Customer Loyalty Programs Always Pay Off

Adding new customers is several times more expensive for a company than keeping existing customers. And what’s more, loyal customers spend almost 75% more when they shop than new customers. Customer loyalty pays off, so companies need to think about how to keep customers engaged.

Simple points-based loyalty programs

“The easiest way to create a customer loyalty program is to design a simple points-based program – as the customers shop they collect points, which are converted into discounts, free goods or other bonuses,” writes HubSpot. The system should be simple and intuitive, because otherwise, instead of creating a positive experience, it becomes a headache for the customer. For example, telling the customer that “fourteen points equals one dollar, which will give a 50% discount on your next purchase of at least $20” is not a great motivator for making more purchases.

Points-based programs are well suited to companies that want motivate customers to shop frequently, without much advance planning. A good example is the loyalty program created by the cosmetics brand Sephora in the U.S. – with a loyalty card, the customer earns one point for every dollar spent, which can be redeemed for makeup products.

Multi-level systems

“Achieving a balance between the expectations of the customers and what they are being offered is the greatest challenge facing a company when creating a multi-level system that rewards customers and also motivates them to shop more,” writes HelpScout. One possibility would be to establish basic offers and then encourage the customers to reach beyond them – the value of the offers grow as the participants’ spending increases i.e. the higher the level of loyalty they achieve.

The greatest difference between a points-based system and a multi-level system is that in the latter the short-term and long-term values of the loyalty program have been differentiated. Multi-level programs work better with high-priced goods and services, and are suited, for example, to airlines and insurance companies. An excellent example is Virgin Atlantic Airways, whose frequent flyer club members can earn points, not only for the miles traveled, but also based on whether they are red, silver or gold members. In addition to collecting frequent flyer miles, Club Red customers get discounts on car rentals, airport parking, hotels and travel packages. Compared to ordinary customers, the Club Silver customers receive 30% more miles on every trip and are given priority when making reservations. The Club Gold customers receive 60% more miles, as well as priority boarding and debarking. An exclusive waiting area has also been created for them, where they can eat and drink or enjoy a massage while they’re waiting.

In order for such a system to work and the customer to be loyal to the service provider, the program must be easy to understand – what benefits does the customers get when moving to the next level, and are the benefits worth the effort they have to make to achieve that level.

Partnership networks

It makes sense to cooperate with other companies in order to offer customers more than just your own products and services. Monitoring the customers, their daily lives and shopping habits will help determine which businesses should one partner with. For example, a company that sells dog food may choose a veterinary service or pet care and grooming salon as a partner. By doing this, the customers see that they are cared about; as well as being offered something that is important to them. In addition, cooperation will help to increase the company’s customer network by added customers from the partner enterprises.

A good example is American Express. It has a large network of partners throughout the U.S. and the Plenti program allows customers to redeem their bonus points at many different points-of-sale, from clothing stores to phone service providers and car rental companies.

Playful Communications

Who doesn’t love to be entertained? Why not help your customers to play in a way that also strengthens your brand image? To keep the customers from feeling that the game is only meant to build the company’s brand, a) their chances of winning must be real and b) the rules should be simple. Therefore, this type of loyalty program is suitable for almost any business. For buyers who like to be entertained, the program helps make the shopping experience more fun and interesting.

For example, people who register their locations with the Swarm app (software that allows users to share their locations with their friends) are provided discounts by the businesses they are logged onto. For instance, they can get a 20% discount coupon from an eatery. In addition, by displaying your location, you can participate in raffles for prizes, such as dream vacations or shopping trips.

Create sales campaigns and transform Erply into a powerful marketing tool!

You can create a number of loyalty programs in Erply that will encourage your customers to make more frequent and larger purchases.the customers buy more:

Sales campaigns. Create a sales campaign, set the rules that the customers must fulfil to get a discount (for example, making purchases that total a certain amount to get a percentage- or amount-based discount), and then implement the sales campaign.

 

Customer points. Loyal customer points can be collected in Erply. You can set whether they are valid for a limited period or have no time restriction. There are two ways for customers to use the points. Those who have collected a certain number of points can be added to a customer group that receives a permanent discount. Or, you can create a sales campaign that requires a certain number of points – and based thereon gives the customer an amount-based discount.

 

Pricelists. Various pricelists can be created in Erply. They can include permanent time restrictions and linked to a store/warehouse, customer or customer group. Special prices can be added to the products, a specific product group can be discounted, etc.

 

Gift cards. Gift cards can be used to pay for purchases. This is a good way to give gifts. For example, your company can reward its employees or customers with free gift cards.

 

Coupons. When customers make purchases for a definite amount, individual sales coupons will be issued – clients can then use these during a sales campaign.

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