach market … but why should anyone even sign up?
Your next step is to pick a sign-up incentive, such as giving away a free cookie when a customer signs up for your program. In essence, a loyalty program is a deal with a customer. I’m going to give you elevated treatment in exchange for behavioral data that will help me increase business. In this case, the cookie is simply how you start that relationship.
Many customer loyalty programs require a customer to continuously opt-in to your relationship through scanning a card, entering an email, or logging in somewhere. We don’t ask our partners to state their love every time we communicate, so why demand that from paying customers? Such actions have to be carried out tens of hundreds of time when ideally you want a much lower friction relationship.
By investing in customer loyalty software, you can build a program where once a customer is in your program, they’re in. For example, with Thanx, customers have to intentionally opt-out. Once a customer is signed up, they don’t even have to open the mobile application. Every time the consumer pays with their credit card, the data is collected and the Thanx app will release a mobile push notification that serves a reward right to the consumer. This type of effortless relationship removes the possibility of loyalty fatigue, where consumers are tired of constantly being asked to carry around additional loyalty cards, enter personal information during check-out, or open up their phones while transacting.
Thanx merchants see 89% long-term engagement of signed-up users (as compared to ~20% for traditional loyalty programs) because of this opt-out approach.
As hinted at earlier, a punch card doesn’t create true, measurable loyalty. While it lives as the traditional, low-tech approach, a hole-punched slip of paper doesn’t allow for useful or actionable data gathering. An online email sign-up program takes the lead generation approach where you can measure contacts created. The most ideal situation is a customer loyalty program that continues to feed intel to your business over the long-term. It’s for this reason a mobile application is favored by brands looking to collect customer data while still delivering on the experience front. Having a more visual program with a complete backend system allows you to win back customers over their lifecycle. It gives businesses the opportunity to establish patterns of behavior and create ways to incentivize our audience.
Collecting data? Excellent.
Now what will you do with it? Let’s say you start digging into transactional data, what will you do with that behavioral insight? Here are some example next steps:
You’ve taken a number of measures to outline your customer loyalty experience. But once you understand the goal of your customer experience, map out the proper experience, match that with your process for data collection, and hopefully use some software (such as Thanx) to help get your program built ... you’re ready to launch!
There are few factors to consider here when planning your launch:
It comes without saying that a customer loyalty program isn’t a one-and-done technique. Instead think of it as a customer retention program by thinking in terms of lifetime customer value (LTV). Every person you sign-up to your program is a customer you can interact with long-term; every additional sign-up can lead to huge value.
Continue to support your program, check in on the data collected, and use it to improve and enhance the program.
Now that we’ve extensively covered and understand customer loyalty, we thought we’d share some creative loyalty programs to inspire your own execution. While most resources of this nature often show success programs, we'll be sharing a display of programs that have and haven't worked -- but for the ones that haven't, we'll tune you into why to help us learn from just as much from customer loyalty mistakes as successes.
Well, that was a lot of examples! Even with all that insight in mind … are you worried about how to get started? What tools to use? How to do this on a limited budget?
Here at Thanx, we’ve built a mobile application that allows you to build with us. Your customers and consumers can use the Thanx app to earn loyalty benefits directly from your business.