Most companies have adopted some sort of loyalty program. In practice, however, rewards programs are often misinterpreted, too ad hoc by focussing on short-term incentives, and don’t form part of an overall broader marketing strategy. 

 

The result? Frustrated customers, disillusioned CEOs, and decreased company performances with disappointing sales and rising costs.

 

If you would like to build a loyalty program that is truly successful and sustainable, we’ve put together the ultimate guide for you.  We’ll have you walk away with the tools to:

 

Improve customer retention – How to keep your customers, improve your customers‘ lifetime value, and boost your revenue.

 

Optimize marketing efforts It costs 5-times more to attract a new customer than it does to retain an existing customer. 

 

Increase the amount of money each customer spends with you. What more would you want? 

 

Gather critical customer data that will enable you to implement loyalty marketing strategies with a strong return on investment (ROI). 

 

The secret? Well, keep reading and you’ll find out just what the recipe for success is (HINT: a reward program requires a larger loyalty marketing strategy)

 

This guide will take a closer look at what loyalty marketing entails. You’ll discover eight proven, yet simple, loyalty marketing tactics and we’ll have you walk away with a clear plan of action on how to implement and maintain a profitable and rewarding loyalty program for your business. 

What is Loyalty Marketing?

Loyalty marketing is an intentional and customer-orientated marketing strategy to grow and retain loyal customers through incentives. Incentives can be in the form of rewards, discounts, or exclusive access to some of your products or service offerings.

 

Loyal customers can portray different characteristics, but usually order with some frequency, are generally satisfied, or at the bare minimum prefer convenience and are not inclined to switch to another provider.

 

While loyalty marketing starts off with points and rewards, these incentives only scratch the surface for what a robust customer loyalty marketing strategy can deliver.

 

Let’s dive a little deeper and look at proven loyalty marketing tactics that make all the difference in developing a profitable and long-term loyalty program. 

 

 

8 Proven Yet Simple Loyalty Marketing Tactics

So, where do you start? If you’ve been keen to jump on the loyalty bandwagon or have seen no considerable impact from your current program, don’t worry.

 

We’ve compiled eight proven, yet simple, loyalty marketing tactics to ensure you have the tools to build a truly successful and sustainable loyalty program.

 

-Define your objectives – Outline your goals and vision.

 

-Define what a loyal customer means to your business – Who is your loyal customer, according to you?

 

-Identify your loyal customers – Aggregate your customer data to identify your loyal customers.  

 

-Prepare your teams and social platforms for excellent customer service – Crucial and often overlooked. Make use of chatbots, segmented customer service, and personalized emails to offer a holistic customer service experience.

 

-Decide on the rewards or perks you want to offerDefine what rewards are affordable and impactful enough for your business. 

 

-Plan your communication methods – Identify your channels & frequency of communication. 

 

-Implement a good analytics provider for actionable insights – Ensure you measure, accumulate, and have access to reliable and valuable customer data to enable powerful & effective strategies. 

 

 

-Consider launching a loyalty program – Try to limit manual work by developing a loyalty marketing program.

8 loyalty tactics

Get started right away and discover the full extent of these proven marketing tactics to develop and grow your own loyalty strategy.

Brand Loyalty

Competition in an open market is almost always healthy. It encourages you to build innovative solutions to customer needs and serve them with a higher value than your competitors. 

On the negative side, it sways away your customers since they have a wide range of options to choose from. In such cases, the only thing that retains them is loyalty.

Loyalty, in the context of a business, can take two forms. Customer loyalty and Brand Loyalty. While loyalty program can help you build both kinds of loyalties, it is important that you understand the difference between the two so that you can better focus your strategies.

Customer loyalty is when you get a customer spending with you because of the incentives you provide to loyal customers whereas brand loyalty revolves around the perception a brand can create. Customers stick around because they like and respect the brand and not because of prices & rewards.

Customer loyalty may be advantageous in the short term when you really want to get the sales numbers going.

Brand loyalty = Evangelism

How to Build Customer Loyalty

Engaging existing customers and gearing up your sales funnel for repeat business form the basis of building a sustainable loyalty marketing strategy. 

 

But how do you build customer loyalty, in a practical sense? We’ve compiled four easy ways to build customer loyalty and gear your ecommerce business towards customer retention. 

 

-Be open to criticisms – Engage your customers and ask for help.

 

-Build a point-based system – Very effective and most visible customer loyalty program. Physical reward items such as the punch card are essential to use in combination with digital incentives

 

-Create a charitable incentive – Build community awareness & your brand at the same time.

 

 

-Enter into collaboration with other businesses – Combine forces with those companies that are naturally affiliated with your brand, product, or service.

Building customer Loyalty

Learn more! Check out our helpful article with how to build customer loyalty and its effects on your business.

What You Can Learn from the “Big 5” Loyalty Programs

Especially, when it comes to loyalty programs, there is no need to reinvent the wheel. Companies such as Amazon, Starbucks, and Nordstrom showcase best practices that you can adopt and use to create your own loyalty program.

 

So, what are some of their key lessons for your business?

Keep things simple & logical – Don’t overcomplicate and ensure an upward line in your reward offerings; the more you spend, the more you earn.

 

Offer flexibility Flexibility incentivizes your customers to return. 

 

Introduce payment options– Offering payment options will increase the likelihood of customers’ using the loyalty program during the shopping experience.  

 

Integrate with other relevant services Provide a full brand experience over and above the loyalty rewards feature.

 

Promote online interaction – Allow customers to earn points through online interaction.

 

Offer personalized rewards – Record valuable customer data and offer personalized perks. 

Big 5 infographics

Take a peek at the full list and review of the Big 5 Loyalty Programs.

How to Measure Customer Loyalty

To achieve customer loyalty requires access to critical and valuable customer data. Like anything in marketing, you need to be able to measure this in order to evaluate progress, success, or failure for that matter.

 

In order to measure customer loyalty, you’ll need to create or purchase a Customer Relationship Management (CRM) system. Whether it’s custom-made, a ready-to-go-system, or a simple excel sheet, make sure you record and track at least the following indicators:

 

Customer data: contact info & log each conversation 

 

Purchases: who, what, when, especially when through a promotion 

 

Product Needs: if you sell products that customers run out of, link to them just before their product runs out 

 

Once you’ve put a CRM system in place you can use the following metrics to measure customer loyalty: 

 

Net Promoter ScorePercentage of customers rating their likelihood to recommend a company, a product, or a service to a friend or colleague.

 

Repurchase ratio How many of your existing customers purchase from you again.

 

Upselling RatioDivide the number of customers who bought multiple products by the number of customers with a single product.


Customer Loyalty IndexQuick survey method with three questions to measure customer loyalty.

We’ve covered the 4 metrics you can use to measure customer loyalty in more detail.

How to Choose the Right Loyalty Software 

Choosing the right customer loyalty program software is no easy task. To get you started off on the right foot, we’ve highlighted four indicators that will help you evaluate & rate potential loyalty software programs for your business.

 

User reviews – User reviews are critical and will give you a good sense of the legitimacy, familiarity, and trust surrounding a software program before making a purchase.

 

Demos & trials availability: Demos and trials give you the opportunity to familiarize yourself with the full extent of the software. Make sure you take your time and have a good sense of what your options are before you commit to a full-on purchase.

 

Price range – Don’t commit to something you cannot afford and pick something that meets your business needs.


Product features & functionality
– Pick something that ties in easily with your existing business operations.

 

The more you can integrate things under one umbrella, the easier. And focus on combining user-friendliness with the ability to rely on support, when necessary.

Choosing loyalty software

We’ve rated the top customer loyalty platforms. This includes a full review of all features, pros, cons, and pricing

Why You Should Have a Loyalty Program

If you’re still on the fence about customer loyalty as a strategic tool to retain customers and boost sales, let’s fall back on core data, namely statistics.

 

With the advancements in technology, statistics from successful loyalty programs offer crucial, and more importantly, measurable impact. We’ve compiled all of these statistics (41 in total) into 10 reasons why you should have a loyalty program. 

 

-Boost customer spend – Simply put, loyal customers spend more money, ranging from 39 percent to 140 percent more than normal customers.

 

-Increase customer spend frequency – Loyal customers tend to stick to one brand with an increased purchasing frequency of up to 90 percent.

 

-Encourage word of mouth marketing – Loyal customers are more likely to recommend your brand to friends and family. And, since 81 percent of customers trust these types of recommendations, this is crucial. 

 

-Lower customer acquisition costs – It costs 5-times more to attract a new customer than it does to retain an existing customer.

 

-Attract more customers – As many as 82 percent of shoppers prefer to buy from businesses with a loyalty program.

 

-Increase customer lifetime value (LTV) – Customers who join loyalty programs are worth ten times the value of their first purchase.

 

-Easier than acquisition – 80 percent of businesses consider customer retention as easier than acquisition.

 

-Beat recessionLoyal customers tend to buy even during economic difficulties. 

 

-Loyal customers perform better in seasonal sales – with up to 25 percent more in seasonal sales.

 

-Higher conversion – Loyal customers have a higher conversion rate at 24 percent compared to 6 percent for normal customers.

 

Get the full load down on the top 41 loyalty program usage statistics.

Final Words

While developing and implementing a successful customer loyalty program is no easy task, this step-by-step guide has outlined proven yet simple tactics to get you off the right track.

 

Furthermore, it has drawn from existing, successful rewards programs to provide you with best practices to empower you to make the right decisions at the right time. 

 

You now have the tools to develop a system where customers are educated about the rewards of loyalty and are incentivized to earn them. 

All in the pursuit of sustainable and measurable loyalty.

 

Will you give it a go?