The average American household has enrolled in more than 18 customer loyalty programs, according to a study done by research firm Colloquy.
Customer rewards programs are one of the best and most successful ways to build brand loyalty and boost sales, but that doesn’t mean they are always effective at influencing customer behavior and support. In fact, of the roughly $48 billion in reward points and miles issued annually, at least one-third goes unredeemed by consumers.
So how can you build a customer loyalty program that helps you stand out from the competition and drive more sales? When choosing the best program for your brand, there are several points to consider.
Determine Your Goals
Customer loyalty programs come in many shapes and sizes. A cafe might issue a coffee punch card that offers customers an occasional free beverage. A clothing company might institute a points-based system that gives shoppers access to exclusive discounts.
Whatever your loyalty program looks like, it should focus on achieving a specific goal. Consider what is most valuable for your brand. Do you want to boost sales, build stronger relationships with existing customers, or introduce new consumers to your brand?
When starting to build out your customer loyalty program, you’ll also want to consider how you will reward recipients. Will it be through physical or virtual means? Either way, will the rewards be generic, or will you add a level of customization to feature your brand logo, colors, and messaging? Thinking through these questions will help you create a more cohesive program and one that works to improve the overall customer experience.
Provide Meaningful Rewards to Your Customers
A successful customer loyalty program is one that addresses your customer’s needs, and one that is not being offered by your competitors. When it comes to giving customers the rewards they want, most brands are falling short; sixty-two percent of consumers don’t believe that brands are doing enough to reward them.
So, what makes customer incentives worthwhile and unique?
Today, consumers are regularly plugged in, with more and more of them shopping from the palm of their hand. It makes sense that they expect their loyalty programs to be available wherever they are.
A recent study by market researchers called “The Future of Rewards: How Consumers Value Rewards and Incentives” shows that 78% of respondents prefer rewards delivered instantly to a mobile device.
Instant rewards delivered to any device create an easy-to-redeem scenario that keeps customers coming back for more. Remember how we said at least one-third of rewards go unused by consumers? Breaking into the digital space can considerably reduce the number of wasted incentives. Seventy-one percent of shoppers say they would be more likely to use their loyalty cards if they could access them from their mobile phone.
Over 50% of U.S. consumers enjoy receiving personalized communications from retailers. Whether it’s an email addressing someone by name, curated suggestions that are relevant to the customer, or exclusive first-looks at new products, a little personalization can go a long way.
In an oversaturated and highly-competitive space, going the extra mile to study your customer’s preferences can significantly change the course of your sales. Recent research found that 79% of customers only consider brands that show they understand and care about “me,” and 56% are loyal to brands that deeply understand their priorities.
Personalized rewards sent directly to the recipient convey that you value their support. Let your customers know their reward is from you — and not an impersonal third-party — with a card design that matches your brand’s aesthetic.
At Virtual Incentives, we customize rewards to further your brand’s mission and enhance the association between the recipient’s rewards and your company.
Not all of your customers are the same, which means their rewards shouldn’t be either. When you offer customers flexible incentives that they can use in various scenarios, you are showing them that you care about their needs.
Take our Virtual Visa Card, for instance. Not only is it familiar, but it is universally accepted at online merchants worldwide, meaning your customers can use it wherever they please.
When you don’t limit where and when the recipient can use their reward, you create a more specific and personalized experience that keeps them loyal to your brand.
Measure Your Success
While you might have a significant number of customers enrolled in your loyalty program, that doesn’t mean they are necessarily taking advantage of their rewards. Only 24% of shoppers use the rewards they earn, and 38% of shoppers say they never know if they have rewards available.
Throughout the customer incentives lifecycle, you should consistently track your program’s performance to ensure that it is enhancing the customer experience and deepening your relationships to last long beyond the point of purchase.
When you offer rewards through Virtual Incentives, you can easily monitor and track your loyalty program’s success. With Vi Now, our enterprise-class management portal, you can track how much you’ve issued in rewards for a specific loyalty program, how many recipients have received them, and all of the transactions they’ve made.
We’re always here to help you create the best customer reward options for your brand. Talk to a rewards expert today to learn more about our incentives opportunities.