How An Effective Loyalty Programs Works?
First, loyalty programs are ubiquitous — in fact, the average household has memberships in 29 loyalty programs. Second, they work: Overall, customers from loyalty programs produce 12 to 18% more incremental revenue growth every year than non-members, the study report found.
But with millions of loyalty points going unused, loyalty programs could be significantly better and deliver more value for businesses. Exactly 77% of buyers state they`re more fickle with their loyalty than before, making it even more of a challenge to keep them fulfilled. In fact, "satisfaction" and factors, for example, reliability and low costs aren`t as viable as they used to be at generating loyalty. Today, you have to go above and beyond.
Key Features of Effective Loyalty Programs
What features of loyalty programs are best with customers?
59% of customers are loyal to brands that give them discounts, gift vouchers and special offers to reward their loyalty. You likely already do this; simply make sure you`re tracking which offers get the best results and generate the most benefits.
41% of customers are loyal to brands that enable them to personalize products. Offer loyalty program members free customization, for example, engraving an item or special ordering custom-colorsneakers.
41% of customers are loyal to brands that present them with new experiences, products or services, while 51% are loyal to companies that reliably have the "latest" products available. Create special experiences for your loyalty program customers, for example, a VIP sale, early access to sales or early access to new items.
Around one-fourth of shoppers are loyal to brands that partner with famous people or "social influencers, for example, popular bloggers or YouTube personalities.
Family and Friends
42% of customers are loyal to brands their families and friends work with. Offer loyalty program people a reward for getting friends or family to join, as well.
42% of customers are loyal to businesses that involve them in designing or creating new products or services. Enlist your "VIP" customers to help pick which new products your store will deliver.
Beyond the Features of Effective Loyalty Programs
Accenture offers the following tips for taking full advantage of your loyalty program:
Monitor ROI:Review the expense of current loyalty programs and make sure the ROI justifies the investment. Maybe you can eliminate of certain parts of programs or change the rewards to either cost less or produce more sales. For example, rather than giving free gifts or gift vouchers, create a value added services rather, similar to free personal shopping services, free gift wrapping or a year-long return window rather than 30 days.
Think beyond Pounds: Don`t simply concentrate on getting loyal customers to spend more. Loyal customers have additional value beyond sales: They`re also a decent source of new customers. Focus on retaining the happiest customers and getting them to share their options with new customers. The greater part of the most loyal customers in the study actively recommends brands to other people; 14% express their loyalty by freely endorsing or defending the organization via social media.
Understand what Millennials want: With regards to loyalty programs, Millennials care more than other age groups about connecting with organizations through multiple channels, celebrity partnerships, exclusive offers and personalized loyalty rewards.