By Adela Belin
Today, every brand has its own customer loyalty program. Whether you are a retailer or restaurateur, it has become imperative to have a loyalty program to reward and retain customers.
However, having a loyalty program should be more than a tick-box exercise. Your loyal customers need to derive value from it and truly feel special. After all, customers love to be rewarded, and it costs anywhere from five to 25 times as much to attract a new customer than to retain an existing one, so you make sure you do it right.
The question is no longer whether you have a loyalty program—it’s whether you are maximizing its potential to meet your business goals.
So, if you have a loyalty program and are wondering why you are not reaping the benefits you expected to, it might be time to reevaluate. Here are six common loyalty program mistakes you should avoid to stay ahead of the game:
1. No differentiating factor
Ask yourself, what is different in your loyalty program? Why should customers sign up for it? What are you doing differently for your loyal customers?
The “differentiating factor” occurs at two levels: one is differentiating your loyalty program from your competitors’ and second is differentiating your loyal customer base from the rest and making them feel valued.
The most common mistake businesses make is rolling out a “run-of-the mill” loyalty program. Your customers are likely to engage with your competitors, too, hence, you need to offer them something unique enough that keeps them coming back for more.
As per the 80/20 marketing rule, approximately 80% of profits are earned from the top 20% of your customer base. This shows you need to design meaningful, personalized offers that set your loyal customers apart from the rest. Best Buy does a good job when it comes to differentiating high spenders from the rest. It has created membership levels (My Best Buy, Elite, and Elite Plus), each of which have different benefits to offer.
It is also important to not get complacent and be left with a stagnant program. Constantly innovate and come up with interesting new offers to keep up with your customers’ buying behaviors and to better their experience.
2. Too complicated
From the onboarding process to redemption, the key is to keep it simple. The simpler your loyalty program is, the more effective it will be.
Starting with the registration form, don’t make customers fill lengthy forms and ask for a heap of information. The best way is to allow users to login through their social media accounts. This easily gives you access to their information without them having to fill it out.
The whole point of a loyalty program is to reward your customers, so make sure you genuinely reward them—whether it’s via cashbacks, exclusive discounts, special previews, or free gifts. Did you know that the number one reason behind people abandoning loyalty programs is because it takes too long to earn rewards? Look at Banana Republic, for instance. Customers can earn up to 5 reward points for every $1 spent, and for every 500 points earned, they get rewarded $5 and a host of other benefits. How simple is that?
Published at Sun, 16 Dec 2018 18:12:21 +0000