5 Powerful Tips - How to Improve your Customer Loyalty Programme
In this webinar we show you how to improve customer loyalty in 5 key steps. If your brand has previously delved into loyalty programmes, you know only too well that it doesn’t always guarantee a return on investment (ROI). This webinar hosted by Rachel Doherty , Head of Global Marketing at TLC Worldwide, and Mike Brinn , Global Loyalty Director, will also show you case examples of rewards programmes that have achieved ROI by applying these loyalty program best practices.
To watch the recording of this webinar and/or download your FREE e-book follow this link - 5 powerful tips on how to improve customer loyalty & Ebook (tlcworldwide.com)
How exactly do you improve customer loyalty?
Aswell as a ROI?
In a nutshell your brand needs to:
1: To Improve customer loyalty build engagement from the start
One of the critical factors to improve customer loyalty is engaging customers from the moment they sign up. Many rewards programmes experience a decline in customer engagement over time, resulting in a “leaky bucket” effect where members join but fail to remain active. To combat this, immediate engagement is crucial. By offering immediate value, personalised communication, and a sense of exclusivity, customer loyalty programs can foster engagement and build a strong foundation for long-term loyalty.
Did you know that 30% of customers don’t make a further transaction after joining a loyalty programme?
Strategies based purely on loyalty programs that offer points on discount miss an opportunity to drive deeper engagement to emotional loyalty. These discount programmes pretending to be loyalty programs are easy for customers to see through.
The right way to improve customer loyalty as a brand is to leave them feeling like there is a reason for joining. That it’s going to make their life a bit better and there’s also rewards in it for them.
Nordic spirit improved their customer loyalty programme
For example TLC’s Nordic spirit improved their customer loyalty programme by speaking to their customers in a way that builds an emotional connection.
Nordic Spirit wanted to create a brand pillar that was about the Nordic lifestyle. TLC coined the name Club 64 because 64 degrees North is where the Nordic lifestyle is geographically. We created valuable content about how to be Nordic and things that Nordic people do. It allowed customers to engage with the content whilst they built up enough transactions to get a reward.
2: Knowing Who to Reward and How Much to Invest
To drive revenue growth, it is essential to identify the customers who have the most potential to increase their spending. While top customers may seem like the obvious choice, focusing on infrequent or less engaged customers can yield significant results. Tailoring rewards and incentives to meet the needs and preferences of these customers can encourage them to increase their spending and loyalty. By analysing customer data and behaviour, businesses can identify the segments with the highest growth potential and allocate their resources accordingly.
Most of the time the biggest opportunity is from the people who don’t spend enough with you. You need to build your loyalty programme around that proposition of “how do I get those people who are less infrequent to visit and spend more”
Coffee companies: rewarding customers the same way is ineffective
An example of how rewarding all your customers in the same way wasn’t effective is 20 years coffee company reward programmes were based around buying 8 coffees and get the 9th free, Very quickly you could see that the top 10 or 20% most frequent purchasers could not buy any more coffees. The VIPs didn’t need that discount and coffee companies were giving away a coffee that didn’t need to be given away.
The marketing budget needs to be invested wisely for best ROI. You want to invest in lower frequency customers to increase frequency and bring them up to advocacy . Then for customers who are of higher value, treat them differently, give them more benefits, engage them in a different way
3: Moving Beyond Transactional Behaviour improves loyalty
We previous delved into emotional loyalty in our emotional rewards blog. Traditionally, loyalty programs have been built around transactional behaviour, such as earning points for purchases. However, to create emotional loyalty and deeper engagement, it is essential to move beyond mere transactions.
Improving customer loyalty programs means focusing on building emotional connections with customers, aligning with brand values, and providing experiences that resonate on a personal level. By incorporating non-transactional elements, such as exclusive content, lifestyle experiences, and personalised communications, loyalty programs can create a more meaningful and lasting impact.
In order to create emotional loyalty in a rewards programme it must…
it must…
Recommended by LinkedIn
However most loyalty programmes are based on points for transactions…
45% of millennials don’t join a loyalty programme because it requires too many purchases to earn rewards (Kobie Marketing)
57% of members do not know their points balance, and 38% are unaware of their points value (Bond)
77% of loyalty programmes based only on transactional behaviours, i.e. earning points, fail within two years of launch. Emotion is one of the strongest drivers of customer retention, enrichment and advocacy. (CAP GEMINI)
That’s a scary start at the end from CAP GEMINI, which says 77% of programs based on only on transaction behaviour and as earning points only failed within two years of launch. Points work really well in high transactional businesses like supermarkets, pharmacies and airlines. However you will find that customers are then only loyal to the points they’re chasing. If your brand wants to change customers into loyal advocates of the brand, it needs to find the value in the customer transaction with your brand and make the brand relevant to their life.
Electric Ireland rewards programme creates emotional loyalty
A good example of how to improve customer loyalty via emotional engagement is with the brand Electric Ireland
This loyalty programme was recently shortlisted for the loyalty awards and international marketing awards. In the UK the cost of energy was exceptional. Governments had to step in to help you with your bill. Despite this, Electric Ireland was still able to improve their customer loyalty because they gave customers a little bit back. With inflation marketing in mind, TLC created rewards like great days out where customers could experience Ireland’s nature landmarks in a different way. It also allowed Electric Ireland to support their green partners. It was tough times so for families to be able to bring their kids to a natural park was valuable.The loyalty rewards spoke to the customer who wanted to feel they were getting something of benefit and Electric Ireland greatly improved their customer relationship scores.
4: Building Emotional Connections
Emotion plays a significant role in driving customer lifetime value (CLV) to improve customer loyalty programs. By creating emotional connections with customers, brands can foster a sense of loyalty and advocacy. Personalised interactions, surprises on special occasions, and demonstrating genuine care and understanding can go a long way in building emotional connections. Brands ultimately want to get their customers to become advocates and recommend their brand to friends and family. Additionally, incorporating sustainability and community-driven initiatives can appeal to socially conscious consumers and enhance the emotional bond with the brand.
Coral rewards campaign encourage customers to have an emotional bond with the brand
For instance TLC recently worked with Coral a bookie company. Their brand message was to have their customers “get closer to the action”. Through customer research they learnt that their customers wanted to feel like they were the owners of a horse. TLC developed a brand experience where the customer comes to the racetrack, goes into the enclosure and ultimately they may be in the winner enclosure. If the horse wins they also get to share the prize money. This customer reward got shortlisted as a finalist in the International Loyalty Awards. It shows what is possible for brands when they think of what’s important to their customers and stay true to their brand. Coral improved their customer loyalty with an impressive NPS number from this rewards programme.
5: Making Rewards Easily Accessible
Lastly, brands should strive to make rewards easily accessible to customers in order to improve their customer loyalty. Simplifying the redemption process, offering a wide range of reward options, and ensuring seamless integration with existing systems or platforms can enhance the overall customer experience. By removing barriers to reward attainment, businesses can motivate customers to participate actively and derive value from the loyalty program. This is where building your martech stack can really help facilitate that process. We spoke about how various saas platforms can improve customer experiences previously. At TLC our brands also have access to a white label customer rewards software COSMOS to distribute their rewards seamlessly to their customers.
For context 70% of customers abandoned programs because it takes more than six months to accumulate rewards.
If your customers have signed up, but after 90 days haven’t received anything then your brand hasn’t created a positive experience. Their motivation to keep going is going to be challenging. The redemption process is a crucial way to improving customer loyalty programmes
At TLC we have some effective loyalty rules that we live by. Our rewards need to be:
They also need to be redeemable before 90 days by the customer.
Your brand also needs different elements of engagement to give extra benefits for your customers rewards.
Tommy Hilfiger rewards are easily redeemable and timely
An example of redemption done successfully in this way is our work with Tommy Hilfiger in the USA. If you’re a member of the Hilfiger Club in the US, and you purchased two hundred dollars or more between February to March the customers were rewarded with two hundred dollars of free travel credit. In perfect time for spring break. Tommy Hilfiger also rely on different types of activities and promotions. They don’t just rely on the transaction based points for rewards. Tommy Hilfiger improved their customer loyalty programmes which helped with upsell and reengagement with the brand
Conclusion
How to improve customer loyalty whilst effectively driving ROI requires a strategic approach that goes beyond transactional incentives. By focusing on engagement, targeted rewards, emotional connections, and accessibility, businesses can create effective loyalty programs that maximize customer lifetime value and deliver a positive return on investment. By implementing these five key elements, brands can foster strong customer relationships and differentiate themselves in a competitive marketplace.
Telesales Specialist at Super Group Convenience
1yThank You for a stunning welcome, I definitely resonate with your approach to business interaction.