It's always a good idea to revisit your loyalty program structure and perks to answer this question: "Is this program still relevant and exciting for my customers?". Because customer preferences change, and customer demographics shift, you'll want to ensure you're always relevant to your audience. If you don't know what your customers want, just ask them! A simple survey with just a few key questions can help you identify what they love about your program and what they would like to see in the future. A customer loyalty survey by COLLOQUY reveals the top reasons customers engage with loyalty programs and also why they may stop participating.
The Two biggest reasons members continue to participate in loyalty programs:
1. The program is easy to understand (87%)*
Ensure your program's structure is easy to follow so customers clearly understand how to earn points and what rewards they can redeem. Try to keep rules simple so customers don't become frustrated.
2. The rewards/offers are relevant (75%)*
Ensure you're offering some great perks that your customers actually want. Exclusive rewards are more enticing where the customer can eventually earn something that they cannot buy such as a VIP invite to a special in-store event, or free coffee for a year.
The main reasons loyalty members stop participating:
1. Did not provide rewards/offers that interest me (56%)*
If there is little incentive for customers to participate, they'll stop caring about earning points and engagement will fall off. If you're not sure what type of rewards your customers want to see, just ask them in a brief survey. They'll be happy to tell you what they want and impressed to know that their feedback is making a difference in the program.
2. Too hard to earn points for rewards (54%)*
If your reward items are not attainable, customers will lose interest. If they shop with you regularly but it takes them a year to earn a $2 coupon, the program will lose value for them.
***92% of program members described their participation as either "fun" or "economical".
Does your program fit into one of these categories - or both? Keep communication open with your customers and you'll receive great feedback about what they like and what they would love to see from your program!
*Stats from "Customer Loyalty in 2015 & Beyond" - Colloquy
While your customers may love your rewards program, they still need to receive a positive overall experience with your business/brand consistently to make the relationship work. Your loyalty program should complement your customer experience, not try to replace it.
Check your reports to identify which rewards your customers love the most. If you’re thinking about adding some different reward items but are unsure what to offer, ask your loyalty members through a quick survey. They’ll be happy to provide insight to help further tailor their rewards program to their preferences. Don’t forget to add special perks that are only attainable to your loyal members through the program. How is your program different from your competitors? Try to revisit your program regularly to ensure it’s unique, fresh, and exciting for your VIPs. Showcase your top members monthly on your website or social channels and think about other ways you can engage them and make them feel special.
Here are a few must-haves when trying to ensure a great customer experience:
1. Businesses Don't Promote It. One of the most important things merchants don’t do (or don’t do well) is promote their new loyalty program to their customers. You have a great new program, you’ve worked hard to make sure that the rewards would be enticing and exciting for your customers, however they’ll never know about it if you don’t tell them!
LYLTY offers free A5 and A4 info cards that you can place on countertops (or tables) to create customer awareness in-store. By far our best tool for awareness of your digital program is to hand out the LYLTY info business cards instead of giving the customer another of your old loyalty cards. Don’t forget to promote your program on your Facebook page and website if possible. Outline how the program works and highlight the great perks available. Explain the benefits of joining your loyalty program. Will customers receive a free coffee after the purchase of 10? Will they get to stand in the VIP express line next time? Could they win a chance to design their own food item to be placed on the menu next month? Ensure your staff is educated about the program and able to promote the benefits to customers in-store.
2. The Program is Too Complicated or it’s Too Difficult to Earn Rewards. If it takes a customer a year to earn a free coffee they’re likely to lose interest in your loyalty program, and once they’re no longer engaged they’re less committed to purchasing with your business (vs your competitors). When competitors are offering similar products/services at comparable prices, you need a competitive edge to keep your business enticing. Special VIP perks are a great way to give customers an extra reason to choose you however, if your new members realize that they actually have to spend $1000 before they’ll earn a muffin, this will seem unrealistic and will likely cause disengagement with your customers. Additionally, if your program is too hard to understand, the same will happen. Customers don’t want to jump through hoops to chase rewards – remember this is a loyalty program, designed to reward their loyalty. The good thing about your customers using the LYLTY app is being able to see their points balance at a glance. Simple.
3. Businesses Don't Offer Relevant Perks.Providing rewards or perks that are not relevant to your customers could cause disengagement with your program. A skateboard shop offering boxes of nappies as part of their rewards will have significantly less appeal than a maternity clothing shop offering these nappies to their mum-to-be customers. Rewards don’t always have to be physical or free products. Some of the best perks are unique items that customers could not otherwise obtain or purchase on their own. The skateboard shop in our above example could instead offer the chance to meet their favorite pro skateboarder or customers that earned X points are invited to an exclusive skate park event – just for them! These offers are not only relevant to the customer but they’re awesome perks that are exclusive to your program and tailored to your VIPs. If you don’t know what your customers want, just ask them! Now is the chance to get to know them better. Your loyalty program will allow you to track customer purchases and review your most popular specials to identify what your customers appreciate. Customers will be happy to provide input into their loyalty program and you’ll end up with some great ideas as well as some additional insight into your loyal customers.
Engaged employees provide better customer service, leaving your customers feeling good about their experience with your company/brand. Staff engagement also improves profitability, productivity, creativity, and morale, while decreasing turnover.
"Companies with high employee engagement scores had twice the customer loyalty (repeat purchases, recommendations to friends) than companies with average employee engagement levels" - Kevin Kruse, Author of Employee Engagement 2.0 and Employee Engagement for Everyone
If you're not sure how engaged your staff members are, you may consider issuing a survey in which they can complete anonymously (you'll get much more valuable feedback if you don't ask them to include their names). A rating scale can help you determine their feedback in areas such as:
Do you have mainly Millennials working at your company? Or a majority of Boomers? Different generations tend to have different motivators. For example, Millennials may be more driven by freedom, flexibility, and perks, while boomers may seek out job security and pay increase rewards. Discover what motivates your employees so you can better understand their needs in the workplace. Here are a couple of thoughts to keep in mind when working towards increased employee engagement:
Treat them with respect
Communicate with your staff. Give them responsibility and trust them.
Make them feel involved in your company's success
Ask their opinion on a new product. What customer feedback are they hearing regarding a new service and what suggestions may they have to create a better customer experience?
Recognize their contributions
Praising staff will make them feel good and doing it publicly (for other staff to see) will help others realize that they can also receive positive feedback for their small successes. Consider creating a scoring system or implement an employee recognition program to highlight the top three employees based on their performance each month.
When Should You Start Thinking About Loyalty?
How do you know when it’s time to start thinking about loyalty? Investing in loyalty is a big decision but has great rewards if deployed correctly and efficiently. Loyalty is a solution for companies who want to drive incremental lift and better understand their customers. If you are contemplating whether or not loyalty is the right solution for your company, ask yourself these three questions:
1. Is your cost of customer acquisition high (and your customer retention rate low)?
Most retailers, if not all, will answer yes to this question. With methods like search engine marketing and paid search advertising, the cost of acquiring a customer is skyrocketing and hurting profitability. Today, brands must focus more on retention rather than acquisition. In the long-run, shifting your efforts towards retention will be more profitable as you will encourage repurchase rather than a one-time purchase with acquisition. So how do you keep customers coming back for more? Loyalty programs effectively maximize customer lifetime value by providing highly personalized user experiences and relevant rewards. In incentivizing a customer to return, you will continue to capitalize on your investment.
2. Are you giving away your margin?
Are you constantly relying on discount codes and coupons to incentivize customers to purchase? If so, this may be the perfect time to start thinking about loyalty. Loyalty trains your customer to repurchase, rather than to expect discounts. Substituting discounts and coupons for loyalty promotions will prevent you from giving away your margin, especially to customers who may already be loyal. An example of a loyalty promotion that preserves your margin is early access to products for members. While this comes at no cost to you, its initial exclusivity makes your loyal customers feel special and gives them the opportunity to buy. Offering double points, rather than straight discounts, is another example of a loyalty promotion that can save your margin. Consumers will earn a percentage in point value per dollar spent, which will go towards future purchases.
3. Are you having trouble understanding your customer across channels?
Nowadays, customers have the ability to shop online, in-store, through mobile, etc. However, the data is siloed and it is difficult to connect the dots between systems. Omni-channel loyalty programs solve this problem by incentivizing customers to self-identify and engage across channels. Loyalty is a hub for customer data as it gives customers a reason to say who they are and provides a richer understanding of how customers interact with a brand. Providing a consistent, omni-channel experience for your customer is mutually beneficial. Investing in loyalty will give you a complete view of your customers and allow for targeted campaigns. And in turn, your customers will receive rewards and benefits that are truly geared towards them.
These questions can help you begin to think about loyalty. Lylty Ltd has an array of benefits, from providing a holistic view of your customer to encouraging repurchase through the data it collects. A program that encompasses multiple channels has the ability to drive profitability may just be the solution you need to elevate your brand.