Business owners such as Incremental Marketing and administrators must understand the core principles that make customer loyalty programs work. Ignoring these principles may spell doom for a business while keeping them could bring outstanding results. Also, business decision-makers need to emphasize the more important matters for the sustainability of the program. Besides, building the loyalty program’s strength of the most important principles is another strategy to achieve uncommon success.
Moreover, these strategies play an essential role in showing what and how to change it to achieve better results. Therefore, this article assumes that a business already has answers to customer loyalty programs’ fundamental questions. These questions may include, what is customer loyalty? How can a customer loyalty program produce maximum results? In what ways can customer loyalty programs go wrong?
Principal Customer Loyalty Principles for Businesses
Below are the four most crucial loyalty principles to hold in high regard for best outcomes.
- Understand the Loyal Customers’ Life Cycle
Perhaps the first thing that a business owner or manager needs to note in a customer loyalty program is the loyal customers’ life cycle. For instance, if you deal in vacation trips for subscribers, you must understand the best time that you are likely going to get new subscribers. Also, you must know that even your loyal customers are likely to travel more during holidays such as summers and end-of-the-year.
Without this prior understanding, a business owner may not adequately cater to the customers’ needs. Simultaneously, you may need to ask what category of people travel more, young adults or older people. Working-class or students? How long will an international student have to travel? Will a couple travel more often than single young spouses? If a business fails to meet its demands with supposed loyal customers, a loyalty reward plan may go south.
- Relevance, Customization, and Personalization
Next to the customers’ life cycle is identifying the relevance of the planned loyalty reward program. Consequently, this information is critical to customer planning and personalizing the marketing options to loyal customers’ specific needs. Therefore, the brand needs to stay relevant by creating loyalty programs that recognize the consumers’ specific needs up to the individual level.
There might be needs that would be locality-specific, but the personalization must reach the level of individuals. Therefore, the targeted marketing reward procedures must go beyond traditional brand experience levels for the customers. More so, recent statistics also proved that consumers respond more positively to personalized experiences’ demands. These experiences attract more positive responses from consumers who benefit from loyalty programs.
- Less Rewarding Rewards to Loyal Customers
Business marketers and owners must realize that a profitable customer loyalty strategy some years ago for a particular business may not be beneficial for another business this time around. In other words, certain factors determine the effectiveness of a loyalty program. Moreover, when weighing the cost versus the value of the proposed rewards, the eventual outcome may not be profitable for the business.
A fundamental reason for these differences is that economies are changing, and products’ value is changing. Deals and transactions that made sense three years ago may bring a terrible outcome this time around. Also, how about the type of loyalty program in use? The actual value of the rewards that the company brand is giving out can also be significant. How about monitoring the loyalty program’s responsiveness to ensure that the customers eventually take the expected actions. Some clients may not be attracted to the point system but not yet reach the level of redeeming the points.
- Extend the Reward Beyond the Top-tiered Customers Only
When implementing the customer loyalty program, there is often a temptation to focus mostly on top-tier customers. However, the program’s effectiveness also partly depends on other loyal customers but not at the topmost level. In other words, when using the tier-based system, do not restrict the rewards to the top customers only. Although these customers bring about the highest rewards, the next level also controls a chunk of business revenue. Therefore, they are equally crucial for a record of success.
More so, as you give more opportunities to the customers who belong to the lesser cadre, it automatically creates more room for them to step up their purchase for better rewards. In modern business administration and marketing, business owners can still implement the planned strategies for both the customers at the topmost level and the level beneath them. When the programs are also well-implemented, all the loyal customers would still get one reward or the other, even if not the same. The program can extend and elongate these relationships’ life span between the customers and the product or service brand in such ways.
Exciting Statistics for Customer Loyalty Programs
- Up to 74% of all consumers prefer to earn immediate benefits than to keep accumulating the points for an eventual reward after the designated time
- Up to 72% of all consumers agree that getting exclusive loyalty programs that comes with automatic offers is also very appealing and profiting to them
- 69% of the loyal consumers freely choose personalized offers according to their identified preferences
- Apart from appealing preferences, 66% of the total consumers agree that customized offers are more beneficial and attractive than other choices or preferences
- Of all the beneficiaries, 58% of the consumers believe that apart from personalized from the client or business owner, communications is still key to appealing to them through personalized offers.
The selected loyalty program’s nature and effectiveness depend on many factors, including the four principles mentioned above. These factors may not be the most common. But failure to adhere to the factors can sabotage the process and cause a colossal failure where the business loses more than it gains. Also, the marketing department should keep a close eye on the ongoing loyalty program procedure to ensure effective monitoring and alignment towards the eventual goal.