In a world of too many options for customers, building a loyalty program seems like the most straightforward thing to do. If you create the right loyalty program, you will be sitting on a treasure trove of customers who keep buying from you repeatedly. Boosting customer retention is possible through data-driven loyalty programs. 72% of customers have said in a survey that they will only engage with businesses that send them personalized messaging. Personalized rewards are the magic sauce to increasing loyalty program ROI.
In this article, we look at personalized loyalty incentives and how rewarding loyal customers will increase patronage.
By understanding the personal preferences of customers, you can create a reward system that works. You will also be able to offer personalized product recommendations, and highly targeted offers, and send tailored marketing messages. This will help you stand out from competitors and increase customer loyalty. Loyalty program optimization should be one of the main objectives of your marketing team.
Why Should You Offer Personalized Loyalty Experiences?
86% of customers say that personalization influences their purchasing decisions. People are likely to purchase more items when they receive personalized service. A Bond Brand Loyalty report says that personalized loyalty program members are 6.4x more satisfied with their program.
Looking at the above numbers, it is no wonder that increasing loyalty is a priority for all businesses. Loyal customers tend to spend more, many more times, and are likely to say good things about you publicly. The average US customer is a part of 16.6 loyalty programs, but they are active only in 7.6. The main reason behind such a drastic different in active usage of these programs is this– personalization. Yes, the lack of personalization makes a loyalty program common and uninspiring.
Your average customer is bombarded with messages from brands– every single day. There are several reports which say that customers receive as many as 10,000 brand messages per day. Marketers love to reach out to customers from several channels, starting from social media to SMSes. The problem with most of them is that they aren’t really relevant for each of your customer. This makes customer loyalty programs a challenge, but you can give it the much-needed impetus with personalization.
Interesting Statistics on Tailoring Rewards for Customers in Loyalty Program Technology:
- 81% of customers have said that they want a relationship with a brand, according to Merkle’s Loyalty Barometer Report
- 63% of millennial customers and 58% of Gen X customers are happy to share their data with companies if it helps them receive personalized rewards or discounts
- 53% of customers would prefer to get flexible personalized rewards within loyalty programs
- According to Kahuna, only 48% of marketers know that personalization leads to more sales, but they struggle with using it effectively
- 48% customers prefer to have personalized discounts on products that they regularly buy
How to Offer Personalized Loyalty Rewards for Loyalty Program ROI?
Personalized loyalty rewards imply that you offer rewards and incentives based on the needs and preferences of your customers.
- By Segmenting Customers:
Any marketer will tell you that segmenting customers based on a variety of demographic factors is the first step before committing to a marketing campaign. Collect customer data from offline and online channels like websites, mobile app, CRM, surveys, social media handles, etc.
Your customers will be from different backgrounds. A particular segment will be delighted with discounted rates while others will balk at the offer. They might be thrilled to be a part of an exclusive community of your customers. This is why segmented loyalty offers is pivotal. Offer a variety of rewards and keep mixing them for each particular segment based on their preferences.
- Ask Them Directly:
Here’s another easy step towards choosing the right personalized rewards: Ask them. Yes, you can use the services of an online survey tool to ask them the kind of rewards they would prefer. This will not only increase engagement with your brand, it is also a statement of the fact that you care. Doing so will increase the probability of customer-centric rewards that will be appreciated and celebrated more than a run-of-the-mill incentive that you provide for everyone.
- By Using Customer Data:
Check out the browsing history, purchasing patterns, behavioral trends, etc., to understand how they engage with your brand.
What kind of branded content do they consume the most?
What are the other brands that they follow?
Whose content do they engage the most with?
What do their social media comments look like?
Your customer might love it if you send free access to a service that aligns with the product that they bought from you. You can send them discounts for products that have been added to their shopping carts.
Your messaging can be based on previous customer experiences. Leveraging personalization with the help of customer data can be the biggest change you make for creating effective loyalty strategies.
- Through Gamification in Loyalty Programs:
There are studies which confirm that the presence of game-like elements in non-game contexts is known to increase engagement. Loyalty programs can get more interesting when there are challenges, badges, bars, treasure hunts, referral challenges, code words, etc.
- Let the Customers Choose:
You can create a list of rewards for different tiers in your loyalty program. All you need to do is to ask your customers to choose the one that they like the most. Give them the leverage to decide this and they will go ga-ga for your brand. This will only work when the rewards you offer are attractive.
- Observe and Analyze Their Behavior Over Time:
Offering tailored loyalty benefits is not the easiest of things to crack. If sending individual surveys is a time-consuming and manual affair, you can analyze their behavior over time. To create successful loyalty program case studies, you must keep optimizing your messaging based on their activities. Find out what targeted messaging is relevant and practical for your customers.
Metrics such as customer lifetime value, customer acquisition costs, retention rates, conversion rates, loyalty program signups, etc., you can find out the effecitveness of your loyalty program.
- By Using Data and Analytics:
The effectiveness of your loyalty program can be increased manifold with the help of data and analytics. You can get a deeper understanding of customer behavior by tracking analytics. Measure the frequency with which customers use your program. Find out the most popular rewards and see if there is any particular segment of customers who are fond of them. By tracking the data like a hawk, you can make informed decisions that will help you meet customer demands.
- Leveraging a Customer Loyalty Program Software:
With the help of a customer loyalty program like 99minds, you can design a variety of loyalty programs. Cashback program, VIP tiered program, point program, fee-based loyalty program, and hybrid loyalty program, are some of the loyalty programs you can create. You can select tasks that the customers must implement to earn points. For example, it could either be joining your newsletter, following your brand’s social media handle, or spending upto a threshold.
A customer loyalty program software allows you to implement several retention marketing tactics. From a centralized control panel to promoting your program and reports and analytics, a software for this can do wonders.
In a time and age where customer loyalty is extremely important for brands to stay in the market, it would be unwise not to offer personalized rewards in your loyalty program. Thankfully, there are customer loyalty software which can help in nurturing customers and guide businesses towards coming up with personalized rewards.
If you are looking to leapfrog your loyalty program’s effectiveness with the help of personalized customer engagement and rewards, 99minds should be able to help you.