Loyalty Campaign Ideas That Keep Customers Coming Back

A loyalty campaign rewards customers for engaging with your brand for purchases or spreading the word about you. One of the most common examples is providing points towards future purchases. The goal is to maintain loyal customers who'll buy from you again and again. 

According to a Statista survey, approximately43% of respondents said they would buy more from businesses with loyalty programs. They're the welcoming light that guides their feet in the door and the calming glow that keeps them from leaving to buy from another brand.

What's Customer Loyalty?

Customer loyalty is the likelihood that consumers will choose your brand over others. One of the main reasons it's so important is that retaining customers costs less than getting new ones.

Loyal customers also:

• Buy from you more often
• Pay more
• Serve as brand advocates
• Forgive issues more often

There are different types of customer loyalty.

Behavioral loyalty refers to customers who buy from you regularly out of habit. They may switch if another brand offers better prices or service. This is the lowest level of loyalty.

Transactional loyalty is when customers buy from you because of what they get. You may offer the best rewards, such as discounts on purchases. If these rewards go away, they may switch to another brand.

Attitudinal loyalty is when a customer buys because they agree with your values. It's a deep level but not the deepest, and the risk of losing them remains.

Emotional loyalty is one of the most important and deepest levels. Customers who are emotionally loyal buy from you because of an emotional connection with your brand. Perhaps they bought your products when they were children or have always had positive customer service experiences with you.

Brand advocacy is the deepest level. Customers who are this loyal will buy from you more often. They'll tell others about you through social media and word of mouth. That means more sales and free marketing.

How to Measure Customer Loyalty

There are several important metricsto look at to determine customer loyalty

Net promoter score is your percentage of promoters minus your percentage of detractors. See what customers say about you on social media and other sources.

Customer lifetime value is the value of each individual customer. Multiply their order value by purchase frequency by customer lifespan.

Purchase frequency is for all customers. Take total orders divided by unique customers.

Measuring customer loyalty is only the beginning. You also need to find out how long they stay loyal. 

There are three major metrics for customer retention. They include:

• Customer retention rate 
• Churn rate
• Repeat purchase rate

What is a Loyalty Campaign?

A loyalty campaign incentivises repeat interactions. There are several types.

Points-based programs can provide points for every dollar spent. In a tiered program, rewards increase with higher engagement levels. Subscription-based programs require customers to pay to join and get regular rewards. Engagement-based programs reward purchases and engagements that show interest or advocacy, such as social media posts.

Other ideas include:

• Punch cards 
• Referral programs
• Personalized rewards, like birthday rewards
• Gamifying your program by using leaderboards or challenges
• Charity-based rewards

The goal of all of these programs is to make customers more active and engaged with your brand.Customers are more likely to buy from your brand or tell others about it if they get a reward.

How to Make Effective Loyalty Programs

Effective loyalty programs cater to your customers. That's why the first and most important step in creating one is to gather information about them, such as:

• Purchase behavior
• Preferences
• Post-purchase satisfaction
• net promoter scores

You should also set goals for your customer loyalty metrics. How much do you want to improve your loyalty and engagement rates?

Map the customer journey out. Find out where they drop off or where any friction occurs. That'll help you create a seamless experience.

Use interactive content as part of creative reward systems. They should be personalized to your customers and fit with your brand.

Test and optimize every part of the campaign, from the rewards to the design. Fix anything that isn't working.

Frequently Asked Questions

What Is the Most Successful Loyalty Program?

Two of the most successful loyalty programs of all time are Sephora and Starbucks.

Sephora uses a points-based, tiered program called Beauty Insider. According to Free Yourself research, they have over 40 million members, accounting for almost 80% of the company's sales.

In the US, the tiers are called:

• Insider
• VIB
• Rogue

You can redeem points for product trials, makeovers, and other rewards. It increases purchases and helps enhance customer engagement. It also goes well with the physical Sephora reward card.

Starbucks has used a points-based, tiered system since 2009. Every purchase gets you free snacks and drinks. Higher-tiered members get special benefits, such as free refills. According to Starbucks CEO Laxman Narashiman, their mobile app accounts for 30% of purchases. Reward members also pay more and stay longer.

Why Do Loyalty Programs Fail?

Loyalty programs can fail to boost customer loyalty for several reasons.

If they don't stand out and feel like every other loyalty program, customers will grow uninterested. They need to feel unique and encourage brand engagement.

The program also needs to be easy to use. It shouldn't be overly complex or take an excessive amount of time to gain rewards that actually feel rewarding.

A poorly designed program can backfire. Customers may become loyal to another brand with a better one. That's why it's so important to design them carefully.

Plan a Loyalty Campaign Today

A loyalty campaign rewards your customers for shopping with or talking about your brand. That helps turn them into loyal customers who are more likely to shop with and talk about you. It's a cycle every business needs to master.

Taradel provides businesses with an all-in-one marketing platform and a team of marketing experts. We'll combine our experience with your goals to help you reach your next best customer and beyond. 

You can reach even your loftiest business goals with our help. Reach out to start planning your next campaign today.