Driving ROI Through Customer Engagement and Loyalty

ROI of Customer Engagement Guide


Imagine your ideal customers. They likely return to your business locations often, love your products or services, encourage their friends to visit and spend more money each time. They have a strong, thriving relationship with your business.

It’s important to understand their habits to effectively engage them and grow overall loyalty. Growing advocacy and engagement with your patrons is vital for your business – and especially vital for boosting your bottom line.

Customer engagement and loyalty provides a tried-and-true ROI booster, and merchants are taking notice. However, not all loyalty tactics bring the same return. You want to make sure you trade in outdated methods for smarter, mobile-friendly programs that truly make a difference for your business.

To help today’s savvy merchants grow their businesses and drive a thriving ROI, we’ve created this comprehensive guide. We’re sharing:

  • What customer engagement and loyalty is
  • Why data-driven engagement programs provide the most value
  • 6 ways to drive ROI using data-driven customer engagement
  • How to measure the success of your customer engagement program

What is customer engagement and loyalty?

Customer engagement is the relationship and trust that customers have with your business. Every interaction you make with your customers has the power to foster long-term loyalty and drive higher sales.

Customers that feel connected to your business are more likely to come back, spend more, and stay away from the competition. The relationships you build with your customers are vital to business growth.

Why is customer engagement and loyalty essential to boosting ROI?

To put it simply – engaged, loyal customers drive more revenue. Consumers give more money to the businesses they feel emotionally connected to.

There are two main reasons why engagement and loyalty are essential for a positive ROI:

  • Improved customer service

86% of consumers will stop doing business with you if your customer service is flat. By focusing on growing customer engagement, you’re also focusing on fine-tuning the way you interact with customers.

  • More repeat customers

Successfully engaged customers represent an average 23% premium in share of wallet, profitability, revenue, and relationship growth compared to average customers. And since it is 7 times more expensive to acquire a new customer than it is to retain one, you want to treat customer relationships like your most valuable assets.

Fostering engagement with your customers drives more repeat business, improves customer service, and turbocharges your ROI.

Using data-driven engagement and loyalty to boost ROI

Not all customer engagement and loyalty programs deliver the same results. While some platforms boast a 140% ROI, other loyalty programs can actually erode your margin. So, which programs should you use to experience real success?

There are two main types of loyalty programs: one-off, discount-driven programs, and data-driven engagement programs.

The downfall of one-off, discount-driven programs

Up until now, many businesses have relied on discount-driven programs for customer loyalty. Without robust customer data, they relied on tactics like punch cards, Groupon deals, and blanket discounts to grow loyalty for their business.

One-off, discount-driven loyalty programs are methods of the past. Why? Because they:

  • Don’t drive incremental revenue
  • Don’t drive a positive ROI
  • Don’t offer any data to help you better understand your customers and their value to your business
  • Don’t foster ongoing relationships with your business
  • Attract customers who are looking for a deal and likely won’t return

Discount-driven programs might bring in a new one-time customer or bargain-hunter, but they don’t foster real customer engagement. They don’t offer data to help you better connect with your audience. They attract a one-and-done kind of buyer that isn’t emotionally connected to your business.

It’s time to re-imagine how powerful customer engagement and loyalty can be for your business.

Connect with your customers and boost ROI

Doesn’t it feel good to be seen as an individual? If you want to truly engage customers, you need to know them on a personal level.  While you’re not able to do this with a punch card or blanket discount, you’ll get to know customers 1:1 through using a data-driven customer engagement platform.

Automated engagement programs offer a true view of your customer. Customers are able to connect with your brand across multiple channels like text, email, and apps offering a whole new way for them to feel connected to your business.

Data-driven engagement allows you to understand a consumer’s real preferences and spending habits.  A robust platform like Thanx seamlessly provides insightful information in the press of a button. It gives you the power to understand and change consumer behavior. Through using data and information about your customers’ unique behaviors, you’re able to offer highly personalized and targeted offers that speak to them on an individual level.

6 ways to drive ROI using data-driven engagement

Now that you know what customer engagement and loyalty is and why it’s important for boosting revenue and ROI, it’s essential to know how these programs grow your bottom line.  Let’s dig into 6 ways you can use your engagement program to drive ROI.

1. Use unique customer profiles to understand customers and alter behavior

A high-performing customer engagement platform builds unique customer profiles tailored for individual customers. It uses heaps of real data that allows you to get to know your customers and their behavior across multiple business locations.

Data captured in an individual’s profile will tell you:

  • Lifetime value. What their individual long-term worth is to your business.
  • Average spend. How much they spend each visit.
  • Visit frequency. How often they are purchasing at each location.
  • Competitor benchmarks. How the customer interacts with and purchases from your competition.
  • Itemized purchases. What they purchase down to SKU level detail and when they buy it.
  • Comparative insights. How your customer is interacting with your competitors.

You can use this data to increase check sizes and keep customers coming back. A powerful customer engagement platform allows you to instantly send automated, personal, targeted specials and rewards based on customer spending habits. A platform like Thanx automates personalized rewards to help turn a coffee-only sale into a breakfast order. It can send real-time mobile offers to help convenience store owners get customers from the gas pump into the store and any other specific use case you can imagine.

Additionally, data living in customer’s profiles can help implement the home stretch effect to grow revenue. The home stretch effect occurs when a user knows they are close to a reward and spend more as a result. This effect is proven to boost revenue for businesses of all kinds.

Homestretch effect with Thanx

2. Reward VIP customers to drive ROI

20% of a business’ customers drive about 80% of revenue. Let that sink in. Understanding your customers also means understanding which customers make the most impact. Your most important customers, or VIPs, are the customers that:

  • Come in the most
  • Spend the most
  • Are the easiest to get to return
  • Are the easiest to change their behavior

You want to thank and engage your VIP customers by rewarding them.  A data-driven platform like Thanx will identify your VIP customers for you and allow you to reward them based on spend thresholds. Spend thresholds capture your most loyal, highest-spending customers tracked across multiple months. VIP programs based on spend thresholds increase average check size by an average of 17%.

Know your VIP customers

3. Use winback campaigns to engage customers and reduce churn

One of the most complicated realities offline merchants face is identifying and battling churn. And since its 50% easier to sell to existing customers, you want to make sure your customers are having positive experiences and coming back to your locations.

Maybe you have a weekly customer that hasn’t purchased in months or a daily regular who hasn’t spent any money in over a week. Without data-driven customer engagement and loyalty, you’d have no way to identify, understand, and alter that customers behavior.

There’s a solution. Implementing a data-driven winback campaign pieces together the churn puzzle. Winback campaigns can automatically reach out to churning consumersand provide a special offer that encourages them to come back.

winback campaign

By tracking engagement data, we use AI to automatically recognize behavior anomalies, identify churning customers, and offer them value that keeps your business top of mind.

Winback campaigns:

  • Generate 6x more ROI for your business
  • Drive 49% of lapsed customers back into your store

You can reach out to churning customers through the Thanx app or an email campaign to give a personalized offer that entices them to return.

4. Collect real-time customer feedback

Every customer experience counts, and there’s no better way to allow your customers’ voices to be heard than asking them about their experience in real-time. Not only does feedback surface real business issues, but we’ve found that customers who take the time to write feedback spend more.

Customer feedback lifetime value

Collecting customer feedback and replying to critical responses have been proven to grow incremental revenue by 21%. Use a platform that allows you to:

  • Collect customer real-time, in-app
  • Respond personally and privately to feedback instantly through the app
  • Collect Net Promoter Score (NPS) feedback to manage customer satisfaction
  • Reward users that give feedback

Not only does instant feedback give customers a way to connect directly and privately with you after their experience, it keeps negative responses away from social and feedback sites like Yelp that have the ability to impact your brand. Allowing a customer’s voice be listened to strengthens their relationship with your business.

Customer feedback in Thanx

5. Utilize Timeshift to help alter customer behaviors

All businesses experience slow times. What if you could drive more traffic to your least busy business hours? Using Timeshift, you can.

Timeshift drives traffic to slow business hours by sending targeted offers to members. It can increase spend at all times of day and impacts long-term behavior and customer lifetime value. Timeshift incentivizes revenue-generating behavior from loyal customers. You can track the campaign in real-time, monitor how behavior is changing, and drive valuable, incremental traffic.

Timeshift in the Thanx dashboard

To give you an example, imagine you are a full-service restaurant and bar. Bill with the Sacramento Kings hat and laptop always comes in on Tuesday and Thursday for a 5 pm happy hour IPA- and you know this information from data collected in your engagement platform. Time shift allows you to send Bill a reward for $5 off of an appetizer while he is physically sitting in your bar. Bill is thrilled about the deal and heads to the dining room for an appetizer, entree, and second brew.

Time shift users experience 18% more traffic during days that used to be considered slow. Driving traffic to off-peak hours is just another way your customer engagement program can truly transform your business.

6. Integrate customer engagement with your email marketing

Email marketing is another impressive channel that you’re likely already using to connect with your customers. Email marketing brings an impressive ROI of $40 for every $1 spent – so seamlessly integrating email with your customer engagement data is a fantastic way to efficiently drive revenue.

Emails targeted to loyalty program members generate:

There are different loyalty powered email campaigns that offer personalized, targeted rewards to customers. Using email, you can offer a member double progress toward their next loyalty reward for any purchase they make this week. You’re able to put out targeted campaigns that offer rewards for a customer coming in 6x during a slow business month.

targeted VIP email from Thanx

Thanx integrates with email service providers like MailChimp and Constant Contact. If you use a different provider, you’re able to upload that list to Thanx to send targeted offers. By integrating loyalty and email, you’ll be driving ROI for two crucial channels that connect with your customers.

Measuring the success of your customer engagement program

Mobile payments on rise

One large benefits of using automated, data-driven customer engagement is the ability to measure real return on investment.

Increased revenue from customer engagement and loyalty from Thanx

It can be tricky to know which numbers are most important for your bottom line. To measure the success of your engagement and loyalty program, your platform should offer these metrics to track:

  • # of loyalty members. Track how many customers you are able to seamlessly connect with.
  • # of VIP customers. Measure how many high-spending MVP customers your business has.
  • Winback ROI. See how much revenue came in as a result of messages automatically sent to lost customers.
  • Feedback response rates. Discover how much additional feedback you are gaining from your customers.
  • Feedback ROI. By responding personally and privately to customer feedback, you can track how likely customers are to return.
  • Increased visit frequency. Customers that are rewarded for their loyalty will likely visit and spend more. Track how customer loyalty is impacting your visit frequency, and measure if spending is up as a result of your rewards system.
  • Check increases. See exactly the boost in sales your customer engagement platform is driving, and learn how it relates to customer spending.
  • Revenue – Your success is measured in same-store sales growth — so that’s how we measure ours. Thanx drives incremental revenue — sales you would not have otherwise made — and proves it to you every step of the way.

Understanding and following these metrics show you exactly how your business and bottom line are growing through driving customer engagement.

Email Campaign Revenue from Thanx

Wrap up

Today’s merchants have a lot on their plates and limited time to focus on driving ROI.

Implementing a powerful, easy-to-use customer engagement and loyalty platform is a proven way to add value to your business.  You can watch your business grow while you run a business that your customers love.

So take some of the ideas we’ve shared for driving ROI with customer engagement and apply them to your business today. Customer engagement and loyalty allows you to learn about your customers, drive favorable behavior, and bring in positive revenue for years to come.