In this article we’ll explore our top tips for driving more impact from your loyalty program in 2024. We’ll dig into the tactics you should consider in order to deliver more returning customers, more repeat purchases and more growth.
In order to drive the greatest success from your loyalty program in 2024, we recommend focussing on:
Reducing guest checkouts
Guest checkouts are the enemy of your loyalty program. If a shopper checks out as a guest then you relinquish your right to contact them outside of transactional information, and you lose the opportunity to build an ongoing rapport with them, or encourage them to come back for another purchase. Guest checkouts are a problem at all times of year, however you can expect to see them spike during sales periods as you acquire more customers who don’t yet have a relationship with your brand.
To minimize guest checkouts, we recommend:
Deploying onsite notifications throughout the shopper journey to encourage buyers to create an account in exchange for points before they check out
Using post-purchase emails such as order confirmation and dispatch notifications to promote your loyalty program, specifically highlighting the fact that customers can earn points for returning to create an account
Enabling customers who do return to create an account to access the historic points that they would have earned on their first purchase had they checked out as a loyalty program member
Regularly reviewing your pool of guest checkouts and attempting to reach them and convert them to account holders. For example, you might consider creating a remarketing audience on Facebook or Instagram, and using it to show them they could unlock a reward should they return to create an account.
Reducing guest checkouts is a powerful lever to increase returning customer rates. The more customers you can enroll into your loyalty program, the more customers you can contact, engage and encourage to return and buy again.
Find out how to implement our account creation rule here.
Re-engaging at-risk customers
Churn is a significant issue for ecommerce stores for two reasons. Firstly, customers who churn are harder to win back as they can pledge their loyalty to a competitor store, and secondly customers who churn before they’ve spent enough to equal out the budget you spent acquiring them cost you money. Your at-risk customers have not yet churned, and can be caught and re-engaged before they do.
We define at-risk customers as those who have not returned to make a purchase within the timeframe that you would expect. This will differ from store to store depending on the types of products you’re selling, and to which demographics.
The top ways we recommend re-engaging at-risk customers are:
Sending points statements and reward available reminders to remind them that they have outstanding loyalty program benefits to use
Surprising and delighting them by crediting them with enough additional points to unlock a reward that they then return to redeem
Moving at-risk customers into a higher tier so that they can engage with more impressive, experiential perks that encourage them to return and purchase rather than churning.
It’s typically easier to re-convert existing customers who are at-risk than it is to convert brand new customers as they’ve purchased from you before.
Planning promotions
Calendars and plans are just as important in loyalty marketing as they are in content, email, event or social media marketing. Your loyalty program provides an excellent vehicle for engaging with customers all-year round, however just as you don’t want to be discounting all year, you don’t want to be giving out too many loyalty points all year either.
We recommend planning loyalty promotions such as double points days in three ways:
Loyalty promotions should be planned to coincide with the launch of new products or collections. We recommend running a bonus points promotion on a particular product that you’re trying to introduce your customer base to as the additional points available will increase conversion to sale, and leave the shopper with more points to return and spend
Loyalty promotions such as double points days can also be planned to coincide with company milestones. For example, you may run a double points day to celebrate reaching your 1000th customer or your 10th anniversary. Or you might run a promotion to celebrate launching in a new geography. These milestones are likely to be promoted across your email and social media channels, and combining the announcement with a points promotion will improve your clickthrough rates and traffic, while also gaining more exposure for your loyalty program
Loyalty promotions can also be planned in line with holidays and celebrations that are relevant to your brand. For example, a food and beverage brand might run a double points day on International Coffee Day, or a health and wellness brand might run a bonus points promotion on National Yoga Day. A vegan brand could run a double points promotion for the whole of January, in line with Veganuary. Tying your loyalty program to wider celebrations gives you more opportunities to engage with customers in meaningful ways rather than with blanket promotions they come to expect all year round.
Planning your loyalty promotions in advance allows you to protect your profit margins by not giving away too many points, too many times a year. It also allows you to co-ordinate your loyalty program with your wider marketing activity, increasing exposure and enrollment.
You can find out more about how to plan your loyalty promotions here.
Exploring alternatives to discounts
A loyalty program allows you to explore alternatives to discounts, protecting your bottom line and increasing the likelihood that customers will pay full price for your products. These alternatives can be deployed as standalone rewards or as part of a tiered loyalty program structure.
The most popular experiential rewards that can be deployed in place of discounts include:
Free shipping
Double points days
Early access to sales
Early access to product launches
Event and webinar invitations
Exclusive content and tutorials
Free products
Birthday gifts
Invitations to join focus groups
Free styling sessions
Charitable donations
Experiential rewards are a powerful way to ensure that loyalty program members feel rewarded and valued. Deploying these rewards to loyal customers in place of discounts can also offset the discounts you may still need to use to acquire new customers. To be effective, they must have a high perceived value so we recommend asking your customers for feedback on the rewards you choose to offer.
Re-evaluating email personalization and segments
Your loyalty program provides plentiful opportunity to segment customers and increase personalization in order to improve your email performance. We recommend regularly revisiting your email segmentation to ensure you are sending the most relevant email messages possible.
Your loyalty program can also play a large part in collecting the zero-party data that you need to drive that segmentation strategy. We recommend using LoyaltyLion’s custom rules in order to incentivize data collection.
You can set up custom rules to collect zero-party data in two ways:
Incentivize customers to complete an online profile including useful information such as their clothing size, skin type, hair type, or allergies.
Incentivize customers to complete quizzes that give you insight into their preferences - for example, what pets they have, what they like and dislike or what kinds of products they typically use.
Use your loyalty program to motivate customers to share their data, and then use it to segment customers and send them the most relevant and personalized messages possible. In turn this builds trust and demonstrates that you are using their data in a trustworthy manner.
Find out how to set up custom rules here
Increasing review collection
Collecting user-generated content (UGC) is vitally important for converting new customers more effectively, and your loyalty program members are the most likely to take the time to leave a positive review.
We recommend using your loyalty program to support review collection in two ways:
Ensure that you are using loyalty points to incentivize customers to leave reviews. This helps them build up their points balance in between purchases but helps you generate more UGC
Incentivize different types of review with different points values. For example, you might offer 50 points for a text review, 100 points for a photo review and 150 points for a video review. This enables you to collect a wide range of reviews that are of greater use to prospective customers in their purchasing decisions.
We recommend using the reviews that you collect within your loyalty program in a number of ways including:
Within social media posts and adverts
On product pages
Within email newsletters
See which reviews providers LoyaltyLion integrates with here.
Generating more referrals
Your loyal customers are your secret weapon when it comes to cost-effective acquisition. We recommend regularly motivating program members to refer their friends and family because traffic and visitors generated from referrals is typically more likely to convert, and costs you very little to acquire.
When it comes to increasing referrals, we recommend:
Ensuring that you are giving enough points for both referrer and referee to really see the benefit in order to ensure that they convert
Customizing your referral messaging so it matches the rest of your brand and marketing materials and feels like a natural part of a customer’s journey
Enabling post-purchase popup reminders that prompt customers to make a referral as soon as they complete their purchase
Incorporating referral requests into post-purchase emails
Encouraging customers who leave a positive review to return and make a referral as well while they are at their happiest.
The more customers you can acquire through referrals, the less dollars you will need to spend on advertising. Plus, referred customers come with a preconceived level of trust in your brand as they have been recommended by somebody whose opinion they value.
Find out to set up the refer-a-friend rule here.
Understanding customer lifetime value (CLV)
One of the main metrics that your loyalty program can influence and improve is customer lifetime value. It is a metric that represents the total net profit a company can expect to generate from a customer throughout their entire relationship. Loyalty program members typically have a higher CLV as they are more likely to repeat purchase, have a higher purchase frequency and typically have a higher average order value too.
It’s important to understand and track your customer lifetime value for three reasons:
So that you can evaluate the performance of your loyalty program and understand the positive impact it’s having on your store’s revenue by comparing the LTV of members vs non-members
So that you can understand who your most loyal and valuable customers are and keep them engaged with the most rewarding experiences
So that you know how much you can afford to spend on acquiring a new customer, and how long it will take for that customer’s lifetime value to offset the cost of acquisition.
Having a good handle on customer lifetime value enables you to make more informed decisions both inside and outside your loyalty program.
Find out how to track CLV within LoyaltyLion here.
Do you need help moving your loyalty program forward in 2024?
Need a hand setting up any of these strategies? We’re here to help - just contact support@loyaltylion.com.