A customer rewards program are point-based loyalty programs that are used to increase sales, get customers involved, build loyalty, and turn casual buyers into brand advocates.
Customers today love reward programs, which is not a secret. The question is, what kind of rewards really get them to do what they say they will do? A lot of brands are just now realizing that reward programs are a powerful way to learn more than ever before about your customers. It’s a tool that hasn’t been used very much until now.
People might sign up at first because of discounts, but what keeps them coming back is a personalized experience based on the information they gave when they signed up.
And customers don’t want to give up anything when it comes to their experiences. They also don’t want to be given gifts or rewards that don’t mean anything to them. Instead, they want brands to give them what they want in terms of value and experience.
Here is a quick guide to customer reward programs to help you build a loyalty campaign that is more than just points and free stuff. But first, let’s figure out what we need to know.
Why Should You Spend Money on a Customer Rewards Program?
Too often, brands only care about getting new customers and don’t pay enough attention to the ones they already have. But if you can keep just 5% more of your customers, your profits can go up by as much as 95%.
The Harvard Business Review study shows that a strong rewards program makes customers more likely to come back.
Customers who keep coming back are especially important for small businesses because they keep the cash flow steady and spread the word about the brand. Let’s look at what a rewards program and customer referral rewards can do for you.
- You don’t have to compare prices.
Most stores can’t afford to sell items at prices as low as Amazon can. Instead, stores can appeal to a customer’s emotions by giving them rewards that show they care and make them happy. The more that happens, the more the customer feels connected to the brand, which makes them more likely to keep coming back.
- Do more to keep customers.
Since loyal customers tend to spend 67 percent more than new ones, it costs about five times more to get a new customer than to keep an old one. That’s why it’s important to give buyers reasons to keep coming back. This is where a well-thought-out rewards program can come in handy.
- Boost customer lifetime value (CLV)
This is the total amount of money you can expect to make from a customer in the long run. If you use customer data to make rewards that are well-thought-out and personalized, this lifetime value is likely to go up, which will help your bottom line.
- Make personal connections
Every customer is different and should be treated as such. With the right rewards program, you can make your customers feel like you appreciate them when they buy from you. This is a strong feeling that makes people want to buy from your business again.
- Make fans of your brand
Did you know that 92 percent of people trust recommendations from friends and family more than any other kind of advertising? By adding a referral feature to your rewards program, you can make your current customers feel special and encourage them to tell their friends and family about your brand.
Promoting brand advocacy is a great way to reach people who might not have heard of you otherwise.
Best Ideas for Customer Reward Programs to Get Ideas From
If you have never made a rewards program before, the best way to start is to look at brands that are already doing it right. Here are some well-known loyalty programs that keep customers coming back, each in its own way.
- Ben & Jerry’s
The famous ice cream brand keeps customers coming back by giving a lot to good causes. In addition to giving away gift cards without taking a cut, they often make limited-edition flavors with a social justice theme and give the money from those sales to causes they care about.
This kind of program makes customers feel good about how buying from the brand makes a difference.
The 17 million people who are part of their Beauty Insider Community can use the points they earn to choose their own rewards. These rewards could be discounts on products (since Sephora is known for its high-quality products), exclusive beauty tutorials, or makeovers to keep customers coming back for the long haul.
Through its loyalty program, the restaurant aggregator lets customers get up to $400 worth of free food. The app also suggests new places to eat that the customer hasn’t tried before. In this way, Grubhub’s app users will be more interested in its services and use the app more often, which will lead to a higher level of customer engagement.
- “Soiled Lemon”
This eCommerce brand that sells lemonade with a twist shows that Amazon is not the only company that offers subscriptions. Their subscribers can get lemonade delivered once a month or once a week at a discount, but everyone else has to pay full price.
The coffee chain was one of the first to start a loyalty program through a mobile app that has a large number of users. Customers have to use the app to pay for their orders in order to get points, free drinks, early access to new products, and more.
The customer loyalty program is also a good way for the brand to learn about how customers act, which helps the brand make its services and products even better.
There isn’t a full list of rewards programs that doesn’t include Amazon Prime. For an annual fee, Prime members get free one-day shipping on a lot of products, access to Prime streaming services, special deals, and more.
How to Make a Customer Rewards Program
Putting together a good customer rewards program comes down to the basics. Once you know what makes your customers tick, it becomes a lot easier. Here are some of the most important things to think about when making your new rewards program.
- Give the customer what he or she wants.
Your customers have no reason to put money into a program that doesn’t help them. Use the information you have about your customers to learn more about them and what makes them tick. With a tool like Xoxoday, you can find out more about your customers. Using this information, you can organize your catalog, send personalized messages about rewards, and talk to your target audience.
You can use the data you have collected to make buyer personas or you can do surveys to ask customers directly what rewards they would like. Also, social media monitoring is a great way to keep track of what customers are saying about your brand and, by extension, what they want to see more of.
- Choose the kind of reward.
You can choose from different kinds of customer reward programs. For example, there are the points system, the annual fee system, the tiered system, the partnering system, and more.
Choose the option you think your buyers will like best based on the data you looked at in the first step.
You can even combine two or more types to make unique customer loyalty programs, like one that lets customers earn points with every purchase and gives them access to better rewards as they earn more points.
- Choose which actions to praise
Through a rewards program, customers can earn rewards in different ways. You might want to get people to spend more than a certain amount of money. There may be certain products you want to sell.
You might want to thank customers who bought from you during a slow time. No matter what your goal is, you can easily give different behaviors different values and make sure your customers know how they can earn rewards through those behaviors.
- Use the right software for loyalty
Your customer rewards program should be easy for both your buyers and your support team to understand and use. You can choose from different options for something that isn’t too expensive and is easy to use. Make sure that the loyalty software works well with your current CRM and marketing platforms so that you can set up automated reward programs.
- Talk about your new program
Tell your customers as many ways as you can about the rewards program. Send out an email, post about it on social media, put up flyers and posters, or run a Facebook teaser campaign. Do whatever will reach the most people. You can also offer special deals to people who sign up early to get more people interested.
- Go omnichannel
Your customer loyalty reward program needs to reach both people who buy from you online and people who buy from you in person. Find out where your customers like to shop the most and think of ways to bring them in. For example, points earned by shopping online should be able to be used at your stores, and vice versa.
Make sure your loyalty software has a unified dashboard so you can see how customers behave across multiple channels at a glance and get a full picture of what they like and don’t like.
It’s not easy to run a successful customer rewards program, but it could be easier if you use the right strategies and tools to run and automate your campaign. Don’t forget to get results by giving out interesting rewards that are related to your products and services. Since you already know how important repeat customers are to your business, keeping customers should be one of your top goals.