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Learn more about the 6 best practices to help you build a loyalty program that fosters long-term relationships with your customers and promote repeat purchase.
Loyalty program is often one of the core tactics of businesses. A well-planned loyalty program can significantly improve customer loyalty and subsequently boost their profits.
According to a study conducted by Bond, 71% of consumers claim that loyalty programs are a meaningful part of their brand relationships. However, not all loyalty programs have successfully built a long-term and steady relationships with their customers.
In this blog post, we will share some best practices and strategies to build the loyalty program that helps you turn first-time customers into lifetime customers.
A loyalty program is one of the essential businesses strategies to not only attract and retain repeat customers but also build loyalty with an existing customer base.
Loyalty programs inspire more than half of consumers to make repeat transactions in order to keep building points and rewards. Over time, these repeat customers spend more per transaction and will even buy more expensive products/services because of the established trust.
According to a Harvard Business Review article by Frederick F. Reichheld and Phil Schefter, “ increasing customer retention rates by 5% increases profits by 25% to 95%.” Over time, the cost of acquiring new customers will also decrease due to increased positive word-of-mouth driven by loyal customers.
There are several ways you can develop a loyalty program strategy. Simplicity and desirable incentives will be crucial to the success of your program. Consider the following loyalty program best practices to get started.
Consumers nowadays expect personalized services and product recommendations. To achieve that, businesses need to collect enough customer data to know their preferences. Loyalty program is not only an excellent way of collecting customer data but more important a perfect place to make use of the collected information.
Loyalty programs often require customers to take photos of their receipts to gain loyalty points. Many have receipt scanning technologies and Intelligent Document Processing solutions like FormX to make the data process more efficient.
FormX does more than simply converting scanned images of receipts into machine-editable texts. With the help of AI technologies, FormX can understand the context of the data and generate structured data that can be directly used for further processing or analysis. Within just a few seconds, businesses can see accurate details about the customer’s transaction.
Over time, these transactions will indicate patterns enabling a business to provide a more personalized shopping experience. The more you can tailor the experience to the customer, the more customer satisfaction increases, leading to increased transactions and loyalty.
Research shows that offering immediate gratification is the best way to get someone to join. Consider offering a discount on the day’s purchase when a customer signs up or offer a free gift with purchase.
According to Forbes and Bond, “87% of consumers are open to brands monitoring details of their activity if it leads to more personalized rewards.” So, determine what motivates your customer and make it part of the signup offer.
Don’t lose a loyal customer over a cumbersome registration process. If the signup process for the loyalty program leaves a negative impression, you won’t perpetuate repeat business. Moreover, “the average consumer belongs to 14.8 loyalty programs but is only active in 6.7 of them.” You want to start on the right note that puts your business in the active category.
In today’s highly digital and mobile-friendly world, you can have customers join in three simple steps:
Be careful not to ask for too much personal information during the signup. This can detour consumer trust and interest.
Once signed up, make it simple for the customer to continue participating in the program.
A flexible program can offer benefits to you and the customer. Consider allowing current loyalty program members to transfer points to another customer. In doing so, you can increase customer satisfaction and the potential to acquire new customers.
If rewards have expiration dates, consider what flexibility you will offer for late redemptions. If your reward is a coupon, it may entice customers to come in and spend money they wouldn’t otherwise spend. Plus, flexibility, in this case, will increase customer satisfaction and appreciation.
Another opportunity for flexibility is to diversify the loyalty program incentives. Try different things over time to see what increases immediate response or more frequent transactions. If you notice a loyal customer has not purchased in a while, you could even offer a “We miss you” incentive.
Suppose the loyalty program enrollment required the customer to download an app, you would have the benefit of sending push notifications about sales, personalized offers, and customized reminders.
When it comes to keeping customers happy and engaged, you have to be creative. Consider other businesses or industries that complement what you offer. How could you work together to increase customer satisfaction and achieve higher revenues?
However you decide to collaborate with your partner, make sure it’s mutually beneficial to the businesses involved and appealing to the customer.
Word-of-mouth marketing can go a long way. People trust products and services recommended by friends and family. Consider how you can reward customers for writing positive reviews, sharing social media content using your products/service, or making customer recommendations.
Scale your referral to the type of industry you are in. For instance, major credit card companies offer incentives to current customers who make a referral. A cash bonus is applied if a friend/family member opens a credit card. Can you modify this strategy for your business?
Or maybe something on a smaller scale is a better fit. Provide a free product or gift to a consumer that will be a brand ambassador. Have the ambassador do a social media review or tutorial.
Whichever strategy you choose, you will benefit from having satisfied customers act as walking billboards to help promote your business.
Once you have established customer loyalty program best practices, be prepared to optimize your efforts over time. You must pay attention to what yours customers need and what they are most receptive to. More importantly, make sure your strategy is rooted in a software solution that simplifies the experience for you and the customer.
A solution like FormX is ideal for loyalty programs that use receipt images. Consumers can easily gain loyalty program by taking a photo of the receipts, making the process quick and easy.
Once the receipt is uploaded, data extraction is automated. The receipt image is more than a digitized receipt; it’s converted fields of structured data pairs that can be integrated with other systems your business may use. Ultimately, FormX offers a valuable way for businesses to reduce costs and improve operational efficiency.
Prepare to roll out a loyalty program that will help your business boom. Schedule a demo with FormX today.