Discover the transformative power of customer loyalty as we delve into eight key strategies that can convert your regular customers into ardent fans. Uncover the future of loyalty, where customer satisfaction meets brand advocacy, creating a win-win scenario for businesses and consumers alike.
Key takeaways
Properly designed and managed loyalty programs can unlock significant value
- The key to a loyalty program’s success is having the right data to measure it
- Since the onset of the pandemic, more than 75 percent of consumers have changed their buying habits
- 39 percent have either changed brands or retailers, and 79 percent intend to continue exploring their options in the next normal
- Shoppers are increasingly voting with their wallets based on a new set of concerns
Personalize test-and-learn across such segments
A/B testing capability is critical to fully leveraging those groups, allowing marketing organizations to experiment with new ideas, quickly discard those that don’t work, and scale those that add value.
- 39 percent of companies don’t test different segments of their marketing campaigns. A quick A/D test can increase conversion and click-through rates by 15 to 30 percent.
Take advantage of redemption elasticity
Companies that promote deeply earn deeper engagement among a special few brand-loyal customers over time.
- What may be lost in a single transaction can be more than made up for in repeat visits and greater frequency among those cherishing the original “memorable redemption” (and among consumers in their influence group).
Measure success based on engagement, not just accruals
Most loyalty programs are keen to share numbers on their program memberships or spend by members: these are a good reflection of the broad potential universe of members and comparing non-members to members.
- The most valuable metric to track is redeemers
- Redeemer members spend 25% more than enrolled but inactive members.
Measure Breakage by High-Value Segments
The best loyalty programs achieve their full value potential by reinvigorating members to participate in them, not by depending on breakage to make their economics look successful.
- Measure breakage by customer segment to ensure that the programs aren’t alienating any particular group and that high-value segments aren’t breaking too badly.
Segment customers into groups you can handle
Leveraging data to create meaningful, actionable segments that drive a world-class customer experience and maximize the value of all customers has become critical to optimizing a loyalty program.
- Segmenting by behavior ensures that the specific interventions directed to each customer segment are not only rooted in customers’ current behavior but drive toward the behavior desired from them in the future.
Create a standalone P&L for transparency on returns
Metricing the incremental impact of loyalty programs is one of the most difficult challenges for organizations
- Measuring performance around a program-specific KPIs helps executives in all areas drive performance
- Connecting a campaign, alliance, or other key levers allows for performance discussions and adequate budget allocations
Enlist partners to enhance offers and rewards
Establish clear alliance conditions from the outset, transparently detailing the terms, redemption process, economics, and value exchange.
- Recognize the benefit of this partnership in light of other offers in the program to ensure a consistent experience.
Offer points-plus-cash options to make a real difference
Allowing members to pay with a combination of their points and cash reduces the redemption threshold and increases the program’s attractiveness can motivate inactive customers
- The reduced redemption ticket is also a way to create additional price discrimination for loyal customers
