Loyalty programs are an extremely effective marketing strategy for businesses across all types of industries. The advent of digital technologies has made loyalty programs even easier to customize to your business and your customers. Loyalty marketing programs are not a new concept. In fact, the phrase “token of appreciation” comes from the rather common practice from the late 18th and early 19th century of distributing tokens that could be used to redeem in-store merchandise.
Loyalty programs have evolved from their early iterations, but the basic tenet remains the same: reward customer purchasing behavior and incentivize them to stay loyal to the business or brand. Despite the concept’s relative simplicity, implementing a successful loyalty program requires a great deal of expertise.
Why Run a Loyalty Program
Want proof loyalty marketing programs work? Here are some facts to consider:
- Loyal Customers Buy Big. The Center for Retail Management at Northwestern University recent study found that although only 12 to 15 percent of customers may stay loyal to a solitary retailer, this small group generates anywhere between 55 and a whopping 70 percent of a business’s sales. That’s an impressive amount of revenue being churned out by a small percentage of consumers.
- Existing Customers Cost You Less. Not only do loyal customers spend more, they also cost your company less. A February 2013 article by Forbesmagazine argues that holding onto an existing customer is seven times less expensive than the cost of acquiring a new one. Thus, while a cohesive loyalty marketing program may require an initial investment for start-up and implementation, this amount is a drop in the bucket when compared to the advertising expenses of finding new customers. And, with proper loyalty program management, those costs can be adequately controlled and yield a favorable return on investment.
- Customers Love Them and Use Them. A Harris Interactive Poll found that there are approximately 11 loyalty programs for each adult in the United States—that’s 2.6 billion loyalty programs. From 2012-2014, loyalty program membership increased 26.7 percent over two years. Additionally, 67 percent of adults in the U.S. reported that they would be willing to exchange basic personal information in exchange for better service or products.
Not all loyalty marketing programs are created equal, and building your loyalty program is not something that should be left to the inexperienced. After all, loyalty programs are engaging your most active customers. This is not a group you would want to risk losing because of an ill-conceived and ill-executed marketing program.
Gamification and Loyalty Rewards
This isn’t about building games. Gamification is about applying game-based thinking towards motivating and engaging your customers. Traditional marketing ensures that a marketing message reaches a target audience, but it acts as a one-way street. While traditional marketing builds awareness of the brand, it does not aid in customer engagement. To increase a brand’s stickiness with its targeted audience, companies can utilize a wide range of engagement tactics. Online promotions, and especially loyalty programs that incorporate gamification strategies, are especially effective engagement tools. SLANT is a leader in using gamification to meet, and often exceed, marketers’ goals and objectives.
Loyalty Programs as a Data Source
The secret success behind loyalty programs is how much data they provide about your customers. By measuring and analyzing this data, your company can better predict future consumer buying habits, which can fuel rewards and promotions. This shifts you from the role of merely selling a product to engaging with a consumer and encouraging repeat buying. It is also the path that moves a generic business into a recognized and remembered brand.
Why Choose SLANT Marketing to run Your Loyalty Program
We recognize that when it comes your company’s marketing goals and objectives, it isn’t a one-size-fits-all business. We are experts in using the principles of gamification to craft and implement comprehensiveness, effective, and personalized loyalty programs that are tailored for your target customer and meet your company’s growth goals. Among loyalty program providers, our track record of success makes us stand out from the competition.
At SLANT Marketing we excel at crafting effective, memorable, and innovative campaigns for our clients. Want to become another one of our successes? Contact us today to discover what we can do together.