First my wallet, now my phone, are stacked with customer loyalty cards, emails, and apps. But what do customers want in loyalty schemes?
The customer loyalty market is in a state of flux. While physical cards decline amidst low-contact social distancing, notifications and emails from my favourite brands are more targeted (and appealing!) than ever.
With marketing budgets tightening, customer engagement is a wise area to defend. Recent studies show it can cost up to 5x more to acquire a new customer than to retain an existing one.
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Loyalty schemes are expensive to implement, promote and very costly to manage, both online and offline. But are they making a difference? Do they increase customer engagement, and what can we learn from the best examples?
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Managing customer loyalty schemes
Whether it's an in-house managed scheme or being part of an external…
With myriad options available to today’s consumer, customer retention is vital for e-commerce brands. Gamification, push notifications and loyal programs help in contently re-engaging with the existing customers
Research by Frederick Reichheld of Bain & Company found an increase of 5% in customer retention can improve the revenues by 25-95%. In e-commerce, repeat customers are godsends. They’ve proven their interest in buying your product and are willing to spend money.
In fact, according to a report by RJ Metrics, an online store typically generates 43% of its revenue from existing users. This figure can increase up to 75% if the store spends time and effort cultivating a deeper relationship with its existing customers.
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The question that…
Local tactics are the keys to consumer loyalty in a mobile-first world
For bricks-and-mortar businesses, loyalty programs have been a staple for decades, whether in the form of punch cards promising a free item, special sale offerings, or the now ubiquitous loyalty cards that we scan at grocery stores, pet stores, and everywhere in between. Simply put, customers think that loyalty programs are effective at getting them to return. It’s no surprise, then, that as ecommerce rose to prominence, many online businesses also instituted some variation of the loyalty program.
A problem arises today, however, when businesses think that the only way to drive customer loyalty is through such programs. But what are the alternatives? Customers are increasingly burdened by a jumble of key rings, codes, and email subscriptions telling them about special offerings and it can be a little overwhelming. There has to be another way.
One alternative to the traditional…
Selling to your existing customers is much easier than attracting new ones. So keep them coming back.
Do you want more returning customers? The kind of customers who spend more and visit more often?
Then a loyalty program could be the perfect tool to add to your customer retention arsenal.
Why? You may ask. Let’s start with the most reasonable fact: because it makes you more money. That is, of course, if you do it the right way.
Here’s a quick stat that’s worth remembering: Keeping a current customer costs you 3-10 times less than acquiring a new one, depending on the industry you are in. According to WordStream, small businesses spend between $9,000 and $10,000 trying to attract new customers on Google paid search campaigns in just each month on average. Just image how much more efficient you could be if you could switch that re-activating existing customers and getting repeat…
Understanding the true value of customer loyalty programs
According to Colloquy, there are 3.3 billion loyalty program memberships in the United States alone. When you consider that the entire U.S. population is only 319 million, the amount of loyalty programs per person is staggering. The average member is enrolled in over 13 programs and 71% of those earning $100K+ use loyalty programs.
76% of shoppers think that loyalty programs are a part of their relationship with brands. But most businesses focus their programs on discounts. You can’t substitute discounts for brand loyalty. There is an emotional aspect to shopper behavior that brands can’t ignore.
97% of loyalty programs are transaction-based, where customers receive discounts for purchases. While this is a foundational aspect of a rewards program, most businesses don’t go beyond that. Only 25% of them reward customers for some type of engagement. If you make your customer experience…
