Make your customers smile with tips on rewards programs, customer retention, and commerce in general.
Loyalty programs are great for businesses as they provide incentives to customers that encourage them to keep coming back for more deals. These programs are essential to growing your customer base and they provide mutually beneficial advantages. There are many different types of customer loyalty programs for customer retention to choose from, and here are 8 you should know about!
With the points program, the customer takes certain steps and is rewarded with points that go towards future purchases. These points can also be gifted on special occasions such as the holidays or the customer's birthday, and they can be traded for discounts and other rewards. The good part about the points program is that it is highly flexible. It is also very easy and simple to use, and since it does not give direct discounts, businesses do not have to worry about their competitors. On the downside, since the system revolves around saving points, it may take a while for the customer to accumulate enough to use it. Although it is a frequent program, the results are short-term, as once the customer uses their points they must begin from the start to accumulate them again.
Spend programs look a lot like the purchase program, but the difference is that this program only earns the customer points if they spend money. This kind of program is usually used in the fashion industry, and encourages the customer to increase their average spending when they visit the store. It also encourages them to shop more before the time period of the offer runs out. The benefit of the spend program is that it is easy to use and requires less maintenance than the points program. It helps retain customers by rewarding them with coupons and discounts after they spend a certain amount of money. On the downside, it provides less information about customer data than other programs, and by giving your customers a direct discount this program may cost you more in terms of rewards.
Tiered programs are similar to the points system but more advanced. After accumulating a certain number of points, customers will be upgraded to the next tier to receive even more exclusive benefits. These programs are becoming more popular as they allow you to target your customers more precisely. They offer good value for service providers, the travel sector, and even luxury web shops. Since the program targets VIP customers, they will bring you the most value. A disadvantage of this program is that it is not intended for new customers. They may not see the direct benefit and are less likely to join.
Subscription programs are paid for by your customers. An example of this service would be Amazon Prime. The customer will pay a certain amount to receive exclusive benefits that are not provided to regular customers, and it provides an incentive for them to return after making a purchase because they know that they are paying for benefits. These kinds of benefits do not cost more money and time, but the money that your business can earn on these customers is worth the investment. Some of the pros are that the customers receive high value and if you communicate it well they will be attracted to the offer. Additionally, the program is highly targeted and allows you to reward your most loyal customers. On the downside, first-time customers are not likely to use this program. Also, the initial payment for a monthly subscription can deter some customers.
The coalition program connects several brands or companies together to drive purchase behaviour and boost the value that customers get from purchases. These programs demonstrate strong brand penetration through various levels and types of businesses. If you are a small business that wants to secure a partnership and grow the value of your brand while also increasing visibility and potential footfall, the coalition program is a good option for you. Although these partnerships can be tricky to setup and maintain, the end results are worth it. The main risk, however, is that if you partner with a bigger group that supports an unlimited number of other brands that are not associated with yours, customers can earn points with you and redeem them at your competitors’ stores.
Game programs encourage repeat customers and can solidify your brand’s image. Contests and sweepstakes can, however, make your customers feel like you are twisting their arm to win business. To prevent this perspective, make sure that your customers feel like they are really getting a good reward for their time. The odds in these programs should never be lower than 25%.
Rebate and cash back programs help customers earn money from previous purchases, by letting them redeem money after a certain amount of time or set amount. Generally, the rebate is a percentage of the total value of purchases within a set time, and is provided in the form of a gift certificate to bring customers back into the store. In some cases, it can be used as cash, but the customer may want to use that money in a different store.
A discount program provides a certain dollar amount or percentage off a purchase. This benefit can apply to either a specific product or an entire purchase value. The instant benefits of this program help boost customers’ confidence and perspective of your brand, and can encourage them to come back again. This is because the discount program provides instant gratification, and is easy for both the business and the customer. On the down side, it sends the message that regular prices are too high, lowering the value of the product.
When it comes to creating a customer loyalty program for your business, you have a lot of options. While each program comes with its own set of benefits, combining some or all of these options using one program will ensure greater success for your business. If you’re looking to launch a customer retention program or want to set up any of these loyalty marketing programs, check out Kangaroo Rewards. Our platform offers all of these loyalty program options in one convenient app that allows you to attract, engage, and retain customers in an automated way, with minimal effort and at an affordable cost. When you start leveraging your own customer database, you’ll be amazed at the results—Kangaroo Rewards helps you engage your customers and foster better customer experiences. Contact us today to request a live demo and learn more about how we can help you launch your customer loyalty program. For more information about out plans and pricing, visit our web site.