The cost of building customer loyalty programs - Deepstash

The cost of building customer loyalty programs

Suitable investments at the right time will always be beneficial. Balance the offerings with the cost of the program to ensure the value is symbiotic.

Your incremental revenues - your incremental costs = loyalty program cost.

The formula is based on the projections for customer response to the program. The incremental revenues include increased customer referrals, decreased turnover, and higher sales.

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MORE IDEAS FROM Building Customer Loyalty Programs That Work

Loyalty programs

There are 8 million online stores in the world. This means that there are more choices to choose from.

If you sift through the stores according to your unique criteria, including price, location and service, you may still end up with several stores you can choose from. If one of these stores have a loyalty program, they may sway you to order from them to gain additional benefits.

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In the United States, shoppers belong to 3 billion loyalty programs. But many business owners create mediocre loyalty programs so that they can tick it off their list. These undesirable loyalty programs are left unused and forgotten by consumers.

With so many e-commerce options for customers to choose from, customers gravitate towards the programs where they feel valued.

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  1. Connect customers with unexpected surprises.
  2. These perks should be tailored to the individual.

Most customers prefer a VIP experience. A 2020 survey found that free shipping and discounts are considered a low bar. "Early access to sales" and "early access to new products" were most valued, followed by "tailored offers and recommendations."

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A loyalty program that is just a collection of coupons is more harmful than not having a program as it reveals your low regard for your customers.

A loyalty program should foster value year-round.

  • A baseline inclusion is giving a perk on your customer's birthdays. View it as an opportunity to interact with your customers. 
  • Perhaps give them a 50% off coupon together with a fun birthday note. Or maybe provide exclusive access to content with a paywall or offer a voucher for a free item from your store.

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  • Personalised. Your program should not feel like a default for all customers. Instead, the program should feel tailored to each customer.
  • Unique. Ensure your programs looks and feels distinct.
  • Accessible. Build your program, then make it easy to access. Even loyal fans will lose interest if they have to complete too many steps.
  • Rewarding. Instead of reverting to the collection of coupons, consider free shipping, an extended window for product returns, or a discount on their birthday.
  • Consistent. Some loyalty programs start with enthusiasm, then fizzle out. Ensure that your program is consistent.

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RELATED IDEA

Multi-language support

Multilingual support - speaking in your customer's language - can benefit a company.

Research shows that 75 per cent of customers want to buy from brands that offer product information in their own language. While a company cannot offer all information in every language, extending the communication of the essential aspects in the native language can increase customer satisfaction.

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Different Types of Retail Traffic

Traffic refers to the number of people who comes into your store, including those who walk nearby. It is an important measure of retail success and naturally, the more foot traffic = the more chances there are to make sales.

The types of retail traffic include:

  • Regular Foot Traffic
  • Online Traffic

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Loyalty and Reward Programs

Millions of Americans are enrolled in loyalty or reward programs in hotels, supermarkets, drugstores and restaurants, and there are two major challenges:

  • As the outlets with loyalty programs tend to reward only the customers who are already loyal, the participation percentage is on the lower side.
  • Customers find it difficult to be loyal, due to other chains and outlets offering great discounts as well.

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