You’re probably already aware you need a customer loyalty program. Loyalty is top of mind for many marketers. In fact, you and your marketing team — perhaps even your C-suite — have already discussed the need for a customer loyalty program, and are convinced of its potential value.
But with the vast number of other considerations your marketing team — and your brand as a whole — have to consider, you might not be prioritizing loyalty. In my experience, this is a mistake, because implementing and enhancing customer loyalty could very well have the most significant and rapid impact for your brand.
How Can Customer Loyalty Be Improved?
The priority for having a loyalty program must be raised within your organization. Although the reasons are myriad, I’ll share three that are most pressing, and sure to have the most significant implications for your work as a marketer:
- Loyalty enables you to identify more customers, more often
- Loyalty maximizes the value of your current marketing efforts
- Loyalty reduces the need for discount-based incentives
These reasons are compelling and urgent enough — in terms of boosting your marketing and driving better business outcomes for your brand — that even the most reticent members in your organization will be convinced that enhanced loyalty should be a top priority.
The most effective way to improve customer loyalty is simple — provide 1:1 personalization, enrich the customer experience, and enhance incentives.
Here’s how to do it:
1. Identify Your Customers for True 1:1 Personalization
Everything you’d like to do with your marketing platform — nearly any use case or form of personalized customer engagement — requires you to identify your customer. Birthdays, purchase anniversaries, post-purchase up-sell — none of these use cases are possible if you cannot identify your customer.
To clarify, when I’m talking about “identification,” I mean:
- For retail, you can identify a specific shopper offline (in your store) who would otherwise be completely anonymous, and then attribute shopping behavior and purchase history to them.
- For e-commerce and online retail, a shopper self-identifies (by logging in upon visiting your website), enabling meaningful data collection about their on-site behavior — even if they don’t make a purchase.
This level of identification impacts everything you can do (and would want to do) as a marketer to enhance customer loyalty and satisfaction.
Why Identification Matters for Retail
If you’re a retail brand, you know it’s incredibly difficult to connect the online and offline shopping experience for your customer if they can’t be identified. In fact, customer identification is one of the most difficult hurdles you face.
Customers don’t tell you when they’re coming to shop in your store. You don’t know how long it’s been since their last visit, and you don’t have a guess as to whether they’re coming back at all. If you don’t know who your customer is, if you cannot identify your customer, there’s virtually nothing you can do in the way of personalized customer engagement.
Loyalty is by far the most effective way retailers can get customers to identify themselves at the point of sale. Sending email receipts for in-store purchases isn’t enough. In terms of truly identifying who your customer is, what they’re buying, and how often, nothing compares to a loyalty program.
When you offer customers a retail loyalty program that they perceive as valuable and beneficial, they will join and identify themselves to you. They’ll use their loyalty membership for every purchase, every time, in order to reap the benefits. And you’ll know who they are whether they shop at your store or your website, enabling your marketing team to target the customer as an individual.
In essence, identification enhances your ability to personalize your loyalty program to the individual. Better personalization results in increased customer satisfaction, higher purchase intent, and improved customer loyalty.
How do customer loyalty programs help you identify more customers, more often?
Why Identification Matters for E-Commerce
Important to note, e-commerce brands face challenges in identification, too. Why? For one, they aren’t Amazon, they aren’t Facebook — so their customers aren’t always logged in.
The benefit that companies like Amazon and Facebook have is that their visitors are usually logged in the minute they hit the site, so they are readily identified early on in the shopping process.
But if you’re an e-commerce brand, you probably don’t have that luxury. Customers are on your website just… well, looking around, rather anonymously. Unless they’re ready to make a purchase, there’s no reason for them to log in and identify themselves. Many times they visit your website, browse, and then they’re gone.
And what did you learn about them? Nothing.
Loyalty programs can encourage customers to log in immediately upon visiting your site so they can get updates about their membership status, view any accrued points, and see what exclusive purchases might be available. Once they’re signed in, you’re able to collect actionable data about their behavior — data that enables you to deliver true 1:1 personalization.
One potential obstacle: If you choose to build a loyalty program into your website using an API, you might have to deal with convincing the customer to go through a separate loyalty login portal. To mitigate that, Emarsys developed the Loyalty Wallet — included with the Emarsys Loyalty solution.
Loyalty Wallet is a pre-built overlay portal that allows customers to sign in easily without friction. Customers see the pop-up, click, and they’re signed in. Even better: with the Loyalty Wallet, you don’t need IT for implementation. You can have a loyalty program integrated into your website in only days (yes, literally days).
- Identification is at the core of everything you do as a marketer. There are many reasons for having a loyalty program, but this is reason enough: a loyalty program is the only consistently effective way to drive identification, allowing you to identify more people, more often and enhance personalization efforts and loyalty.
2. Improve the Customer Experience By Integrating Loyalty with Current Marketing Efforts
As a strategy, brute-force marketing is less than effective. You can’t just add more and more until your customers relent — nor is that goal. That kind of approach is counter-productive, as it often leaves your customers feeling frustrated and annoyed, not appreciated and engaged. It also wastes time and resources.
Instead, consider the cliched but apropos adage of “quality over quantity.” Often times, the skill in being a good marketer comes down to your ability to enhance and improve the marketing you’re already doing, thus maximizing its value and improving the customer experience. Loyalty solutions that are effectively designed and implemented help you achieve this.
The Influence of Loyalty on Consumer Behavior
Loyalty programs have a meaningful impact on your customer’s shopping habits. Customer loyalty research from Forrester shows that, across multiple customer demographics, loyalty programs influence a wide range of behavior, including:
- Where a customer makes a purchase
- What they buy
- How much they spend
Knowing that customers are influenced by — and responsive to — these programs, you can implement loyalty and integrate it with your current marketing efforts to make your outreach more impactful. And a healthy assortment of rewards and motivators applied to your current use cases will drive customers to engage with your brand more often and across more channels.
What Successful Brand Loyalty Looks Like
We’ve seen this successful application of brand loyalty with Contorion, a German e-commerce business serving B2B craftsmen and B2C customers. Using Emarsys Loyalty, Contorion enhanced their current marketing efforts to achieve some ambitious goals. Within one month of launching their loyalty program, they saw:
- 5% more activity on the website
- 34% higher conversion rate from first-time to second-time buyer
- 12.7% higher average order value
- 62% more repeat purchases
By leveraging a loyalty solution that was fully integrated into all of their marketing, they were able to create true omnichannel personalization.
Many factors went into Contorion’s success, but one of the ways the company drove these important metrics was by enhancing their current campaigns with loyalty-based calls to action and rewards. This allowed the company to maximize marketing efforts they already had in play, opposed to over-investing resources into developing a scattering of new campaigns.
To be candid, not all loyalty programs will yield these kinds of results in one month. Part of the reason for Contorion’s rapid success was because of how quickly the Emarsys Loyalty solution can be implemented — it only takes days, and there’s minimal IT work, if any, required. This won’t be true for most other loyalty programs, which often require a longer lead time and more IT involvement.
A well-designed and integrated loyalty program is the link between identification, your customer data platform, and marketing use cases. It’s what allows you to create specific treatments for specific campaigns. More personalization amplifies the use cases you already have in play. You shouldn’t have to deploy more and more use cases when, instead, enhancing your current ones (with more specificity and targeted actions) results in a better return on investment.
- A loyalty solution that is fully integrated into your platform will help you maximize the value of your current use cases and be more exacting in how you engage your customers, all while reducing the amount of operational overhead you have to contend with as a marketer — giving you better results without extra effort.
3. Offer Exclusive Experiences for Loyal Customers
“Discounts are destroying our margins!”
I hear this all the time from brands. The problem is, marketers as a whole have trained consumers to wait for and respond to discounts and discount-based coupons with Pavlovian precision. Now, customers are addicted. The result: There is something akin to a discount epidemic in the e-commerce and retail world.
Fortunately, loyalty programs are an effective antidote. Actually, they might be the only antidote.
That’s because loyalty-based incentives are essentially the only way to create a driver that is not a discount. Think about it: If you aren’t using price as a motivator, how do you inspire a customer to take action?
Well, with a loyalty program, you can shape drivers for your members that are not based on discounts, and instead, are based on other factors that are much more emotionally exciting. Members-only experiences, exclusive access to sales and products, special invitations to partner events — these are all achievable through loyalty.
Generating Excitement with Incentives
What’s more exciting for your customer? An email that offers a 5% discount if they shop in the next 48 hours or an email with a special link to a limited-time t-shirt exclusive only to those in the loyalty program?
There’s something about getting an exclusive product offer that no one else besides loyalty members can get that is inherently more exciting than a discount, and, let’s face it, more worthy of a well-earned humble brag on social media. The goal here is to deploy incentives that appeal to customers on an emotional level to generate excitement.
Full Integration Means More Incentive Options
A fully integrated loyalty solution like Emarsys Loyalty allows you to create offers and incentives that will actually get your customers fired up. Birthday points, upgrades, exclusive product offers, pre-sale access, VIP customer care — these loyalty-based drivers can incite customers to take action and impact customer lifecycle, all without using discounts as the motivator.
Don’t get me wrong, discount-based drivers still have an important place in your marketing efforts. Customers absolutely respond to discounts. But you shouldn’t rely on them. Driving purchases with non-discount incentives, like the kind you can deploy if you have the right loyalty program, means you can preserve your margins, and thus, increase revenue. With these types of incentives, you’re also exciting your customers with exclusive offers and 1:1 personalization which will lead to increased customer loyalty and retention.
- You want to be able to create more value while reducing the discounts you’re giving. A loyalty program is the only way to drive your marketing use cases without having to rely on discounts and hurt your margins. It’s also the most effective way to create incentives that are actually emotionally exciting for your customers.
Need help getting organizational buy-in for a customer loyalty program? Read the Customer Loyalty Whitepaper.
Enhancing customer loyalty comes down to three things: personalization, customer experience, and incentives. If you’re able to offer individual customers what they want (and what they don’t even know they want) on a consistent basis, you’ll be set up for success. The ability to attract and retain brand loyalists is a direct result of a comprehensive loyalty program that masters these three keys.
If you’re a marketer, you want to prove that marketing directly and positively impacts your company’s bottom line. You want to implement measures that can enhance customer engagement while bringing in more revenue. Loyalty does this by helping you better identify your customers, maximize the value of your current marketing, and reduce discount-based incentives.
However, to get the most out of loyalty, you need to seek out a solution that is fully integrated into your marketing efforts.
The Emarsys Loyalty program is built directly into the Emarsys platform. If you’re an Emarsys customer, this means it’s already connected to your customer data. We did this so marketers could easily enhance their current marketing to produce measurable business results, and do so with minimal involvement from IT. In other words, we designed Emarsys Loyalty so that, for anything a marketer would want to do with loyalty, they can do it without talking to IT first.
Loyalty needs to be a top priority for your organization. Of any initiative you take this year, deploying a loyalty program will have the most meaningful and direct impact on revenue, customer lifetime value, and overall growth. And if you already have a loyalty program, you must ask: Is it fully integrated into your platform? Is it enhancing the customer experience? Are you seeing a return on your investment?
From a brand perspective, a well-designed, fully integrated loyalty program isn’t just good marketing — it’s good business.