Many brands weigh the decision of implementing a loyalty program or begin a faint attempt without fully understanding just how powerful of a tool it can be. Any brand should carefully evaluate their use of a loyalty program to make sure that both they and their customers are receiving the maximum benefits.
Here are some features that a well-implemented loyalty program can provide that are not widely considered:
Irresistible Offers
Promotions can end up being wildly successful or an abysmal flop based on how effective they are at appealing to consumers. Loyalty programs allow brands to track the sales data of their members to see what types of purchases drive their behavior the most. A loyalty program member can then be sent a personalized offer tailored to their desires, based on their shopping habits alone. What could be more tempting than an offer for $30 off of a sound system to go along with a customer’s new high definition TV they just bought?
A loyalty program can also use the successes of these individual offers to create widely-available rewards that can drive frenzied buying patterns. Once a brand knows what products a customer wants most, they can offer a free or discounted item in exchange for hundreds of dollars’ worth of shopping activity. Better still, a loyalty-membership-exclusive product- like limited edition sneakers- can incite membership and brand loyalty based on one reward alone.
Encourage Interactivity Across All Platforms
Loyalty programs are great reasons for customers and brands to get excited about something. Makeup retailer Sephora, for instance, offers exclusive products to loyalty program members. The announcement of their latest promotional line always incites a frenzy of press and social media posting, generating considerable exposure over a short period of time.
Announcing offers on social media or having them only available through an app or in-store can drive customer behaviors in any chosen direction. Some brands even encourage engagement by offering bonus loyalty points for activities like checking in when visiting a store, sharing a branded status or reviewing several products online. Because of their ability to stir up conversation and attention for brands, loyalty programs are powerful allies for any digital marketing campaign.
An Army of Willing Guinea Pigs
When brands are considering a major new marketing push or service offering, they may be wary of jumping into the project head first. With loyalty program members, they have plenty of subjects to assess the effectiveness of a new program or promotion.
A brand can offer an exclusive preview of the new product’s debut only to top-tier loyalty members. The brand could also see how effective certain promotions are at triggering intended buying behaviors.
Power in Numbers
Beyond these special applications, loyalty programs have several tried and true functions that have only improved over time. An in-depth economic study by a notable loyalty industry expert found that a loyalty program can:
- Create around $1,500 in added sales per customer per year from referrals alone
- Establish a base customer retention rate of around 92%
- Increase individual customer spending by an average of 9.44%
- Encourage customers to switch from competitors at a rate of 7.72%
- Earn new loyal customers out of occasional shoppers that spend 66% more than they would have more on average
- See returns on investment by as much as 1000% for high-volume big-box retailers
The most robust loyalty programs can come coupled with tools to manage brand image and communication across multiple platforms, including social media, direct messaging, targeted offers and in-store communication via beacons. Digital Social Retail offers a unique software suite that can manage all of these aspects while also providing detailed analytics and easy-to-understand data summaries to help make decision making simpler than ever.
Drop us a line to find out more about how we can help you begin or revise your loyalty program to do most of your brand’s marketing heavy lifting.
