7 key factors to make your loyalty program successful
More and more retailers are launching loyalty programs to attract new customers and keep those they already have. However, many of them underestimated the high value that loyalty programs yield when it comes to keeping customers devoted, which is especially important in order to thrive in the age of the empowered customer.
Loyalty programs are created to help retailers drive customer engagement and retention. However, only 1% of consumers in Hong Kong are “devoted” and express a willingness and desire to forge enduring relationships with their preferred brands. Whether your loyalty program is “official” or “informal”, it is critical for you to think it through thoroughly at inception, and pay close attention to its ongoing execution and profitability.
Here are seven key factors to help you get on the right track for loyalty program success and appeal to your customers’ heart.
- Personalise your data
A recent study by ICLP revealed that 69% of Hong Kong consumers would buy more if retailers used their data to better understand shoppers’ individual needs and requirements. If you are able to use these insights to enhance customers’ experience, you will have a greater chance to develop a “devoted” relationship with your customers.
To generate different shopper personas with richer insights and using these shopper personas to map relevant incentives to drive behavior, you need to move from an exclusive “pay to play” membership based on a set purchase amount to an inclusive approach that invites all customers to your program. With the ability to gather vast amount of consumer data through the growth of the digital landscape, you can harness this data and with this single view of the customer determine your engagement and investment strategy for different consumer segments.
- Make your programme simple and consistent
Your loyalty program must be consistent wherever your customer shops online or in-store. If “published”, your loyalty program should be continually updated with new features added as a way to entice more subscribers.
Members need to clearly understand the value of their participation: how they will be rewarded for their loyalty and how they can reach the next tier. Most importantly, to be successful, your loyalty program should be an extension of your brand and structured using comprehensive loyalty strategies.
- Surprise your customers
There has been a significant increase in competition with customers enjoying wider access to retailers, local and global, through the many different channels and devices with the convenience of the mobile wallet and ease of delivery. These empowered customers have a higher expectation on receiving more relevant/personalized communications, offers and rewards.
Your loyalty strategies need to surprise and delight your customers in order to keep them coming back and ultimately, to drive deep devotion to your brand. To remain competitive and capture customers’ attention, ensure that your program is markedly different from others on the market – think out of the box and get noticed!
- Loyal employees drive loyal customers
Your front-line staff are fundamental to driving customer loyalty and devotion and are your brand’s one-to-one marketers. They need to be educated, energised and engaged with your brand and its values so that they, in turn, can engage your customers and maximize the revenue potential.
Equipping your sales associates with the tools to understand your customers and develop relationships can be accomplished by providing access to customer profiles through mobile devices. Your staff need to fully understand how your loyalty program works both in-store and online to drive revenue and offer a superior customer experience. They also need to feel that the program supports them in helping meet their sales targets and other business objectives.
- Promote your programme and its benefits
Obviously, if customers do not know that your program exists, it is not going to drive traffic into your stores or to your website and you can forget about reaching your loyalty program membership targets.
Many retailers are brilliant at promoting their brand and advertising their next season’s collection, however, they fail to tell their customers about the benefits of the loyalty program or how/when they will get rewards. You need to continue to invest in implementing multichannel loyalty strategies and articulating your brand personality through your program.
- Your programme rewards customer behaviour
The most common customer complaint with loyalty programs is that it takes too long to accumulate enough points or rewards to see any benefit. Valued customers expect to see rewards and the program working beyond a transactional level from day one. Therefore, a loyalty program should not only reward purchases, but also brand advocacy, event attendance or simply for being a longstanding, valued member.
- Track the loyalty and set your targets
Many businesses find it difficult to prove the commercial viability of their loyalty programs, partly because these programs are not properly tracked or targets differ from what the program was developed to drive. If you want your loyalty program to succeed, you need to be sure that it is performing and know when to make necessary tweaks.
KPIs should be set across every touchpoint: tracking new sign-ups, repeat purchases, positive reviews, social media activities and brand advocacy such as referrals. It should also be clear how the ROI is going to be measured and improved. To achieve this, you need to ensure your loyalty metrics are set across all areas of your business, from logistics and fulfilment to digital experience teams, product development and sales departments, as well as partner with loyalty specialists such as ICLP to drive your customer devotion.
Now is the time to ask yourself the question – Is your loyalty program me working?