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According to Accenture, up to 90% of companies now operate some sort of loyalty program, while this number continues to increase incrementally year on year.
However, it’s fair to say that not all loyalty programs have been created equal, and execution is undoubtedly key if you’re to make such schemes work successfully on behalf of your venture.
But what are the main advantages of using loyalty programs, and how can you leverage them successfully in your business?
What are the Benefits of Loyalty Programs?
In purely descriptive terms, loyalty programs represent a personalization in marketing strategy that’s designed to incentivise customers to spend their money with a particular brand or business.
Through this strategy, customers are rewarded for making a fixed number of purchases or spending a predetermined amount of money, with the rewards tailored depending on the nature of the business and the behaviour of customers.
Ultimately, a loyalty program is used to encourage and reward purchases, with this translating into an increasingly loyal consumer base that makes repeat buys over time.
This also makes it easier for businesses to retain existing customers and increase the average lifespan of each individual consumer while building on existing relationships and fortifying these in the B2B marketplace.
Of course, loyalty programs also offer considerable advantages to consumers, who can benefit from bespoke and tangible rewards when they spend a fixed amount or complete a fixed number of purchases.
This can also create a more satisfying consumer journey and one that makes customers far more likely to recommend a business to their peers.
Creating an Effective Loyalty Program for Your Business
When it comes to implementing your customer loyalty program, the most important thing is that you focus on tailoring a rewards scheme that suits your unique brand and its visual identity.
There are several facets to this, with one of the most important being visual. More specifically, the colour pallet and tone of voice that presents the award must be consistent with your brand’s visual identity, in order to drive awareness and recognition across the board.
With this, your rewards program should also be as easy to understand as it is bespoke, utilising a simple structure that resonates with customer satisfaction. Coffee shops such as Costa have this down to a tee, by offering a free beverage with every eight that you purchase as a customer.
You can also create tiered schemes that enable customers to equate points as they spend, ensuring that a large number of consumers are represented and able to participate while spending within their individual means.
The Last Word – Rewards Schemes Done Right
There are several good examples of effective loyalty programs, including SkinyDip’s own innovative efforts.
This scheme was built on effective customer service and designed to reflect the unique service of the brand, providing travel accessories as rewards and creating tiers based on familiar language such as ‘check-in’, ‘ departure lounge’ and ‘take-off’.
Retail fashion brand H&M have also implemented successful loyalty programs, which rewards customers for being sustainability-conscious and affords them points for bringing in their old bags and recycling unwanted clothing.
Each of these things reflects the brand’s core green mission, and perfectly embody what H&M stands for in the modern age.