Concerning Loyalty Programs, it is necessary to know that in small and medium enterprises, the advertisement and loyalty budget is far from being the same as the one available to major groups.
If you are a merchant, independent or a small company etc, you will struggle to offer a loyalty program with all the diversity and all the bonuses just like the big brands. You must therefore focus on what is essential for your customers and what will make the difference.
A good loyalty program can provide significant revenue to your business by improving the performance of your sales and marketing budget.
Here are some facts:
- Keeping a current customer costs up to five times less than buying a new one.
- It’s easier to convince a customer who already knows you to buy again or buy more.
- In many cases, 20% of clients bring 80% of a company’s revenues.
So what are the important tips to know when starting a loyalty program? Let’s see that together.
1. The basic conditions
Before embarking on the creation of a loyalty program, make sure that the basics of your company are reliable: a customer’s loyalty depend after all on the quality and consistency of your offers, associated services, and your positioning in terms of the pricing.
Another basic question to ask yourself: Does your “kind” of activity allows to create a loyalty program?
Because the main challenge of such a plan is to register the client in a durable relationship with your company. If you are selling products or services that do not require or little recurrence of purchase like selling ‘pleasure boats’ for instance then the best is to act on the price promotion and not on the loyalty program.
2. Well defining its objectives
Which objective do you put behind the word “loyalty”? It is crucial to answer precisely this question: do you want to increase the frequency of your customer’s purchases, increase the turnover per visit, get contact information (SMS number, postal address, e-mail address) of your customers, recruit customers, increase their lifetime, increase satisfaction, stop the departures of your buyers…? It is important to select and prioritize objectives, because the more you specify them, the more effective the content of the loyalty program will be and in line with your own needs.
3. Understand your target audience
Customers have profoundly changed their buying behavior in the past decade. The results of studies all speak with one voice: customers are now better informed and have become more demanding, more critical in their purchases. Through the internet, social network, price comparators and discussion forums, they have acquired reflexes to compare products and brands.
If the customer knows you, you must know him too! Here are some questions to ask yourself about each client you have and to which you must find answers:
- What is the full name of this client?
- How long has he been with us?
- What is the value of this customer’s purchases in a year?
- What type of products does it buy and how often?
- Can we sell him other products?
- Does it use other suppliers and, if so, who are they?
- What profit does it bring?
- Does it pay quickly?
- What is the level of satisfaction?
- How could we improve our business relationships?
4. Be realistic
It is important to spend your time and resources on programs that actually fetch you results. Time is money, don’t waste it. This can be made possible by setting long-term but also short-term realistic goals for the programs. This will help in effective monitoring of the process.
5. Market your Loyalty Programs
Now that you have set your realistic objectives and you know what you exactly wants, your program could be awesome but if it is not known, what is the point? Ensure that your customers are well aware of the various loyalty programs that you offer and more importantly ensure that they are also aware about the numerous benefits they stand to gain from those programs. It is necessary to reinforce your informations at right times and in right frequencies, not too little for them to forget or not too much to scare them away.
Thanks to Loopy Loyalty and CherryPie which are Mobile Marketing Automation platforms, you can cook up and launch highly targeted mobile campaigns to propel customer engagement from online to offline. You can create, distribute, and manage digital stamp cards, loyalty cards, coupons, promotions, event tickets, gift cards, membership cards, transport passes and more. You can also tap into the millions of users who now use Apple Wallet, Android Pay, WeChat and AliPay applications.
6. Stay in touch
Communication is the key to a successful relationship. Without regular and well strategized communication via e-mail campaigns, apps, social media, mobile wallets etc, the reward programs will be in risk to be forgotten and it might end up making the customers feel having less value for you. Never underestimate the power of communication. Social media and mobile wallets are an excellent way to stay in touch with customers and also to monitor competitor behavior, thanks to push notifications sent via Loopy Loyalty or PassKit, the customer can instantly receive “promotion” notifications for example on his phone lock screen.
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