As a 21st century company, you should know the importance of having a loyalty program. If you’re looking to start a business, you should understand that loyalty programs are what you consider engrafting into your business. Incremental marketing are a great example of this.
If you’re yet to develop a loyalty marketing strategy, this article will serve as an insider’s guide to creating a well-optimized loyalty marketing strategy. Here, we’ll be looking at the different types of marketing programs and some tips you can use to create a loyalty and reward program that allows your business to thrive amidst the competition. So, you can grab a cup of coffee as you read, as this will be a long and exciting read.
What is a loyalty program?
Companies offer customer loyalty programs to their loyal customers to encourage loyalty and long-term business. Loyalty programs can come in the form of coupons, merchandise, coupons, or even pre-released products.
Having said this, we’ll be discussing the available types of loyalty programs. These programs we’ll be discussing can be used for different models. Some businesses are better off sticking to a single optimized loyalty program strategy if it has worked for them for a long period.
Point-based loyalty program
This is loyalty program deals with the earning of points and happens to be the most common type of loyalty program in the business world. However, most times, most companies use it wrongly, and it fails to work for them; how?
When customers have been so patient to earn 14points via a particular loyalty program only to realize that it’s equivalent to just $1, they get so pissed and might likely decide to patronize your competitor.
Now, if your competitor has a better loyalty program and your ex-customer finds it more rewarding, he/she will become a loyal customer to your competitor. What we’re trying to get at is that you should think twice before using a Point-based loyalty program.
If your points can’t be redeemed as good cash, you may want to reconsider using this strategy. As a tip, this loyalty program type works best for businesses that encourage frequent short-term purchases.
Tiered loyalty program
If you can’t seem to strike a balance between attainable and desirable rewards, then one program you want to leverage is the tiered loyalty program. This program helps you to implement a tiered system that rewards initial loyalty and motivates customers to buy more. Upon joining the program, ensure that customers are giving small rewards as a foundational offering for being part of the loyalty program and encourage repeat buyers by increasing the value of the rewards as they climb up the loyalty ladder.
This type of loyalty program helps in solving the potential issue of members forgetting about their points and never bothering to redeem them. This is because the time between purchase and gratification is too long.
VIP Loyalty Program.
Yes, loyalty programs are meant to break down barriers between customers and businesses, and you will be right if you’re thinking we are seriously telling you to charge them a fee. In some situations, customers can pay a one-time annual fee that allows them to bypass common purchasing challenges.
Once you identify factors that may instigate your customers to leave, you can customize a fee-based loyalty program to solve those issues. For instance, you probably abandoned your online shopping cart after tax and shipping you were calculated, but what you didn’t know is that this happens to be a frequent issue for online businesses.
So, to solve it, you might offer your customers a loyalty program similar to that of Amazon Prime. Amazon Prime uses a loyalty program that allows customers to pay an upfront fee and automatically get free 2-day shipping on orders.
Aside from the free 2-day shipping, they also get awesome benefits like movies and free books.
Value-based Loyalty Program.
Factually, understanding your customers’ demand that you are able to identify the desires and values of your target audience. By so doing, you can encourage customer loyalty by targeting those traits. While many companies may choose to offer promotional coupons and discount codes, some businesses will likely find greater success in resonating with their target audience.
This resonation can come from offering values in ways unrelated to money. On the good side, this gets to build a unique connection with customers fostering loyalty and trust.
Partnership loyalty program
This type of loyalty program is performed by some companies coming together to form a partnership. However, if you must go for this type of program, you should do your research to know which company would be a good fit for a partnership. The reason for this research is to know if the company has something that will supplement or help your customers’ everyday life needs and wants.
For example, if you happen to run a dog food company, you may want to partner with a veterinary office or pet grooming facility to offer co-branded rewards or deals that are mutually beneficial for your partner company and yours.
When you offer your customers relevant value that surpasses what your company alone can provide them with, show them that you relate to or understand and care about their goals and challenges, even those you can’t solve a loan.
Besides, this helps to grow your network to reach your partners’ customers too.
Game-based Loyalty Program.
Everyone loves to play good games. In this regard, you can decide to turn your loyalty program into a game to encourage repeat buyers. With any sweepstakes or contest, you run the risk of letting your customers know or feel like your company is jerking them around to win business. To reduce this risk, make sure your customer doesn’t feel like they are being duped out of their rewards.
Ensure that the odds aren’t lower than 25% and important requirements to partake in the game should be attainable.
We the type of loyalty programs we’ve discussed, you should know the one that will benefit the business you are looking to start.