Do you know, as per a Neilsen study, nearly 84% of the buyers are more likely to stick to a brand that has a customer loyalty program?
Why a customer loyalty program?
Step into the shoes of a customer. Think of the last time you made a purchase because you had 100 credits to spare. Rewards play on the typical human emotion; that of accumulating benefit. And what’s better than getting rewarded for shopping?
Setting up an online store is quite easy. That’s the reason a typical consumer has at least 10 brands to choose from every time they need to make a purchase. And each of these brands are doing their best to attract this consumer’s attention and nudge them towards making a purchase. Including setting up loyalty programs.
That is where the importance of understanding what a consumer wants from a customer loyalty program comes in.
The novel your program and the closer it is to what motivates a consumer to make purchases, the better are your chances of grabbing their attention and nudging them to participate.
So what’s the first step to creating a kick-ass customer loyalty program?
Understanding what a customer loyalty program is.
What is a customer loyalty program, really?
Customer loyalty refers to how willing a customer is to not only make purchases from your brand, but also stick with it and recommend it.
Now, a customer loyalty program is simply rewarding the customers for being loyal to the brand. However, these rewards should be such that influence the buyer to avail and publicise the brand’s products and services.
These rewards can be in the form of free merchandise, discounts, store credits, rewards, and more.
Customer loyalty programs are not just a great tactic to bring back customers for more purchases, but also a smart move to capture their purchase behavior. You get to understand what products they’re looking for, which products they wanted to avail loyalty benefits on before the purchase and just how many points or credits it took them to come back finally!
To attain loyal customers, you have to become a part of their lives. You have to understand their psychology.
Take a look at the Marks and Spencers product range. They aren’t really that pocket-friendly. But they have a base of loyal customers who keep going back for more.
That’s why we decided to dig into some of the best customer loyalty programs set up by industry leading brands and the 3,300+ Shopify stores we work with. In this article, we’re sharing every little best practice they have followed to make their customer loyalty programs a success – and how you can do it too!
Customer loyalty program best practices (vetted by Shopify experts)
1. Brand your customer loyalty program
You’ve spent days or even months setting up your store’s look and feel to suit your brand. Then why let your customer loyalty program sound mundane?
Your customer loyalty program needs to stand out. But at the same time, it needs to help you with brand recall – if a shopper can’t relate who the customer loyalty program belongs to, how do you imagine them coming back to make purchases?
Give your loyalty program a look and feel of your brand. But more importantly, choose a name that makes the shopper feel like they’re being a part of some exclusive club.
For instance, Marks and Spencer’s calls their loyalty program Sparks. The tagline ‘More for You’ itself speaks out why you should subscribe to the program. It speaks directly to the customer and gives a straight massage; the more you indulge with M&S, the more you will be rewarded. Simple, exciting, and effective.
2. Offer store credits to consumers
Rewards and points are passé, store credits are in. Just like your Shopify store design, it is time for you to upgrade to the new-gen customer loyalty program!
When you offer store credits to a customer for buying again from your brand, you’re automatically indicating that they can be encashed in the next purchase. Having an in-store credit is like having your own credit card with the brand that you can use to make purchases at a discount that is exclusive to you.
For instance, you just made a purchase from brand A. It offers you 10 store credits on that purchase. Now the brand’s customer loyalty program states that each credit equals one dollar. This automatically means that you get to avail $10 off on your next purchase by using these credits.
Think from the shopper’s perspective. Wouldn’t this be much better than collecting points and then calculation how much you can redeem?
And you don’t need to tie a purchase to awarding store credits. Your loyalty program can include other actions that you’d like the customer to take – sign up for your newsletter, set up a customer account, write a product review, drop product ratings, share their birth date with you and more. So basically, you’re using store credits in your customer loyalty program to boost on-site engagement.
There are two wins here. One, you’re able to nudge the customer to share more information about them. Two, you’re able to nudge them to make a purchase.
3. Add a sense of urgency
You’re creating a win-win situation for customers and yourselves. But waiting on them to use their credits at ‘some time in the future’ is a bad idea.
There are still a number of stores that are offering massive discounts and maybe even better deals on similar products. Your customers still have the chance to make a purchase from them. And you don’t want that happening!
Adding an element of urgency in discount coupons has been an age-old practice. Bring that forth in your customer loyalty program as well.
For instance, you can set an expiry date to the store credits a customer gets rewarded. Let them know that the credits will expire at a said date from the point they were earned – this is ideally the time period when you want them to come back for a repeat purchase.
You can create a reward cycle for this. Send constant and creative reminders on emails, web push notifications and other channels to continually remind the customer of their store credits and their expiry date.
This strategy works because you create FOMO in the customer’s mind. Who would want to miss out on being able to redeem store credits to purchase a product they loved?
4. Build a community around your customer loyalty program
Encourage your customers to not only purchase from your store, but also be a part of your community. When promoting your customer loyalty program, make sure you’re nudging the shopper to make other interactions with your brand – like following you on Instagram or sharing their recent purchase with a branded hashtag.
This does two things for you. It engages the customer on a deeper level with your brand. And it works as word of mouth marketing for your brand, helping you reach similar consumers faster – and at a lower acquisition cost.
A good example here can be Gym+Coffee, the athleisure clothing brand which has created the hashtag #MakeLifeRicher and involved its customers in using it whenever they step out in the brand’s clothing. The result? The brand’s customers are sharing their adventures and stories using the hashtag, thus becoming a part of the brand’s community and spreading a positive word of mouth for it.
This enables the brand to utilise user-generated content to its advantage.
Another thing to pick from the brand is the hashtag. It’s simple and connected to the brand; in this case, it’s tagline itself. The whole concept of the brand was to break the barriers and remove the intimidation connected with trying something new. They knew that if a community tries something, together, that fear of being alone no longer exists. Hence, the tagline which further became a community program.
Pick a hashtag which is connected to your brand’s name or reflects its idea, and at the same time puts forth your story. It should be easy and relatable.
5. Run your loyalty program both offline and online
This is especially important for brands that have a retail store as well. You can’t just be running a customer loyalty program online – your offline customers deserve to be rewarded as well!
Bridge the divide between online and offline, literally. Take the example of Sephora. You can walk into their store, make purchases and redeem store credits on their online store as well. It’s like having the same experience, irrespective of how you choose to interact with the brand.
Using this practice, you’re basically ensuring a great repeat shopping experience with your brand.
6. Never leave questions unanswered
Information is key – especially when it comes to rewards that a customer can redeem on their purchases. Consumers are sensitive that way! So make sure there are no doubts around how your customer loyalty program works, how they can be a part of it, the terms and conditions to redeeming rewards and more.
A good idea is to keep a tab on the queries that come in on your website or social media accounts. Address the questions in the best way possible, and make sure the answers are available to anyone else joining the program too. A smart move here would be to create an FAQs section for your customer loyalty program.
Sephora knows how important this step is to their customer loyalty program’s success. They have an extensive section on frequently asked questions around it. Check it out here!
7. Promote your customer loyalty program consistently
Customer loyalty programs are not a set and forget it strategy. If you want customers to participate or join your program, you need to promote it consistently. They need to be reminded that a program exists and the benefits it offers them – a simple banner or addition to the navigation menu is not enough!
You can do this by ensuring that posts promoting your customer loyalty program are a part of your social media marketing calendar. Additionally, you can also include a link to joining your loyalty program in the newsletters you send – it will act as a subtle reminder to the subscriber.
To further boost your customer loyalty program’s reach, consider running ads on it. You can retarget your store visitors or social media followers to start with. These are people who know about your brand already. So nudge them to join the program to avail ‘rewards’ or earn more store credits for their next purchase.
Brands also use their customer loyalty program to reach out to new shoppers. Letting an online shopper know the benefit of purchasing from you, is also a good hook to grab their attention.
Do you need a customer loyalty program?
As per an Invespcro article, the worth of a loyal customer is 10x their first purchase. Nearly 83% of the customers agree that it is owing to a good customer loyalty program that they stick to a brand and make continuous purchases. Not only this, but most of these loyal customers also spend more in the 31-36 months of their loyalty program and not in the first six months.
All in all, these stats just prove how important customer loyalty is, and how it can be retained by introducing customer loyalty programs.
So if you ask us, a customer loyalty program is the one way to ensure you don’t get lost in the increasing volume of stores online. It’s the one way to keep your customers engaged and coming back for more – no matter what offer is being made to them by others!
Do you have a customer loyalty program in place?