Is your customer loyalty program helping your business communicate with your customers? The traditional approach businesses have followed for a long time is focusing their customer loyalty strategy on pushing their customers to earn points and in return customers would receive discount coupons or similar rewards.
The major issue with the traditional strategy is that businesses are assuming that their customers remember the program and are incentivized enough to get just earn points for coupons. What they are missing is the bigger picture. Businesses should be using their customer loyalty program as a path to communicate with their customers more frequently, building long-term loyalty.
That’s why we, at SailPlay, recommend combining your customer loyalty program with your communication plan. The easiest way to do this is by choosing a customer loyalty platform that provides you with a communication tool for email, SMS, IM and push notification campaigns. With a customer loyalty platform that includes a communication tool, businesses can use one solution, where information flows freely back and forth, instead of transferring information between multiple platforms, where there is an increased chance of problems arising. Additionally, businesses do not need to pay for another tool, helping reduce costs.
If your customer loyalty platform does not include a communication tool, then choose a third-party communication system that your loyalty platform can integrate with. We highly do not recommend to run 2 different platforms for loyalty and communication that do not integrate together. Businesses will run into countless issues, such as wasting valuable time by manually transferring information between the platform.
With this said, a business who combines their loyalty program with their communication plan can experience much higher engagement rates than previously. Our clients alone have seen 470% ROI on our communication tool, SailPlay Sender, as part of their loyalty program. A business’ communication plan should include personalized offers, targeted messages, reward announcements and triggered campaigns. These 4 activities can do more then increase engagement, they can help increase each customer’s lifetime value.
Most businesses attempt to incentivize their customers to increase their purchase frequency through sales promotions. The issue for customers is that these offers are not usually personalized to each of their purchasing habits. For example, a restaurant is sending all their customers with an offer regarding a discount on their seafood entrees, but 60% of their customer base doesn’t purchase seafood entrees. The offer holds no value to a large portion of their customer base. As a result, customers may look to visit another restaurant where they feel better matches their preferences.
With a combined customer loyalty and communication strategy, the restaurant should be able to track each of their customers’ purchases and send more personalized offers. With this example, only 40% of the customer base would receive the seafood entree, while the rest of the base can receive more specific offers.
The purpose of a customer loyalty program is to build on customer retention. With triggered campaigns, businesses can do just that. Businesses can reach out to customers automatically for specific purposes, ranging from abandoned online carts to up-selling complementary products/services to encouraging customers to make a purchase after a period of inactivity.
But the right customers can only be reached when the loyalty platform and communication tool are in the same solution or integrated. Only when information is flowing between the two tools, can triggered campaigns perform as needed.
Our experience has taught us that targeted messages can increase customer engagement by up to 30%. Most of the time, we have seen businesses send out mass campaigns where all their customers are being notified of a product launch. For example, a large department store is adding a new line-up of mascara. They sent out an email to their entire customer base with the announcement. The issue is most men in their base are not interested in this message and some women are not interested.
Segmenting their customer base through product purchases, preferences, socio-demographic data and etc. can help build a more targeted listed. In our experience, the less targeted messages are, the less likely are customers to participate in the loyalty program. Leading to more customers unsubscribing and visiting a competitor.
As customers in a loyalty program become eligible for rewards, businesses should alert their customers. Rewards are a strong method to increase customer rapport and build customer lifetime value. With that said, businesses should include reward announcements as part of their communication plan. Especially if a business is offering rewards that are perceived as high value to the customers, adding campaigns promoting their rewards to their customers provides an incentive to increase customer purchase frequency and other non-purchase actions.
Your customer loyalty program should help your business increase customer communication, building long-term loyalty. Many customer loyalty programs have failed or are failing now because businesses forget to use their program as a method to communicate with their customers. Don’t run another failing customer loyalty program.
And for more tips on combining your customer loyalty program with your communication, please contact us by filling out the form below or email us at email@example.com.