How to build a profitable customer loyalty program 7 key steps to create customers for life AGENCY OF THE YEAR

Transcription

1 How to build a profitable customer loyalty program 7 key steps to create customers for life AGENCY OF THE YEAR

2 INTRODUCTION Customer loyalty in the age of the customer 2

3 Customer loyalty in the age of the customer Achieving customer loyalty today is priority number one for most businesses. In fact, according to Forrester*, improving customer loyalty was a top marketing priority for 80% of decision-makers at large organizations in Nowadays, customers are always online, have access to more choices, and can switch to other brands on demand with little consequence. So, it is getting more difficult to attract and retain customers. How can brands win their customers trust in such a complex environment? While many modern companies are struggling to successfully meet their customers needs, customer experience seems to be the only way to success. The typical approach to customer loyalty emphasizes on discounts and offers rather than building a relationship. As a result, loyalty programs fall short of creating real and lasting loyalty. Loyalty has become synonymous with points, discounts, and rewards not with the customer s emotional loyalty and devotion to a company, product, or service. So, the best way to create customer loyalty today is to rethink your approach and invest in tools and technology that enable you to build memorable customer experiences. In this context, launching a loyalty program could be a smart business decision that helps you overcome key loyalty challenges. In this ebook, you will find everything you need to launch a successful rewards program and create long-lasting relationships with your customers. Taking into consideration that attracting a new customer costs 5-7 times more than keeping an existing one, you should start focusing more on marketing to the shoppers you already have. *Source: Forrester Research Inc.,The Forrester Wave : Customer Loyalty Solutions For Large Organizations, Q INTRODUCTION

4 What is customer loyalty? Customer loyalty is the result of consistently positive emotional experience, physical attribute-based satisfaction and perceived value of an experience, which includes the product or services. - Forrester Why consumers join loyalty programs Consumers join loyalty programs for various reasons. To save money For more than the privileges They seek to join programs of brands they like They want to feel special How much do you agree with the following statements regarding customer loyalty programs? (4 or 5 on a scale of 1 [strongly disagree] to 5 [strongly agree]) Loyalty programs save me money Loyalty programs influence where I make purchases Loyalty programs influence what I buy Loyalty programs influence how much I spend I belong to too many loyalty programs Base: 3,170 US online adults (18+) who belong to any loyalty programs 26% 79% 67% 50% 54% Source: Forrester s North American Consumer Technographics Customer Life Cycle Survey 2, 2015 Find more amazing Customer Loyalty facts here The power of loyalty programs Loyalty programs are powerful and effective tools for brands, offering numerous benefits. They help businesses drive more meaningful and lasting relationships with their customers and increase sales. 4INTRODUCTION

5 Benefits of customer loyalty programs Customer loyalty programs can benefit businesses in many different ways. Deeper understanding of customer motivations Create brand advocates Retain existing customers Increase CLV Boost business growth Drive customer engagement Enhance customer experience Identify & retain the most profitable customers Loyalty program members are likely to rate customer experience with a brand seven points higher than nonmembers. Loyalty program members tend to feel more valued. 65% of members feel like the brand rewards their loyalty, compared with only 28% of nonmembers who feel that way and self-identify as loyal customers.* *Forrester s Customer Experience Index (CX Index ) 5INTRODUCTION

6 7 key steps to create customers for life Building a profitable customer loyalty program 6

7 BUILDING A PROFITABLE CUSTOMER LOYALTY PROGRAM 7 KEY STEPS TO CREATE CUSTOMERS FOR LIFE: 1. Loyalty strategy Set it right from the start 2. Loyalty insights Capture loyalty data & apply insights 3. Customer loyalty management Find the right technology solution for you 4. Loyalty with brains Add intelligence to your loyalty efforts 5. Mobile Loyalty Focus on mobile moments 6. Loyalty program promotion Build a loyalty marketing plan 7. Loyalty program optimization Measure customer loyalty 77 KEY STEPS TO CREATE CUSTOMERS FOR LIFE

8 SET IT RIGHT FROM THE START Loyalty strategy 1 Brands today focus more on the customer loyalty program rather than building relationships with their customers. But loyalty goes beyond the program and building it is a longterm strategy. Start by designing a solid customer-centric loyalty strategy, which enables you to set goals and describe with clarity and detail all the processes of the loyalty program. By not having clear goals, you can t understand what works and what doesn t for your brand and therefore for your customers. 1. LOYALTY STRATEGY A successful customer loyalty strategy considers all the potential consumer channels; brick-and-mortar store, e-shop, mobile application, social media, SMS, print, s, etc. Even though your e-store might be your core channel, your approach should be based on a unified commerce model where the customer is, of course, the center. Set crystal clear objectives for loyalty Describe details and specifications Define program s processes Follow an omnichannel approach Set loyalty benchmarks & KPIs 8

9 Building loyalty is a long-term strategy Start thinking the relationship with your customers as a continuous journey and not as a single action. 91. LOYALTY STRATEGY

10 When designing your loyalty strategy, it is crucial to describe the methods that you are going to use to gather information from all available sources and channels. What technology are you going to use? How frequently will you update your customer loyalty measurement? Write everything down and start planning your next steps. Invest in consistency Remember that in today s unified commerce, it is important to retain a consistent and relevant messaging through all channels. Customers expect a constant shopping journey, so this is exactly what you should be offering to them. Consistency not only builds but also maintains trust, meaning more loyal customers. Set loyalty benchmarks Every successful strategy has several basic KPIs in place. Customer Lifetime Value (CLV), average order value, purchase frequency, repeat users, are some key metrics every brand should measure. Set loyalty benchmarks to track results and accurately determine which actions work best for your business. 1. LOYALTY STRATEGY Build a loyalty strategy that recognizes rational and emotional loyalty. 10

11 Advance your approach to customer loyalty Build a strategy based on customer insight that meaningfully acknowledges and reinforces customer relationships. 1. LOYALTY STRATEGY Consumers aren t necessarily just interested in saving money. Enhanced customer service, mobile rewards and the ability to earn special treatment have become more important over the past few years. The best customer loyalty programs don t just engage with and reward shoppers when they make purchases they also give points for a variety of different actions. By giving your customers good reasons to come back to you, either they are members of your rewards program or not, it is more likely to maximize their lifetime value. Build an attractive customer loyalty program that rewards your customers for: writing reviews giving feedback referring friends connecting on social media hashtagging photos 11

12 CAPTURE LOYALTY DATA & APPLY INSIGHTS Loyalty Insights 2 According to Forrester*, only 7% of marketing executives mention customer data collection as a top-three business objective for their customer loyalty strategies. If you don t understand your customers, you ll not be able to deliver the right experience to them. Loyalty programs help you collect valuable data from engaged and loyal customers. By applying advanced insights, you can identify and better understand your customers shopping behavior and preferences. That will lead to a sharper strategy and improvements to your acquisition and enrichment efforts. 2. LOYALTY INSIGHTS What separates a good from a great customer loyalty program is the way customer data is used. Remember to integrate data into your entire business operations, not just loyalty programs. *Source: Forrester Research Inc., Forrester/DMA Q Global State Of Loyalty Online Survey 12

13 Loyalty Insights If you don t understand your customers, you ll not be able to deliver the right experience to them. 2. LOYALTY INSIGHTS 13

14 The importance of loyalty insights Loyalty insights are crucial to the performance of the loyalty program and the customers life cycle. Use loyalty insights to: Optimize the performance of the loyalty program Identify and support your loyal customers Help existing & new customers discover new products Facilitate the purchase process with targeted content Maximize customer use of products and services Capitalize on customer engagement Create personalized promotions and communications Provide a more consistent customer experience across all touchpoints 2. LOYALTY INSIGHTS Loyalty s Influence On the Customer Life Cycle Be a Loyalty Company. Not a Company with a Loyalty Program Use loyalty insights to : ENGAGE Capitalize on borrowed moments. Identify and support brand advocates. DISCOVER Make targeted media buys. Identify prospects withvlook-alike modeling. USE Build resourcers to help customers maximize their purchases. BUY Deliver contextual offers. Refine purchase experience. Improve merchandising efforts. EXPLORE Create personalized content for look-alike segments. Design a consistent experience across touchpoints. ASK Better recognize loyal customers. Anticipate needs in-store. Source : Forrester Research Inc. Achieve a more holistic understanding of how loyal customers behave 14

15 FIND THE RIGHT TECHNOLOGY SOLUTION FOR YOU Customer Loyalty 3 Management Finding the right customer loyalty provider is essential to the success of the program. Invest time to define your loyalty objectives and research the available technology solutions that address your specific loyalty needs. Make sure that the loyalty management platform covers every aspect of your customer loyalty, from loyalty management to loyalty marketing and measurement and is able to support the needs of both your business and your customers. In order to run an effective loyalty program, you need to find a flexible and reliable technology platform that meets both the administration- and execution-related requirements. 3. CUSTOMER LOYALTY MANAGEMENT Focus on the right customers and manage customer loyalty from the registration process to redemption, rewarding and customer support. 15

16 Omnichannel operations Managing a loyalty program also requires an experienced team that will be handling all the processes of the loyalty program through the loyalty management platform. Choose a highly trained operations team that would quickly resolve all tickets, either technical or not and effectively manage the data quality and validation process. Set loyalty rules & engines Manage data quality Validate data Schedule campaigns Resolve issues Optimize loyalty performance 3. CUSTOMER LOYLATY MANAGEMENT The image of the customer could get clearer with the right technology solution in place, along with the know-how to address current challenges. 16

17 ADD INTELLIGENCE TO YOUR LOYALTY EFFORTS Loyalty with brains 4 Invest time in finding new, smart ways to reach the Connected customer and reinforce loyalty. Use advanced marketing technology tools, such as marketing automation and Artificial Intelligence. These technologies can help you improve communications with your customers and deliver relevant experiences regardless of channel. 4. LOYALTY WITH BRAINS Marketing automation Marketing automation tools enable you to connect with your customer with the right content at the right moment, delivering personalized and consistent experiences across all touchpoints. Meet your customers expectations for personalized communication with marketing automation. Your loyalty newsletter campaigns become less complex with the automation technology. Within minutes you can create powerful loyalty campaigns to inform your members about special discounts or promos and drive engagement and therefore more loyal conversions. Artificial intelligence Today shoppers expect brands to understand their preferences, leverage customer data and offer relevant messages to them. Advanced marketing technology solutions powered by artificial intelligence are an effective way to offer a personalized experience to customers, exactly when they expect it. 17

18 5. MOBILE LOYALTY FOCUS ON MOBILE MOMENTS Mobile loyalty 5 Reach, connect and delight your customers on the most personal device they own. Consumers turn to their mobile phones for almost everything; from online shopping to entertainment and information. Brands can leverage these mobile moments to reach customers successfully and create meaningful and lasting connections with them. Reinforce key customer moments and enhance your loyalty efforts with a tailor-made loyalty mobile application. Optimize your rewards program for mobile so that you can increase customer engagement at the most personal device they own. Stay connected with your customers Through a user-friendly mobile application, all members of your customer loyalty program can easily enroll in the program, manage their loyalty profile and engage more with your brand. Special offers & discounts Mobile payments Loyalty profile management Push notifications 18

19 BUILD A LOYALTY MARKETING PLAN Loyalty program promotion 6 You cannot win customer loyalty by just implementing a loyalty program. How will your customers know about your loyalty program if you don t promote it? Especially in e-commerce, help visitors get to know the program and stay in touch with existing members to communicate them the latest updates of the program. How to overcome this challenge: Build a loyalty marketing plan in order to effectively communicate it and boost customer enrollment, both online and offline. 6. LOYALTY PROGRAM PROMOTION You cannot win customer loyalty by just implementing a loyalty program. You need to promote it. 19

20 Loyalty marketing How can you create customer experience excellence? Show your customers that you value them for buying from your brand and add value to every interaction during their shopping journey. Loyalty programs can help you bring this to life. Leverage all the communication channels with targeted loyalty marketing actions that are based on real data, fully aligned with your annual marketing plan. Enrich your marketing plan with unique customer engagement strategies. 6. LOYALTY PROGRAM PROMOTION Leverage all communication channels Follow an omnichannel approach Create personalized reward campaigns Use product recommendations Rethink the rewards mix Measure your loyalty marketing actions Encourage referrals 20

21 MEASURE CUSTOMER LOYALTY Loyalty program 7 optimization The key to success is to test and measure all your loyalty efforts. Optimize your strategy often and deliver A/B testing campaigns to determine which message works best for your members. Invest in technology, such as an advanced CRM platform to get a deep activity and insights on your customers and monitor their impact through custom analytics and reporting. In today s unified commerce, being able to gather all the necessary data from structured and unstructured sources and get predictive insights, will help you connect with customers with immediate and relevant experiences. 7. LOYALTY PROGRAM OPTIMIZATION By understanding customer behavior and preferences, you will be able to make personalized communications with them and boost customer engagement. 21

22 CONCLUSION 22

23 Conclusion CONCLUSION Developing a successful loyalty program takes time and effort. Think of your relationship with your customers as an ongoing conversation. In order to drive true loyalty, you need to evolve your approach and find creative ways to engage with them on the entire customer life cycle, not just the purchase activity. Focus on loyalty strategy, customer data, performance management, and the design and implementation of the program. The secret to improving customer retention is the combination of a solid customer strategy and the right technology solution. Follow the 7 key steps found in this ebook and start designing your loyalty program. Intelligent and lasting customer loyalty is possible with the right resources in place. 23

24 QIVOS is a marketing technology agency that delivers successful end-to-end customer loyalty management through unified commerce. Based on its expertise in customer experience strategies and tailor-made technology solutions, QIVOS helps brands build unique long-term relationships with their customers. Join the conversation Follow us on QIVOS marketing@qivos.com LONDON ATHENS HONG KONG