Customers look for a personalized experience these days. Brand loyalty programs are very important, if they do not feel connected with a brand, they will not turn into profitable consumers in the future. According to the studies, gaining a new customer is six times more expensive for the brands than maintaining an existing one. Another survey says that 83% of the consumers have agreed that loyalty programs have encouraged them to continue with the brand. Brand loyalty programs help businesses to win potential consumers. Brands must invest in this marketing strategy to yield profitable results.
Loyalty programs are not like another common marketing strategy. It is much more than that! Improving the overall consumer experience is the goal of the brand loyalty program. It allows businesses to grow their market with an increased consumer base by offering exciting rewards. State of Marketing Report finds that approximately 63% of marketers use loyalty programs to achieve the planned business targets. Its market is estimated to grow by 80% in the coming years.
What is a Brand Loyalty Program?
It’s a marketing strategy that identifies potential customers and rewards them with exciting offers that build their interests in a brand and keep them engaged on a continuous basis. The list of benefits involves free merchandise, rewards, coupons, insider perks, or other gifts that can keep the customers intrigued about what’s coming next. Brands can win over competitors by including loyalty programs in their promotions.
Brands are going the extra mile to create a buzz about their businesses and offerings. Loyalty programs ease their burden in ensuring this motive up to an extent. It reinforces the consumers to take action against the brand’s continuous efforts. Instead of spending aimlessly on redundant marketing tactics, brands must invest in loyalty programs to actually achieve the planned business targets.
How Can Businesses Benefit From Brand Loyalty Programs?
Loyalty programs play a massive role in attracting and maintaining potential consumers, resulting in better growth and profit margin for the brands. Implementing consumer loyalty programs is not easy, but it can definitely bring the desired results for businesses. Let’s understand how:
- Better customer retention
Consumers stick to the brand’s offering when they get what they actually expect. Through loyalty programs, brands can get insights into the consumers’ preferences that allow them to offer rewards accordingly. As a result, brands can retain the consumers in a better way.
- Better profits for the business
Retained and satisfied consumers always bring desired revenues and profits to the business. Recent research has also verified that increasing consumer retention rates by 5% can raise profits by 25%. Loyalty programs fulfill these motives by engaging the consumers and improving their overall experience with the brand.
- More customer referrals
When customers are impressed with what the brand is offering, it encourages them to spread positive word-of-mouth. As a result, customer referrals increase. It indirectly benefits the brands through increased business opportunities, more target markets to serve, and better profits.
- Creates brand’s goodwill
Maintaining a positive image is what matters the most to brands these days. Loyalty programs help them in achieving this vision. By offering exciting shopping options and rewards, these programs encourage happy consumers to publish positive reviews about the brand.
How To Create a Strong Brand Loyalty Program?
Loyalty programs work in a way that makes customers feel engaged, recognized, and special and retain them in the long run. How brands incorporate loyalty programs in their offerings is what makes a difference! It is a time of technological advancement.
A QR-based loyalty program is the best option. To avail of the exclusive award, the consumers can scan the QR code mentioned on the product with their smartphone. It accelerates the pace of the operations and ensures product authenticity.
QR-Code loyalty programs are far better than conventional loyalty programs in building a close connection with the consumers. The users have to simply scan the QR code to earn benefits. It’s that easy!
Once customers are linked to the Brand. They can run additional campaigns to engage and retain the existing users.
Create a Better Consumer Experience With LetsVeriFy’s Brand Loyalty Programs
Gaining the trust and loyalty of the customers today is hard. With LetsVeriFy’s Digitized brand loyalty programs, brands can achieve this motive in the fastest and smartest way possible.
Different Types of Brand Loyalty Programs
There is a wide range of brand loyalty programs available in today’s retail world but you need to choose the best for your organization. Sometimes we recommend implying a single loyalty program that exactly matches your business needs but some other times two or more loyalty programs can be incorporated as per the business prototype.
The other name of a brand loyalty program is customer loyalty program that is crafted in innovative manners to inspire customers’ brand loyalty. Generally, these programs come within nine categories. Let’s understand each of them.
- Tiered Loyalty Program
These programs are designed to encourage a customer to generate more business by purchasing more products or services. It is based on the level of loyalty. On every purchase, consumers can collect points and with more purchases, the points will automatically rise and the loyalty level gradually reaches up.
- Point Brand Loyalty Program
This is the most common type of loyalty program which is being used everywhere. Most corporations prefer to incorporate it as it goes well with every business model. The motto of this program is to pay more to get more. The more your customer will make purchases whether online or offline more points will generate. The points depend on the amount of purchase the customer has made. Customers can use the points at any time to get certain rewards like a special offer or discounts etc. This program is suitable for both the product & service industry.
- Referral Based Loyalty Program
It is an effective way of lead generation. This method is based on the word of mouth principle and businesses use the already loyal customer to promote their product or services. The customer advocates about the business among his circle by using a referral link through his social handles and once someone purchases by using the link, a reward is offered to the customer. The reward can either be a special discount or a freebie. This is one of the effective types of marketing strategy that creates brand loyalty while generating a good customer database.
- Spend Based Loyalty Program
It is one of the easiest loyalty programs that are easy to create and maintain thus making it one of the favourite ones. Most healthcare & beauty industries adopt it readily. The loyalty credits are given based on the amount spent while purchasing a product.
- VIP Brand Loyalty Program
You can offer this particular program to your VIP customers. You can create a VIP royalty club with some special features and exclusive offers only designed for those who take the monthly or yearly subscription.
- Value-Based Loyalty Program
Through this particular program, a small amount is paid for some greater cause each time a purchase is being made. Such as by purchasing a particular product of a certain value, 10% of the purchase amount will be paid to an orphanage. Sometimes customers are requested to donate a nominal amount for a social issue while purchasing a product, and other times a percentage is deducted from the invested amount to a social concern. This value-based loyalty program is gaining much popularity lately.
- Game-Based Loyalty Program
This is generally used in game-based applications or a loyalty app with gamification is needed to utilize its benefit. This model will increase customer engagement and motivate them to visit your website again and again. Introducing various challenges like treasure hunting within a specified time will encourage & entertain your customer.
- Cash Back Program
It is somewhat similar to the point model. Here a certain percentage of the spending amount is sent back as cash and saved in the wallet for further use. Generally, the cashback is dependent on the purchase amount. Give your customer a special offer like on purchasing over Rs. 2000 will get a cashback of Rs. 100 which will be stored on his e-wallet. Retail business owners can also use it.
- Hybrid Loyalty Program
This is a combination of two or more Loyalty Programs to maximize the effectiveness and entertain the customers. You can merge two programs like the game model & point model altogether. Thus whenever a certain point is collected a new level or some special power is unlocked. Even by completing each level, more loyalty points will be received.
6 Steps to Create The Most Robust Loyalty Program
Brand loyalty programs help your business grow and prosper in various ways. First, it will make your target audience choose your brand among other competitors and create brand loyalty. Your customers will continue to choose your brand despite getting a product at a more competitive price than other brands. A robust loyalty program will provide attractive rewards to make your customers stay more engaged with your brands, and thus a good customer relationship will build-up that will help your brand grow further in the Long run. Sometimes, a strategic customer loyalty program helps retain a good customer base and helps attract new customers, as they may feel more interested in your brand by knowing about your customer rewards or loyalty schemes.
What Are The Needs Of Brand Loyalty Programs?
A recent study has shown that 80% of a company’s revenue depends on 20% of existing consumers’ activity. Thus an existing customer base is essential for a company to strive & survive in a highly competitive environment.
Gaining a new customer is tough and requires more effort and financial planning. It has been observed that it takes 5 times more cost involvement to acquire a new client than to retain an existing one. Moreover, an existing customer will easily get convinced whenever you launch a new product and service and will most likely go for it.
Due to all these reasons, customer loyalty is a necessary step that organizations of all levels should implement to secure steady revenue generation.
What Are The Six Essential Steps To Create Brand Loyalty Programs?
A customer loyalty program will be a great addition to your existing marketing strategy as it will take your business to a new level. Incorporating a correct loyalty scheme can further aid organizational growth, while a faulty one will only cost your money with no proven results. Follow these 6 essential steps to help you plan and design the best loyalty program that suits your business.
1. Know Your Audience
A customer loyalty program will help you get more attached to your existing audience, so it is essential to know about your audience in detail before planning a strategy. You can do a small survey by asking the following question to learn better.
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- How long are they associated with your brand?
- How frequently do they make a purchase?
- How satisfied are they with the brand?
- What changes do they want?
2. Choose A Program That Goes Best With Your Audience
Creating a structural plan that goes best with your business is essential as not every program will suit your business or your group audience. So creating a plan that makes sense and goes well with your brand value is essential. Then, once you plan out the program, engage some extremely good employees in customer handling to execute the program.
3. Decide The Incentive
It Is another important step to building brand loyalty programs. Once you know the audience, it will become easier for you to decide the rewards. You can either choose pointers or cashback. Here we have jotted down some of the most effective reward systems companies adopt.
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- Discounts
- Buy one get one free
- Give away
- Free shipping
- Cashback
4. Plan a Budget
Before starting with the actual program, it is essential to chalk out the budget, like how much you can use from your capital to earn these benefits. While planning the budget, keep in account the above three steps.
5. Set A Goal
Create a measurable goal like what you expect from the scheme and how soon. By measuring these goals periodically, you will get to know how these brand loyalty programs are doing so that you can implement a few changes when needed.
6. Decide Whom To Target
Targeting the right audience is necessary, and the following steps will help you decide whom to target.
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- How much does a customer purchase per month?
- What is the payment mode, and how fast do they pay?
- Are they capable of purchasing more products or services?
Conclusion
Brand loyalty programs will build the foundation of revenue generation and help you focus more on new business development while keeping your existing business safe and secure. For any questions, contact us.
Frequently Asked Questions (FAQs)
The key indicator of successful brand loyalty programs is how many customers are signing up for it. By simply analyzing and understanding the conversion rate, brands can understand whether the loyalty program is attractive to new and existing customers or not. Also, observe if your customers are actively engaging with your loyalty strategy. Have a record of the percentage of customers who use redeem rewards in your loyalty program.
Brands can also take note of repeat purchase rate and average order value. It gives clarity on whether your customers are coming back to you and if they’re spending more. Most crucial of all, measuring customer lifetime value is a sure way to figure out the long-term success of a loyalty program. It helps to analyze the worth of a customer and know your most valuable shoppers, allowing you to prioritize your target audience accordingly.
LetsVeriFy QR Code-based brand loyalty programs help you track the effectiveness and ROI of this marketing strategy. Every time a customer scans the QR Code mentioned on the product packaging, the data goes to the brands allowing them to make the required changes in their loyalty programs. Measuring the ROI of a loyalty program becomes easy with our digitized solutions.
Since existing customers are powerful and work as a cost-effective acquisition tool, brands must pay attention to them and nurture their demands. When the loyal customers are satisfied, they become brand advocates and recommend your offerings to their close connections. Understanding and fulfilling the brand expectations of the customers is crucial. It is a feasible way to make every business work.
Incentivizing the existing customers with exclusive rewards and loyalty points matters for businesses today. Giving every customer a unique referral link that can help brands identify the most loyal brand advocates. The loyalty programs come as an optimal solution that enables brands to satisfy their customers hassle-free.
The brand loyalty programs deliver personalized communications and marketing strategies allowing brands to actively engage with the audience. As a result, brands can offer the rewards that customers may be expecting out of them. It boosts customer engagement and gives motivation to the members to keep interacting with the loyalty program.
Keeping customers satisfied is necessary to make every business work. The brand loyalty program works phenomenally in ensuring this goal. The benefits of this marketing strategy are massive! If designed and implemented correctly, it:
- Draw more traffic to the store and website of a brand
- Help brands become stronger competitors
- Increase customer retention
- Increase customer spending
- Helps to gain valuable customer insight
- Realize and anticipate sales trends
With well-designed and well-implemented brand loyalty programs, businesses can meet their targets effectively and satisfy their customers proactively. It’s a smart and advanced marketing strategy that works in favor of brands and improves the overall customer experience.
LetsVeriFy brand loyalty program helps businesses to win over competitors and reinforces the consumers to take action against their continuous efforts. If you want to achieve planned business targets, you need to invest in this latest marketing strategy. It will surely bring positive results for your brand.
Brand loyalty programs play a massive role in attracting and maintaining potential consumers, resulting in good growth and profit margin for the brands. However, the efficacy of loyalty programs also matters. It should deliver genuine results!
The best brand loyalty programs must fit your business model and make sense to you and your customers. They must be easy to use and implement, should measure results, include lots of features, and be affordable for brands.
While curating loyalty programs, you need to identify the factors that can add to its performance and reliability, including the target audience to be served, hidden fees, right to customer data, and a lot more. Also, it should be flexible and must adapt to the changing requirements of your business.
LetsVeriFy brand loyalty program is a perfect fit for every business that wants to outwit other brands. It helps your business grow and prosper in various ways!