[{"@context":"http:\/\/schema.org","@type":"Article","@id":"https:\/\/www.the-future-of-commerce.com\/2021\/05\/19\/customer-loyalty-programs\/#Article","articleBody":"As digitally native customers set the bar for benefits they want from brands, there\u2019s no margin for error. Retailers need to get customer loyalty programs right or risk losing customers to the competition.\nWhat are customers looking for in a loyalty program? \nWith so many competing customer loyalty programs, retailers need to use every opportunity to differentiate their program and align with the wants and needs of their customers.\nThe most successful loyalty programs are simple and valuable, according to SAP Global Customer Experience Advisor Constance de Polignac. Retailers can succeed by speaking to:\nThe heart: does the customer feel that the brand understands them and provides unique value?\nThe soul: are the brand\u2019s business practices aligned with customers\u2019 beliefs?\nThe head: is the program rational and does it encourage the shopper to check out more often?\nNone of this happens overnight, of course. Customers don\u2019t wake up in the morning hoping to hear from a brand. So you have to create experiences that delight customers and encourage them to earn and redeem loyalty points.\n \nKick ROI, loyalty, and engagement into hyperdrive via great content\n   From e-books to blog posts, videos to GIFs to podcasts, great content marketing wins audiences - even if they reside in galaxies far, far away.  \nWhen these experiences coincide with the three elements above, retailers can benefit from a virtuous circle of customer engagement in which purchase frequency increases, along with customer loyalty.\nOne retailer that\u2019s been especially successful with their customer loyalty program is Starbucks. They make it easy to gain \u201cstars\u201d so that customers can get their first redemption faster. This proves the value of the program quickly. The coffee giant also makes it seamless to redeem and pay via an built-in payment feature.\nCustomer loyalty programs: Best practices for retail success\nThe first step to building a great customer loyalty program is to raise awareness about it. If it\u2019s an obscure offering, then customers won\u2019t make use of it. Get as many customers as possible set up, and then keep your finger on the pulse of the program to see if they like it.\nNext, you\u2019ll need to dig into the data to understand customer behavior.\u00a0What\u2019s driving lifetime value? When do shoppers redeem points? What triggers get them to check out more often? Where is there drop off in your program?\nAnswering all these questions makes it possible to pinpoint the KPI you want to work on, whether that\u2019s increased frequency or changing your NPS. So many companies try to focus on multiple metrics at a time and this simply doesn\u2019t work, de Polignac says. She discussed best practices in the latest episode of the LinkedIn Live series, \u201cKeeping Up with E-Commerce.\u201d\nThe KPI that de Polignac often recommends is frequency: \u201cBecause you\u2019re driving the customer to come back just slightly earlier than he would have had naturally\u2026 you multiply that by the 10 million cardholders that you have\u2026 it turns out to be millions [of sales] every year.\u201d\nDespite the common interest retailers have in encouraging their biggest spenders to spend even more, she advises focusing on increasing consumption of mid-level buyers.\u00a0 \u201cThink of it like this, if you\u2019re at the top of the mountain, you cannot go higher, you just want them to be maintain the top of the mountain\u2026 it will make the difference if those 50% middle segment [get] to the top of the mountain,\u201d she says.\nA strategy that retailers can use is to make sure that the benefits of their customer loyalty programs are visible at least once a year. Base this on the median annual basket size to cater to the middle 50%, instead of focusing on the average, as it\u2019s likely skewed by your biggest spenders.\nBuilding long-term customer loyalty\nRetailers can build on their customer loyalty programs with a continuity or subscription program. There are a few factors that must be taken into account. The product must be high-margin to account for shipping costs, and easily sourced so a retailer can consistently replenish it.\n \n2021 Retail trends: From Boomers to Gen Z, the strategies that dominate\n   What key trends should retailers watch this year? Will consumers stick with online shopping or flock back to stores? We've got the answers.  \nControl is key. VP Product Management, SAP Upscale Commerce, Margie Bell, advises, \u201cWe have to recognize we\u2019re dealing with human beings who go on vacation \u2026 you need to allow them to control the frequency.\u201d That\u2019s better than forcing them to cancel, she adds.\nRetailers must set up flexible continuity programs that also have opportunities to surprise and delight to keep customer engaged. This could mean adding in a complementary item that they are likely to enjoy or offering a one-time free upgrade to the next pricing tier to keep the experience fresh and exciting.\nSubscription programs offer an excellent way to stay top of mind for customers and loyalty programs prove the benefits of being a customer. When used together, these strategies make it that much easier to provide a consistently positive experience and achieve retail success.\nIf you\u2019re not reaching customers on their preferred channels, you\u2019re not reaching customers. Think bigger. Think better. We can help. Find out how HERE.","author":{"@type":"Person","@id":"https:\/\/www.the-future-of-commerce.com\/2021\/05\/19\/customer-loyalty-programs\/#Article_Person","image":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/2021\/05\/19\/customer-loyalty-programs\/#Article_Person_ImageObject","url":"https:\/\/23x6xj3o92m9361dbu2ij362-wpengine.netdna-ssl.com\/wp-content\/uploads\/2016\/08\/lisa-m-james-150x150.jpg"},"name":"Lisa James","sameAs":["https:\/\/twitter.com\/thebookoflisa","https:\/\/www.linkedin.com\/in\/thebookoflisa"],"url":"https:\/\/www.the-future-of-commerce.com\/contributor\/lisa-james\/"},"dateModified":"2021-12-28T22:19:19+00:00","datePublished":"2021-05-19T06:01:06+00:00","description":"Customer loyalty programs succeed by creating experiences that delight customers and encourage them to earn and redeem loyalty points.","headline":"Customer loyalty programs: How brands can create a virtuous circle","image":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/2021\/05\/19\/customer-loyalty-programs\/#Article_ImageObject","height":"630","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2021\/05\/Loyalty_1200x375-1200x630.jpg","width":"1200"},"mainEntityOfPage":"https:\/\/www.the-future-of-commerce.com\/2021\/05\/19\/customer-loyalty-programs\/","name":"Customer loyalty programs: How brands can create a virtuous circle","publisher":{"@type":"Organization","@id":"https:\/\/www.the-future-of-commerce.com\/","additionalType":"https:\/\/www.wikidata.org\/wiki\/Q1193236","description":"Relevant, timely information & analysis on commerce trends, both consumer-facing and B2B.","logo":{"@type":"ImageObject","@id":"https:\/\/23x6xj3o92m9361dbu2ij362-wpengine.netdna-ssl.com\/wp-content\/themes\/hybris_foc\/assets\/images\/layout\/logo-new-2x.png?_=1","height":"96","url":"https:\/\/23x6xj3o92m9361dbu2ij362-wpengine.netdna-ssl.com\/wp-content\/themes\/hybris_foc\/assets\/images\/layout\/logo-new-2x.png?_=1","width":"500"},"name":"The Future of Customer Engagement and Experience","sameAs":["https:\/\/podcasts.apple.com\/us\/podcast\/a-call-for-a-better-experience\/id1479742201","https:\/\/twitter.com\/FutureOfCEC","https:\/\/www.linkedin.com\/groups\/4844282","https:\/\/www.the-future-of-commerce.com\/feed\/"],"url":"https:\/\/www.the-future-of-commerce.com\/"},"url":"https:\/\/www.the-future-of-commerce.com\/2021\/05\/19\/customer-loyalty-programs\/#Article"},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"2021","item":"https:\/\/www.the-future-of-commerce.com\/2021\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"05","item":"https:\/\/www.the-future-of-commerce.com\/2021\/\/05\/#breadcrumbitem"},{"@type":"ListItem","position":3,"name":"19","item":"https:\/\/www.the-future-of-commerce.com\/2021\/\/05\/\/19\/#breadcrumbitem"},{"@type":"ListItem","position":4,"name":"Customer loyalty programs: How brands can create a virtuous circle","item":"https:\/\/www.the-future-of-commerce.com\/2021\/05\/19\/customer-loyalty-programs\/#breadcrumbitem"}]}]