This article is part of our unPredictions series — no guesswork, no lofty trends, just real commerce marketing priorities to help you drive customer engagement and increase growth and revenue in 2022.

Retaining customers might just be the most profitable thing your brand can do.

Loyal customers buy more at higher values, and they’re also more willing to tell others about your brand because of their positive experiences. Win after win after win.

Yet 70% of CX leaders have a tough time orchestrating loyalty programs that stick, according to Gartner. Furthermore, 77% of loyalty programs with a solely transactional model fail within the first two years. The failures aren’t because of disinterest — people love their loyalty programs. Loyalty programs only fail when they miss the mark with customers. 

The flipside is that your loyalty program will succeed when you make personalized experiences the consistent hallmark of your brand throughout the customer lifecycle.

Running an Experienced-Based Loyalty Program

Running a loyalty program doesn’t automatically translate to sacrificing your profit margins — although for many, that’s what they think of first. Loyalty is much more than that. Loyalty

stems from your entire relationship, the way the customer experiences your brand at every touchpoint in their journey with you.

Long-term relationships with customers allow you to collect more zero- and first-party data, which you can then use to create more personalized interactions. When you tailor one experience after the other, you set a high standard that your competitors will find hard to match. Your customer will then remain loyal as long as you continue to meet their need for that high level of personalized experiences.

Go on. Spoil your customers rotten with personalization. Spoil them to the point that they turn up their noses at lesser experiences. It’s a great way to hit your goals and make your competitors cry.

With consolidated data and a unified, 360-degree view of your customers, you have several loyalty tactics at your disposal to make their lives more convenient and rewarding:

  • Provide proactive notifications. Let customers know about product launches and upcoming events, when their wish list items drop in price, when an item is back in stock, and shipment progress.
  • Make targeted product recommendations. Suggest products that align with or enhance their past purchases and direct them to content related to their interests.
  • Offer targeted promotions. Make the right offer to the right segment, such as a 30% discount for a high-tier spender or limited-time free shipping for someone who abandoned a cart.

“What has been really rewarding to see since starting using AI is that we saw an increase by 10% in our average basket value on a particular set of customer lifecycles. But we also won back 24% of the customers that were likely to defect. So for us, the numbers were really incredible because for anyone that knows BrandAlley, they know how many emails we send to our base on a daily and weekly basis. So being able to alter the way we target this communication is to make sure that we don’t jeopardize the inbox placement, the IP addresses, and so on, but also continue to send really powerful communications was really the key to the success.”

Alexandra Vancea Quote
Alexandra Vancea
Head of Marketing, Brand Alley

Offering Value Exchanges Your Customers Will Love

Loyalty, whether between two people or between a person and a brand, is built in part by a mutually beneficial relationship. Marketing teams must build interactions that are based on a fair exchange of value for value.

Value exchanges are a great way to generate first-party data, and they build trust because you show that the customer can rely on the brand and will always walk away feeling satisfied.

When you’re ready to start exchanging value like it’s going out of style, here are a few ways to do it:

  • Give them the royal treatment. Extend your loyalty program beyond points by offering things like VIP events or priority customer service.
  • Invite them to subscribe to what they love. Create subscription models for products and services so customers can either make their lives easier or treat themselves to something special on a regular basis.
  • Build community around your brand. Building a community or club allows you to, for example, get customer input on products in exchange for early access or samples.
  • Have a little fun! Deploy quizzes, games, and surveys that are engaging to customers and revealing to you about their preferences.

“Create value through engagement and relevance. It’s not just a transactional mindset that e-commerce businesses have. Now more than ever, consumers will gravitate toward digital even for pre- or post-purchase experience from awareness to consideration to post purchase… how do first-timers perceive the brand… you’ve got to be thinking about creating value and loyalty from start to finish.”

Rick Alameida
Rick Almeida
Vice President E-Commerce, PUMA

Rewarding Your Loyal Customers

If you haven’t already started, today’s the perfect day to begin rewarding your loyal customers.

Rewards might mean accumulating points and free or discounted products. Many brands find such programs very successful. Points and prizes can be especially important in review and referral programs, which reward your loyal customers and help generate new business at the same time.

However, points don’t always have to mean freebies or discounts that lower your margins. Rewards could mean:

  • Access to exclusive VIP events
  • Early access to sales or products
  • Access to premium content

Be sure to segment your customers in ways that will help you meet your business goals. You might segment customers based on whether they’re members of your loyalty program, their average order value, how frequently they purchase, or other metrics.

Putting Loyalty into Action

When it comes time to put your loyalty program into action — or if you’re re-evaluating an existing program for improvement — take these steps:

Step 1: Find Your “Why”

The first step to building a good loyalty program is to determine why your business needs a loyalty program. Oftentimes we will hear that the reason is to get to know customers better and to add visibility into the shopping experience. However, this is an outcome that can be achieved through a loyalty program. The reason behind the program should always be about adding value and building long-term relationships with your customers.

Step 2: Plan Your Value Exchange

While designing your program, consider the value that it will bring to your customers and whether that value is truly worth participating in the program. 

Although discounts are nice, they are not the only lever you can pull to incentivize repeat purchases. You can add value through exclusive access, early releases, sneak peaks, upgraded shipping, or other gifts/services.

Step 3: Align Your Customer Rewards

Evaluate the goal of the program and align fixed benefits and triggered benefits to ensure the lifespan of the program for each customer is in line with your overall goals. Consider the various segments of customers you may already be familiar with and tailor the milestones in the program to be achievable and engaging, but also challenging. Early incentives for signing up and completing their profile can be a great way to start the program off on the right foot. 

Make sure you also have incentives for your long-time customers so that the process is engaging for everyone. 

Making Loyalty a Priority

Brand loyalty comes at a price, and that price is respect. 

Brands need to respect their customers’ time and individuality by sharing only relevant, meaningful content. When marketers consistently provide a 1:1 experience along with value exchanges that make customers feel like VIPs, audiences will respect your brand and keep returning. Loyal customers go out of their way for the brands they love and they rack up those rewards as a badge of honor. All of this adds up to long-lasting relationships that drive repeat business and increased revenue.

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