Best Loyalty Programs For Small Business – A customer loyalty program, or rewards program, is a customer retention strategy that encourages customers to continue to buy from your brand rather than a competitor. Read on for examples of the best loyalty programs.
Sometimes you have to give customers a reason to keep buying from you. To build customer loyalty, companies offer special discounts to customers who make regular purchases. This strategy is called a loyalty program.
Best Loyalty Programs For Small Business
If executed well and with the customer at the center, loyalty programs can help your customers feel good about buying from you. There are many types of customer loyalty programs that can increase customer engagement. The option you choose depends on your mission, your product and your goals for the rewards program.
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A customer loyalty program, or rewards program, is a customer retention strategy that encourages customers to continue to buy from your brand rather than a competitor.
Like personal relationships, customer relationships develop when both parties feel they are getting something beneficial from the connection. Customers give you their support when they buy from you, and in return, loyalty rewards like discounts and freebies ensure that they get something in return. Here are eight benefits of a customer loyalty program:
And if that’s not enough, here are some statistics that prove the importance of loyalty programs.
The goal of most loyalty programs is to retain customers, increase customer lifetime value and demonstrate customer appreciation. But each type of loyalty program works differently. For example, rewards points programs allow customers to redeem points for discounts or gifts, while membership programs reward customers when they make a donation.
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Read on to learn how these programs work and see examples of the best in the game.
Points programs are the most popular types of customer loyalty programs. They are effective because points are easy to earn and redeem. Customers can exchange credit points towards their next purchase, discounted services or available gifts. Customers can track points programs with a loyalty card, online account or mobile app. Because many brands use a points program, it is easy for customers to recognize. They understand how to take advantage of them and it is a seamless experience. For example, Marriott has a popular customer loyalty rewards program called Marriott Bonvoy Benefits. Travelers can redeem points for free hotel nights, meals and other experiences. They can also earn points for car rentals and flights, share points with friends and family, and get free Wi-Fi and special rates. Personalization has been key to driving Marriott brand loyalty. The benefit of rewarding customers using a points system is that it allows Marriott to analyze customer behavior and use customer data to create a better tailored experience for each customer. The more the company knows about its customers’ preferences, the more it can offer personalized rewards.
A serial program starts with a points program that allows customers to earn rewards with every purchase. Serial programs are like video games. When you complete a spending level, customers can unlock a new level that gives them access to more and more benefits.
Serial programs can align with your brand marketing strategy. To create an element of exclusivity, you can have a set of “diamond level” customers. Customers at this level will be able to earn exclusive prices for more expensive products and services. This will encourage your customers in the lower levels to try to reach the next level of spending. The more exclusive the reward, the greater the customer appeal. DSW, the popular shoe retailer, has announced its VIP customer loyalty program for Canadian customers in 2019. The levels are designed based on consumer behavior and include rewards such as free shipping and points extra for shoes that don’t need to be donated.
The Many Benefits Of Customer Loyalty Programs
The benefit of adding a rewards customer loyalty program at a level to a points program is a structure that customers can rely on for months or even years at a time. It gives them something to strive for.
Not all rewards programs focus on tiers and discount codes. If your company has a strong social mission, you may want to try a customer loyalty program with a reason.
Aligning with a mission or cause can build customer engagement and drive repeat purchases through your shared values. These programs can be most effective when partnered with a non-profit organization that has a strong connection to the company’s mission. Ben & Jerry’s creates social justice ice cream flavors and donates sales to charities that support animals, the environment, social programs and other causes.
A mission-driven customer loyalty program allows customers to feel that their purchase, big or small, is helping to improve the lives of others. Before starting this type of program, make sure your company’s values and mission are aligned. Next, identify organizations or causes that relate to your customer base.
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We’ve already discussed loyalty campaigns that offer customers points for every purchase they make. But how do you reward customers who spend more money in a shorter period of time? How do you encourage these customers to continue spending their money with you instead of going elsewhere? Spending-based customer rewards programs allow companies to identify high-spending customers. Airlines, in particular, are moving from points programs to expense-based systems. It allows them to dig deeper into frequent flyers who pay more for less flights. Azerbaijan Airlines rewards frequent flyers with travel points based on the base fare of each ticket.
Those travelers who achieve elite status early receive benefits such as free lounge access, early boarding and additional checked baggage allowances.
This type of program benefits business travelers who pay more for last minute flights to their next meeting or scheduled events. Recognize how often customers buy and how much they spend.
Gaming programs introduce an element of fun into the mundane task of making a purchase. Let’s look at Starbucks as a great example of a customer loyalty program based on gamification.
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Starbucks changed from a simple points program to a gamified approach in 2016. In addition to these changes, Starbucks recently announced new functionality to incentivize casual customers to become regular customers.
Before these changes, each customer was awarded one point for each purchase, regardless of the amount spent. The challenge was that the customer who bought a large iced vanilla latte and a slice of pumpkin bread got the same reward as the one who only ordered a tall cappuccino. With the game system, customers earn two “stars” for every dollar spent, rewarding those who spend the most money in the shortest time periods. However, it does not stop with stars. The recently introduced league level expands the points program, allowing customers to redeem their stars for items other than just cups of coffee, such as an extra shot of espresso or even select merchandise.
Customers play the game on a mobile app, which Starbucks also uses to alert customers to opportunities to earn extra points. Game loyalty programs encourage future purchases by making the points process more fun and keeping customers engaged.
Who doesn’t love gifts? Free benefits programs offer free products and services to loyal customers. Grubhub’s loyalty program allows customers to redeem ongoing offers, which can get them more than $400 in free food at any time. By doing so, the program helps its restaurant partners promote their restaurants on the app by introducing customers to places they have not tried.
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Amazon Prime is the holy grail of subscription-based customer loyalty programs. But you don’t need to be a tech giant to implement this kind of reward. Dirty Lemon, an e-commerce startup that specializes in lemonade with a kick, is offering a discount to subscribers — everyone else has to pay full price for their carbon lemonade.
Sephora’s Beauty Insider program offers customers a choice of gifts based on a points system. But it also offers something unique: an online community. The Beauty Insider Community is an online community where beauty insiders can ask questions, share their looks and exchange tips. Experiential rewards like Sephora’s online community add an emotional dimension and strengthen customers’ relationship with the brand.
Referral programs are a form of customer rewards that reward customers for referring their friends and family. They help turn loyal customers into brand advocates. Freshly’s referral program gives an existing customer $40 off for every new customer they refer, and that friend gets $40 off as well.
A paid loyalty program requires customers to pay a fee for loyalty benefits. DoorDash customers can become DashPass members for a small monthly fee. In return, they get free shipping to a wide variety of restaurants, so customers who use the app often end up saving on orders. Are you taking it with you? Paid customer loyalty programs only work when the value exceeds the cost.
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The most successful loyalty programs make customers feel like they are getting something. Cashback rewards give customers money or cash to spend on the business. This type of loyalty program is popular among financial companies. But Gap also gives customers Gap Cash to spend in store or online. Preferred Rewards Bank of America rewards customers with cashback when they spend money in
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