What is loyalty marketing?
This expression can be described as a strategic approach to marketing that focuses on incentives. These incentives are built to retain existing customers, build the relationship and reach customer loyalty. In other words – specific marketing efforts that make the customer like you more and more and keep coming back.
Loyalty marketing strategies include using incentives that reward the customers for coming back and make them want to come back again.
Read more: How to manage loyalty in retail
Why is loyalty marketing important in retail?
To be fair, the answer to this questions should be: Why wouldn’t you work with loyalty marketing? We know you’ve heard this oldie but goodie before: “80 % of a company’s business comes from 20% of their customer base”. That’s why it’s so incredibly important to nurture the relationship you have with your best customers! To strategically work towards increasing the number of loyal customers is a huge win for your retail business. And we’ll keep the reminders coming: Acquiring a new customer cost up to seven times as much as keeping an existing one!
Get started with customer loyalty marketing
There are many ways you can work with keeping your customer happy through incentives. A lot of retailers still work with monetary incentives, like reward points that the member collects. But instead of giving 20% off a random purchase when the member reaches a specific amount – maybe try doing it as Sephora does in their Beauty Insider program. They give the member different options and let the member choose their reward and they have certainly succeeded in building brand loyalty.
The point we’re trying to make is that the absolute best way to work strategically with loyalty marketing is through a loyalty program. Because first of all, when a customer signs up to become a member, you get their contact information. And voila! You’re able to communicate with them and work towards activating them and engaging them. You also get a clear overview of all your member behaviors and can work strategically with segmentation and personalized communication. And, if you choose a smart enough platform (like Voyado) you can work with predictive scoring like churn scores and CLV – that are included in the platform.
Start or renew a loyalty program
A loyalty program is basically the definition of loyalty marketing – since it’s built on incentives of different kinds to keep your customers coming back. But depending on your business, the way you build your loyalty program will differ. The first step, even if you’re starting a new or want to update your loyalty program, is to set up a master plan – also known as the strategy.
Set up a strategy
This is where you ask yourself and all your colleagues a bunch of questions. For example:
- Why do we want to do this?
- What do we want to achieve?
- Who is our target audience?
- How will the customers benefit from this?
- Which customer values are we promoting?
- What do we need in terms of platforms and tools?
- What should the tonality be like?
- Discuss the look and feel of the program
- How should we work with data?
- What should the recruitment process look like?
- Who do we need to involve from our organization to do this?
Read more: Retail loyalty program – a comprehensive example and concrete tips
After strategy comes building the loyalty program
Once you have put together a strategy, it’s time to start building your program! In this video, we’ll go through how to do it step by step:
- How to plan for the strategy
- The buildup processes
- Tips on how to recruit new members
Watch the video “How to optimize or create a loyalty program that stands out”
Involve the right platform early in the process
When you have started building the strategy and planned for your loyalty program, it’s important to bring in a platform in the early process. Because the platform might offer features you haven’t even thought about in your plan! And your strategy and the platform have to match – for obvious reasons.
If you want to learn more about how to build or renew your loyalty program with Voyado – schedule a 15 min call
Take advantage of your social media accounts
Another great way to work with loyalty marketing with incentives is through your social media accounts. Here are a few examples of how to use them:
- Contest and giveaways – encourage your followers by throwing different contests where the followers for example comment why they should win and tag some of their friends. Or involve giveaways to get even more engagement!
- Share positive feedback – give your followers something extra by having them share their positive experiences with you.
- User-generated content – allowing your followers to create their own content including your product is a great way to spread the word about your brand. The prize for the best picture or text can be a promotion on your official social media account.
Tip! You can also use your social channels to find new members to your loyalty program. Read more about Voyado’s solution for Facebook look-a-like audiences.