Since it costs more to acquire a new customer than to keep a current one, it’s important to focus on getting your current customers to shop with you as much as possible.
This is known as retention marketing. According to Neil Patel, 78% of customers believe that businesses that consistently create content are interested in building good relationships.
Also, a research study further revealed that 61% of U.S. consumers have bought something based on recommendations from a blog.
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Furthermore, your current customers spend 67% more than new customers. Meaning they are very relevant to the existence of your business – in a nutshell, you should hold and pamper them in a logical way.
Loyalty scheme is an utmost program where companies reward customers who have consistently patronized the brand, product or service. It is a way the company offers exclusive products, promotions, or pricing for repeated patronage.
Usually, this reward might come as merchandise, coupon or a customized product.
Every country and business might have differing views on their customer loyalty scheme. Here in Nigeria, based on the scope of the business, that will determine the type of customer loyalty scheme the organization may deploy to reward its customers.
For example, Airtel Nigeria a mobile phone service provider is presently having a promotion for its loyal users called Red Hot promo. Basically, you are expected to recharge your mobile phone to enable you gain some points. Once you reach a certain point, then you are eligible to win millions of Naira’s.
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Their own customer loyalty scheme deals with earning points before you get rewarded – some other companies will prefer to have a raffle draw, while others will prefer to reward all their customers probably at the end of the month, year or quarterly.
It all depends on the organizations preferred customer loyalty scheme method. Since the launch of loyalty schemes, businesses have struggled with implementing the right loyalty program to increase customer retention.
Some companies focus on providing the best rewards. Others focus on making the program easy to use even if the rewards are small.
A few even charge a fee for participation. When companies successfully implement a customer loyalty program, the results are tremendous. In fact, successful loyalty program can increase a brand’s market share by 20%. However, over time companies introduce more rules to their program, making it overly complicated. Ultimately this leads to reduced customer loyalty.
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In this post, I will be giving you some reliable customer loyalty scheme that will help you grow your customer retention base in Nigeria. To get started, here are some ideas for your customer loyalty scheme that might work for your business.
Points programs to reward customer loyalty
Loyalty point programs let customers accumulate points that they can redeem for rewards or free products/services. They’re so easy to set up that 73% of loyalty programs are points based, making this the most popular type of loyalty program by far.
A lot of ecommerce businesses struggle to get customers in the virtual door. If that’s a problem that’s keeping you up late at night, referral marketing can help. And you can take that to the max with points-based loyalty programs.
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Not all points are tied to money transactions – some may be earned from social sharing, emails, or other actions customers take to drive traffic to your site.
In fact, your loyalty program shouldn’t be purely transaction-based. Get your best customers to send you more business and reward them for helping you
In spend programs; customers get loyalty credit for the amount they spend at your business. You can use similar discounts without an upfront email capture to keep customers coming back, but you’d lose out on a lot of valuable information (and a captive audience!).
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This kind of program is very easy to understand, create, and maintain. They’re an effective way to cut your churn rate and increase transaction amounts.
Tiered customer loyalty schemes
An improved version of points programs, tiered loyalty programs give customers rewards based on different levels of spending or points.
They are growing quickly in popularity because they can be highly targeted and customized easily, and customer segments can be target pre and post-payment. In some tiered programs, customers are offered gifts, free products or services, privileges, or exclusive products.
Paid customer loyalty schemes
Paid loyalty programs provides an exclusive feel by incorporating a monthly or yearly fee that members pay for access to special services, discounts, or unique opportunities.
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Although the customers these programs draw may require more coddling, the increased transaction value is substantial. The program’s barrier to entry draws prospects further into your marketing funnel, and provides an incentive to continue making purchases on your site.
Punch customer loyalty schemes
One of the simplest and oldest loyalty program designs, punch programs are extremely popular in brick and mortar businesses, but their adoption in e-commerce isn’t as prevalent.
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The idea behind punch cards is that customers are rewarded for purchasing a particular product or service with punches.
One punch is given per purchase. After a set number of punches are collected, they receive a product or service of equal or lesser value free of charge.
Partner with another company to provide all-inclusive offers
Strategic partnerships for customer loyalty (also known as coalition programs) can be super effective for retaining customers and growing your company.
Which company would a good fit for a partnership?
Again, it boils down to fully understanding your customers’ everyday lives and their purchase processes.
For example, if you’re a dog food company, you might partner with a veterinary office or pet grooming facility to offer co-branded deals that are mutually beneficial for your company and your customer.
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When you provide your customers with value that’s relevant to them but goes beyond what your company alone can offer them, you’re showing them you understand and care about their needs.
Plus, it’ll help you grow your network to reach your partners’ customers, too.
Scratch the program completely
Considering how many marketers offer loyalty programs, one innovative idea is to nix the idea of employing a program altogether. Instead, build loyalty by providing first-time users with awesome benefits, hooking them in, and offering those benefits with every purchase.
This minimalist approach works best for companies that sell unique products or services. That doesn’t necessarily mean that you offer the lowest price, or the best quality, or the most convenience; instead, I’m talking about redefining a category. If your company is pioneering a new product or service, a loyalty program may not be necessary.
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Customers will be loyal because there are few other options as spectacular as you, and you’ve communicated that value from your first interaction.
For example, one of the most innovative companies on the planet implements this strategy: Apple.
Even the most loyal Apple customers don’t get special rewards or discounts because it doesn’t offer them to anybody.
Apple enchants customers by delighting them with a product or service the very first time. Apple has plenty of supporters, both online and offline, ready and willing to rave about its product. For them, loyalty happens organically.
As with any initiative you implement, there needs to be a way to measure your marketing success. Customer loyalty programs should increase customer happiness and retention, and there are ways to measure these things. Different companies and programs call for different analytics when rolling out loyalty programs.
Rewards and loyalty strategies should be viewed as means to an end, with the end being a superior experience that is informed by data and designed to address individual needs to the best of the company’s ability. When done well, they can keep customers coming back for repeat purchases, potentially turning a passerby customer into a loyal brand advocate.
When done wrong, however, they can be a huge waste of time and resources, becoming a tiresome burden for customers who have no interest in getting involved with the program.
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