Personalize Your Customer Loyalty Programs

Personalize Your Customer Loyalty Programs

How You Can Profit from Personalizing Your Customer Loyalty Programs

In the world of competitors, companies strive to achieve customer satisfaction. According to SDL, “brands lose an average of 65%” of their revenue for every failed customer experience. The emergence of customer loyalty programs is helping to curb this statistic.

While every loyalty program differs amongst organizations, the premise is similar: implement a marketing system dedicated to rewarding purchasing behavior. As a result, businesses gain loyal consumers willing to spend money on their merchandise and services.

The habits and needs of consumers continually change. So, don’t expect the same from the loyalty marketing industry. Offering an old-school stamp book isn’t going to appease or excite today’s tech-savvy customers.

In this digital age, consumers understand that brands track them. In exchange, they expect to receive timely rewards based on their personal tastes and preferences.

It’s time to think beyond keeping your customers semi-happy. Instead, aim for well-crafted loyalty programs that can set your business apart from the competition.

The Importance of Customer Loyalty Programs
Focusing your team’s time and energy on new business development opportunities might not be the best option for your company. It costs five to ten times more to acquire a new customer than to retain an existing client.

Moreover, “the average spend of a repeat customer is a whopping 67 percent more than a new one.” Customer loyalty programs give you the chance to sell more products to your current customer base.

A customer-centric reward system can launch your company to a whole new level. From customer retention to brand advocacy, these programs open doors to analyzing customers’ behaviors, changing prospects’ perceptions, and enticing inactive consumers to purchase again.

However, challenges can arise if your organization approaches customer loyalty incorrectly. The damage usually stems from not understanding your customers’ needs.

For instance, until 2005, Subway’s loyalty program included a stamp card system. The program gave customers options to earn free meals after attaining a specific number of stamps. The fast food chain saw an increase in counterfeit stamps and the fraud became unmanageable.

So, Subway changed their program to a points system. Yet, it offered little value to the purchaser. A customer had to spend $75 just to get a free $5 foot-long.
That’s why companies are taking note and moving to digital rewards programs. They offer increased security and tracking, something that a paper stamp card can’t provide.

Action Step: Retain existing customers by starting or improving your customer loyalty program.

Where Personalization Fits
Based on a report by CapGemini Consulting, “only 11% of loyalty programs offer personalized rewards based on a customer’s purchase history or location data.” The gap lies amongst the 28% of customers who feel very satisfied when they receive a personalized experience.

Several companies are missing a chance to connect with their consumers. Personalization lets you segment your customers and satisfy them according to their individual needs and preferences.

In order to give your customers the best rewards, learn more about their behaviors by collecting data. Tie together their online and offline activities to create targeted marketing strategies.
This will equip you to give relevant rewards and shopping experiences.

The privacy backlash is one of the main reasons for the personalization gap. Consumers send mixed signals when it comes to retrieving data. See the graphic below. It’s probably best to survey your customers and sell them on the benefits of gathering personal data.

Mixed Signals Marketing Privacy

Source: L2

Shoppers desire status, value, quality and experiences. Discounts are pretty low on their list of priorities. The best companies create loyalty programs that don’t involve discounts or price reductions.

Create memorable experiences. Send an email including a digital gift, or mail a small premium to the shopper on his or her birthday. Give them the VIP customer service treatment: prompt callbacks or no waiting lists. In addition, remember to always address the consumer by name. Keep the vibe fun and positive.

Action Step: Focus on personalizing your rewards program to fit your customer’s behaviors.

Your Competitive Advantage
Findings from the 2015 Bond Brand Loyalty Report show that consumers are enrolled in 13.3 loyalty programs on average, but they’re only actively participating in 6.7 programs. So, how can your company earn a competitive advantage with active participants?

The primary drivers of a successful loyalty program include understanding, segmenting, personalizing, and optimizing. First, gain intelligence around your customers’ actions. Segment customers based on their shopping and consumption activity.

Next, construct relevant omni-channel communications to motivate your customers. Finally, measure campaign and engagement activities to increase the program’s effectiveness.

Your loyalty program should be free from unnecessary hassles. Rules of the program should be easy-to-understand. Let your customers monitor their loyalty accounts via a mobile app or send them regular emails. Here’s an email example from Smoothie King:

Smoothie King Email

The “Surprise and Delight” concept also works well with loyalty shoppers. Everyone loves a little extra, especially when they don’t expect it. Promote occasional gifts “just because.”

Panera Bread’s MyPanera program does a great job implementing this tactic. Customers earn freebies on a random reward schedule. So, it’s always a pleasant surprise when the cashier tells you that you earned a free pastry or drink.

In the end, don’t assume you offer generous rewards. Ask your customers for feedback on how you can improve your programs.

Action Step: Build a loyalty program that will rival your competitors’ offerings.

The Rewards of Great Service
Customer loyalty revolves around offering great service and rewards to your buyers. Here are two great examples from Coca-Cola and Amazon:

MyCokeRewards is one of the largest loyalty programs available around the world. Coca-Cola reached out to Ifeelgoods seeking to galvanize their current loyalty program. The goal was to offer Coca-Cola customers rewards they love.


With the Ifeelgoods platform, Coca-Cola integrated gaming currencies into their MyCokeRewards program. Participants collected points via a code on Coke bottle caps.

By logging into the MyCokeRewards website, customers could use their points to receive gaming currencies and share the experience on social media channels. As a result of these digital rewards, Coca-Cola increased their redemption rate by 18X.

Take the untraditional route and charge an upfront fee to join your loyalty program. The one-time expense should allow customers to avoid purchasing barriers and inconveniences.

Amazon has dominated this type of loyalty program. For an annual fee of $99, Amazon Prime members receive free, two-day shipping, access to unlimited streaming of movies and TV shows, and other cool benefits.

Amazon Prime

Analysts estimate Amazon loses over a billion dollars per year on Prime. However, the eCommerce giant recoups these estimated losses with an increase in transaction frequency. Prime members spend an average of $1,500 per year, while non-members only spend $625 annually.

Action Step: Create a rewards program that will benefit your customers and your profit margin.

Loyalty Lies in Differentiation
It’s cheaper to engage and retain your current customers than constantly convert new prospects. That’s why customer loyalty programs should be included in your marketing strategy.

Differentiate yourself from the competition by offering personalized digital rewards programs. Provide value to your customers and exceed their expectations every time.

To increase your revenue, give your customers the rewards they deserve.