Why loyalty programmes are paying off for retailers
Higher customer loyalty, more transactions, increasing turnover – these are just three of the many good reasons why modern retailers rely on loyalty programmes. And studies by Accenture and Comarch prove them right: compared to non-members …
… members generate up to 18% more revenue,
… spend up to 57 % more per purchase and
… buy 3.5 times more often on average.
And best of all: as a retail or e-commerce company, a successful loyalty programme not only increases your turnover, but also customer loyalty and satisfaction. And you turn your customers into convinced product and brand ambassadors.
From the first purchase to a long-term customer relationship
Customer journeys do not end with the purchase. On the contrary: the first purchase is the moment when your joint journey with your customers begins. Awareness, consideration and conversion are ideally followed by loyalty and advocacy. If you succeed in continuing your customer relationship for as long as possible, you will not only increase your customer lifetime value (CLV) and thus your revenues, but you will also end up with loyal ambassadors who eagerly recommend your products and brands.
The first purchase
The first purchase is a crucial moment in the customer lifecycle that you should definitely take advantage of. Whether a customer comes back depends, among other things, on whether they have the opportunity to collect loyalty reward points with you. This is why loyalty programmes are so effective. Once the sign-up is done (preferably in a few clicks), you can show your new brand enthusiasts what else you have for them: exciting content on social media or in your newsletter, for example. The more touchpoints, the better. And the more original, the better: ever thought of surprising first-time buyers with a print mailing?
Almost every company has customers who spend more than others – either because they are enthusiastic about more expensive products or because they come back more often than others. Such high customer loyalty should be rewarded and a loyalty programme makes it easy for you to show your VIP customers how much they mean to you. In addition to more personal communication, offer them exclusive benefits, invite them to special events or create an exciting community around your brand. Over time, this will create a trusting relationship that will turn your VIP customers into convinced brand ambassadors.
Your customer data will tell you which existing customers deserve a higher status. Based on this data, you can not only award loyalty points, but also give special awards or badges. We tell you which strategies work best in our checklist: 5 steps to a successful loyalty programme.
Make the most of your data
One of the most important benefits you enjoy with a loyalty programme is the data you collect. In the age of digitalisation, the possibilities that this data opens up for you are versatile and promising. However, they also entail risks, which is why you should follow three rules when implementing your customer loyalty programme:
- use your data smartly (keyword: single source of truth)
- connect your channels (keyword: omnichannel marketing)
- concentrate on first-party data (keyword: cookieless future)
Use data smartly
As a rule, a loyalty programme only works if you bring together all the data you collect about your customers and their behaviour in one place – regardless of the touchpoint. Every sale, whether digital or in-store, and every relevant contact, whether in-person or virtual, should be captured in a central system in a timely manner. Because these data points and their relevant analysis form the base for your loyalty programme. You can use it to segment customers in order to address them as personally as possible.
In times of digitalisation and omnichannel marketing, companies today can no longer afford to exclude channels across the board or to play them separately. A consistent customer experience is particularly important for successful customer relationships, especially in the context of a loyalty programme. Thanks to direct mail automation software, even print mailings can be managed like a performance channel and seamlessly integrated into the customer journey. Give it a try and find out how you can best reach your customers.
Collecting first-party data
It’s been on everyone’s lips for a while now and is much sought after in view of the impending cookieless future: first-party data, i.e. customer data that you collect via your own channels. And what is the best basis for generating as much first-party data as possible? A well-constructed customer loyalty programme. This way, you can personalise your marketing measures in the future even without third-party cookies and make your brand fit for a future without cookies.
As an essential part of your marketing strategy, loyalty programmes enable you to activate your customers on a regular basis – for stronger customer loyalty and more sales in the long term. For this to succeed, a loyalty programme must be set up properly, but not become a separate microcosm. This is the only way to achieve true omnichannel marketing with high added value.