Loyalty programs are a great way to both retain customers and help gain new ones, but only if the program is optimized and effective. In general many customers have become desensitized to loyalty programs because so many businesses offer them and many of those end up being rather useless other than to save a dollar or two on the occasional sale item. Today we want to discuss the best ways to optimize your loyalty program to ensure that your customers are not only interested in signing up but also will help promote the usefulness of the program for you.
Why does my business need a Loyalty Program?
The most important reason to have some sort of loyalty program is that when properly done they are a great way to engage and retain customers. Additionally they provide valuable customer data which can then be used not only for marketing but also improved customer interactions.
- Over 80% of consumers from the Generation Z group will sign up for a loyalty program
that offers discounts or appealing perks
- Of the people who do not sign up for a loyalty program, the reason why for 70% of them
is the perceived hassle of the sign up process
- Over 70% of people who enjoy a loyalty program are then more likely to recommend
that brand to others
If you want to both grow and sustain your market share, a loyalty program can be the perfect vehicle if it is executed in the proper manner.
How can you optimize your Loyalty Program?
Optimizing a loyalty program follows a similar process to optimizing other aspects of business; you perform research, create a plan, test that plan and options within the plan, and then adjust the plan based on your testing results.
Review the customer experience
The first step in any loyalty program should be to review the customer experience and gain a better understanding of why a customer comes to you for business, what they like about inter- acting with your business, and what they don't like. In many cases you will find that you can enhance the customer experience by providing specific perks and benefits that other businesses provide. You can also look to use rewards to offset aspects of the experience they are unhappy with. For example, if customers feel you don't offer enough sales then part of your loyalty pro- gram could be geared towards earning discount coupons.
Craft your value proposition
What will your customers get out of your program? Why should they waste valuable time to sign up? The design of your program should be based on rewards and incentives that customers will both want and use. Some plans fail in this step because the rewards are ones most customers either don't want or don't need.
Focus on the small things
Many times people get caught up in the big idea or something that gets a big "wow" factor how- ever when it comes to loyalty programs it is the small things that tend to stand out especially if they are easier to attain. For example, the idea of Buy 10 and Get 1 Free is nice but it is also a big idea. If you are at a grocery store and you buy 1 of those items a week than means you need to wait 2.5 months to see a reward. A smaller perk that is rewarded more regularly is going to be more impactful, even if the overall value is lesser, because it will be received more often.
Evaluate your proposition with data
Use data acquired in your recent business cycles to evaluate your value proposition. For exam- ple, if the last time you offered"free shipping" incentive 90% of customers made use of it then that would support the idea of using that as a rewards incentive. Conversely if your last two "buy one get one" coupon deals fell flat then data would indicate this type of incentive is not effective for your business type.
Design your model
Take the time to design a business model around the program. The planning of a model increas- es effectiveness as during the process more ideas can be discussed and evaluated by your team.
Signing up for a loyalty program should be quick and painless. Limit information to the bare bones categories to ensure people don't have to put too much thought into the process. Ideally signing up should take a minute of their time. Once you have key data points, such as an email address, you can then encourage completing a more in-depth profile for greater rewards at a later period.
Rewards programs should not be forced on a customer but they should be consistently promot- ed from day one with signs, notifications on social media, and by regularly checking with cus- tomers to see if they have signed up, reminding them of the potential value they are missing out on.
Review and revise to keep it fresh
Regularly check in with loyalty members with surveys and other vehicles for feedback to look for ways to improve and give customers more of what they want. Additionally you can look at other businesses loyalty programs for ideas of ways to freshen up what you are currently doing. A stale loyalty program is a lot like stale bread; nobody really wants to use it.
The Bottom Line
The bottom line is that any aspect of your business should be looked at on a regular basis to ensure it is operating at the most efficient level possible. Our review of the best ways to optimize your loyalty program outlines a proven method for those businesses that need to either create a program or wish to review and revise an existing program that is not proving as effective as hoped. In both cases a good loyalty program is well worth the effort if you want to not only grow your market share but also sustain it.