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When you buy products from specific retailers, such as Starbucks, Sephora, or Taco Bell, you earn rewards points that you can exchange for discounts on future purchases. Sometimes, you'll get a surprise gift or coupon in your account. This brightens your mood while you shop and makes you feel appreciative toward the retailer, encouraging you to browse again.
The same concept could apply to your company. Adding a rewards program will encourage customer loyalty and attract more people to your store, increasing profits and foot traffic. However, before diving in, it's important to review the steps to create a customer loyalty program to ensure you're ready for this investment.
One-off customers are great, but building an audience of repeat customers could double or triple your profits. Sometimes, guests need a little push to get them to come back, such as excellent service, a surprise discount, or a follow-up email. Loyalty programs combine these methods and more to turn curious visitors into returning shoppers.
With loyalty programs, customers earn rewards every time they make a purchase, share your company on social media, or complete other tasks. They can exchange these rewards for free products or discounts, giving them a reason to choose you over your competitors. Rewards programs also make your guests feel like smart shoppers and create positive associations with your brand.
Another benefit is the opportunity to collect demographic information. As you learn how your customers shop, you can adjust your marketing strategy and figure out how to reach your audience. You'll also add more email addresses and phone numbers to your database, allowing you to send promotions straight to your clients' smartphones.
Before you start, you must realize that loyalty programs aren't right for every business. If you sell products that people rarely buy, such as mattresses or generators, trying to attract repeat customers might waste energy. Likewise, loyalty programs often look out of place in "serious" businesses, such as dental clinics or law offices.
However, if your business has many repeat customers, learning the steps to create a customer loyalty program could boost your profits and increase client satisfaction. You'll also earn new customers who sign up for the free rewards.
To start, you'll have to decide how to reward your customers. Many businesses opt for a simple points-based program: every time your customers shop and complete other tasks, they'll earn points to exchange for rewards. This makes it easy to earn and gives them freedom by allowing them to choose their own gifts.
Some companies take it a step further by adding a tiered system. Everyone starts at the lowest tier, accumulating points and earning basic rewards. As they continue shopping, they'll gradually advance to higher tiers that offer more points per purchase and come with special gifts, such as event tickets or exclusive presales.
You could also try a subscription-based program that gives customers access to rewards in exchange for a monthly fee. However, the cost will drive some shoppers away, so you'll have to clarify that they'll quickly see a return on their investment. Subscriptions usually don't earn as many members as free programs, but those who sign up will feel like VIP shoppers.
If you run an in-person business, a punch card program is one of the easiest ways to build loyalty. Give each customer a card with ten slots and punch a hole every time they purchase. You might want to buy a specialty hole puncher so customers don't punch their cards at home. They'll earn a free product when they reach five or ten purchases.
Your loyalty program is part of your branding, just like every other aspect of your business. Giving your program a fun, memorable name can strengthen your brand and make it more enticing. For example, Sephora invites fans to become Beauty Insiders, which makes members feel like celebrities. Try brainstorming names that sound thrilling, exclusive, and relevant to your industry.
Now that you've built the foundation, it's time for the fun part: choosing your rewards. Consider what your guests desire most as you think about loyalty rewards ideas. For example, if you run a coffee shop, they'd probably love the occasional free drink. Retail stores benefit from coupons, while service-based businesses can include free add-ons.
Possible rewards that you can offer include:
Choose several small rewards, plus a few larger ones, for customers who save up their points. Throughout the year, you can add seasonal prizes, themed gift,s and exclusive surprises alongside the default list. Ensure you clearly list the rewards on your website so guests know what to expect.
On another note, adding an introductory gift is a great way to get more people to sign up. Customers will join to get the prize or extra points, then choose you over your competitors next time they need your services. Plus, they'll make an initial purchase that they might have skipped otherwise.
Typically, making purchases is the fastest way to accumulate points. However, adding extra ways to earn rewards can help your subscribers reach their goals faster. This also shows customers that you want them to enjoy their experience and aren't solely motivated by money.
Additional ways to earn may include:
These methods don't require customers to spend a dime, but they still help you promote your business. Some customers will quickly use these methods to maximize their discount, so include a few options that don't expire after the first use. For example, they could earn five points every time they write a review or one point whenever they watch a commercial on your site.
The points themselves can remain in members' accounts indefinitely or expire after a certain date. Temporary points encourage people to shop more frequently, but they could also result in customer dissatisfaction. Permanent rewards allow people to shop at their leisure and save up for bigger prizes. Plus, you can reach out to old shoppers by reminding them that they still have points in their accounts.
With your plan in mind, you can search for loyalty program software online. Some software does most of the work by collecting account information, storing points, providing ways to earn, and inviting customers to use their rewards as they shop. Additional features may include purchase tracking, customer support, event integration, and credit card processing.
For in-person businesses, customers typically enter their phone numbers at the register to earn points and check their balance. Digital businesses usually store the points in an online account that guests access with their email address and password. To get more advanced, you could even develop an app that tracks points, rewards, and purchase histories.
Some businesses prefer to build custom software that meets their specific needs. This option is usually more expensive, but you'll have added flexibility and give your guests a more personalized experience.
Once you've launched your program, it's time to start earning subscriptions. Announce your new program on social media with a link that invites followers to join. Highlight the benefits of signing up, such as free membership, valuable prizes, personalized content, or seasonal events. You could even add a temporary sign-up bonus.
Your website should mention the rewards program somewhere in the header, footer, or front page. This will catch people already browsing and give them another incentive to shop. You could add a pop-up or two, but make sure they're easy to close so you don't drive away customers.
Marketing doesn't stop after the initial launch. Periodically, send emails inviting your subscribers to use their points, prepare for a presale, join a secret event, or refer a friend. You could also mention offers in your regular newsletter, inviting more people to join the fun. Likewise, give your program the occasional shoutout on social media.
For more promotion, you could reach out to frequent shoppers and ask them to provide a testimonial. They might discuss the program's benefits and how much they've earned. Highlight the amount of money customers could save, and point out that signing up takes only a few clicks.
Your members are the best source of honest feedback. Once in a while, a short survey will be released that asks for their anonymous thoughts and opinions. To get more responses, include a gift or coupon at the end. This information helps you tailor your program to your customers' needs while maximizing your return on investment.
Nobody will sign up for a rewards program that forces them to grind for six months to get a 10% off coupon. You'll need to make your program worth your customers' time, which means letting them cash out on average at least once a month. Instead of rewarding them only when they make a purchase, give them various ways to earn and delight your guests with the occasional surprise, such as a "double points day."
If you push your customers in a specific direction, you might feel tempted to limit rewards to particular products. However, this makes it harder for your guests to earn, and most people will skip the points instead of buying a product they don't need. You can exclude a few specialty items, such as subscriptions and gift cards, but offering rewards with nearly every purchase lets your guests quickly rack up points and look forward to shopping again.
When you want to promote a product or eliminate overstock, try offering double or triple points when customers purchase an item. This method drives impulse purchases because people are likelier to spend when getting a deal.
Personalization is another key to making your clients feel special. Birthday gifts, such as an exclusive discount or free product with their purchase, give them another reason to celebrate their big day. Likewise, try offering different rewards based on their shopping habits and sending emails acknowledging their preferences.
It's also essential to make rewards easy to use. When customers check out, include reminders about eligible rewards and allow them to apply coupons with a few clicks. This might seem like a loss initially, but it encourages people to buy more. Some customers will add more to their cart because they get a discount anyway.
Finally, give your subscribers fun rewards they'll want to use. Sprinkle in small discounts and gifts with the option to save for a massive reward, such as 50% off their purchase or a free full-size product. When shopping becomes a game, they'll feel like they're earning gifts instead of spending money.
Now that you've learned how to create a customer loyalty program, continue your education with E-Marketing Associates' marketing strategies newsletter. This free newsletter contains tips, advice, and industry news that help you stay ahead of the curve. Before you leave, sign up for a 15-minute discovery call to see how our products and services could enhance your business.
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