Put Your Customers First and Let them Do the Talking. Get Your Guide on How to Build an Advocacy Growth Engine.
Put Your Customers First and Let them Do the Talking. Get Your Guide on How to Build an Advocacy Growth Engine.
Jake Madrigal, Customer Success Director at Annex Cloud, offers strategic tips, guidance, and best practices for launching a successful loyalty program. Having launched hundreds of reward and loyalty programs, Jake breaks down the six must-dos when launching your loyalty program.
Welcome to the next edition of Annex Cloud Market Movers. This is a sub-segment we're calling Loyalty Levers, where we pull the right levers for your loyalty program to ensure the success and increase revenue from your loyalty program. Today, I'm very excited to bring in Jake Madrigal from our own very team. He has been with us for many years. He's helped us implement tons of successful loyalty programs and we're very excited to talk about the six steps to launch a successful loyalty program. So, Jake, welcome.
Thanks, Al. Thanks for the intro. It's great to be here for part of this discussion. I know a lot of our clients are really concerned with the launch of a loyalty program. So a lot goes into building the program, but they want to make sure that launch is successful. So we're going to talk about six things to set yourself up for a successful launch of the program.
Now, the first thing really that's most important is structuring that program for success. So typically when we look at clients and thinking about how should I structure a loyalty program for my audience, what's important, we think to focus on three different points. The first point being, what are these behaviors that you already know today, drive these KPIs we're trying to influence. That's conversion, retention, increasing average order value. Those behaviors are things that we're going to want to incentivize through the loyalty program number one.
The second thing we look at and want to focus on is what are these behaviors that if we can get these customers to complete them, we know it's giving us more data for remarketing to these customers. Filling out a profile, signing up for the newsletter, signing up for SMS messaging. These are all important aspects of staying in constant communication with the customers and those are things we want them to complete. So we have this data so we can stay in contact with them.
I think the two points that you're pointing out are really important and just want to dive a little deeper so that we can explain better. The loyalty programs, typically people might say it's just all about retention, but what you're saying is a marked difference, which is it's not just about one KPI, which might be retention, it's about improving the majority of the KPIs that they might want to sort of move the needle for, for their loyalty program, at the same time, collecting a lot of great data to allow you to do so. Is that what you're trying to say?
Correct, yeah. And I think a lot of people look at loyalty like you said, retention, retention, retention. What can I get them to purchase a second time and they think about things like discounts or surprise and delight 10% off, things like that. And what we're finding is a lot of companies are relying on these personal and these emotional connections and a lot of that is driven through data that you're able to collect through the loyalty program. So if you can get someone to sign up for your newsletter, give them your phone number for SMS messaging, give them a number of demographic points for their profile, it allows you to better market to them and better personalize to them, which drives that emotional connection for a customer, which then increases my brand advocacy when it comes to that specific brand.
So that's one of those first things that we think is really important when it comes to setting yourself up for success, is structuring that program for success and thinking about what's important to your customers and what's going to drive those behaviors we're looking to drive.
Wonderful. And so once you've set up the structure, what's the next thing that you want to do to ensure success.
Yeah. And I think it's really targeting how you're going to communicate and announce that program to your audience. We have all these members that are newsletter subscribers, that are SMS subscribers, that are followers on Instagram, followers on Facebook. They like you in all of these different areas and one way to successfully release the program is to successfully communicate that program to your environment and to your audience as a whole.
And one thing we think is really smart as starting with those people that you know are advocates already. So we say, "Look at maybe the top 10 to 20% of purchasers within the last year, as well as those people that are highly engaged on social channels, or might be part of already an advocate group that you used to give you feedback for the brand, feedback for site changes, new products, those types of things. So start with that audience, soft release your program with that audience, and then expand over the next couple of weeks with the much broader audience being all those newsletter subscribers, SMS, Instagram followers, Facebook, and attack all of them globally. We don't want to leave out an audience when it comes to launching and announcing the loyalty program."
And it sounds like that communication going from the advocates allows you to sort of work out the final few... I wouldn't say kinks, but potential things that can be improved before you launch out to the masses. So those people are because they're advocates, they'll give you direction and it allows you to do that. And when you launch out to the masses, essentially, including social, I think the important part you mentioned there, there's probably a lot of people that you may not have direct contact with, especially if you're a manufacturer, for example, and you're one level away from your end consumer, they might be following you on social, but you may not have their email address.
Oh, definitely. I think... After the first year of a client, I'm thinking of their program, they have over a million followers on their Instagram profile and one year-end, we saw that they had about 300000 members of the program. So there's obviously a large gap of these 700000 members that we should be focusing on heavily when it comes to that Instagram profile when it comes to that audience because they might be buying the product, they're a fan of the product, but they're buying it in these other locations and we want to make sure they're aware of this loyalty program that is now being offered to the masses.
Great. So we've thought of the right structure, we've now thought about the right communication strategy and the right people or target. What's the next thing we should think about?
So it's not just communicating in these areas, such as emails, such as Instagram, Facebook, or social media profiles. It's also making sure that there is effective and consistent communication across your site experience. So adding these call to actions in locations such as the home page when you launch a program, a loyalty landing page is going to be a big thing that we talk about with our clients and how to communicate effectively on that landing page.
We also want to make sure that any area where you can earn points, we're calling out that ability. So if I'm making a purchase on the product page, I might see if it's a hundred dollar product, earn a hundred points if you purchase this right now. But even on things like signing up for our program, creating an account, call out why this is good. Why are there benefits of creating an account? You're going to become a loyalty member. You're going to earn these specific rewards. You're going to get offers that are only for special loyalty users. And especially when you're going to a tiered based program, it allows you to customize that communication on and on and on throughout that site experience, free shipping for some users, but not in another tier. So that constant communication across the site is a very big piece to effectively communicate in your loyalty program and making it easy to understand at the end of the day.
Yeah, no, that's great, Jake. And I think one of the things that we also discussed offline is there may be some other channels potentially that you may want to do this. If you are an omnichannel retail company, you might have stores that they might have call-outs in. If you're a manufacturer, we've seen some customers do call-outs within their packaging inserts or so on and so forth. Some customers are app heavy. They might have some call-outs within their app. So whichever channels or maybe customer service, if a lot of people are calling in, customer service might be enticed to sign people up to the loyalty program through kind of a phone channel.
So I think these call to actions are important to recruit people and one of the things that we talked about in another video about measuring the success of these loyalty programs, one of the measures of success is enrollment rate and how many people are enrolling in your program. And so to your point, showcasing the benefits of the program in the correct way and communicating that is an extremely important step. So we've built a structure, we've communicated the right things, we've figured out the CTAs across all different channels and we're starting to communicate that. What's next?
So what's next is building this program and growing this program. When it comes to loyalty, it's something that shouldn't just stay stagnant for years to come because a loyalty program isn't something we're launching for three months or six months or nine months. This is a longterm play. This is part of our long-term growth initiative and consumer engagement initiative at the end of the day. So starting small in loyalty is important, allowing you to grow.
And really that's one big part of this structure in this program in setting it up for success is if you want to throw a lot of bells and whistles into it, maybe don't do it, to begin with, don't start large to begin with because if you start large and have to take pieces away from the program, that's what's going to frustrate customers. But if you start small and add new functionality, add new benefits, add new tiers, add new rewards, that's what's going to allow you to constantly communicate these updates, constantly excite customers, it's essentially a surprise and delight feature. So we say start small, allow you to effectively communicate it, and grow over time to build that excitement and keep that excitement going year after year after year.
That's great. And I think you touched on a very important point because people might think of a launch of a loyalty program as this massive big thing and sort of we're done with it now and we can just rest assured and it's just going to work. What I'm hearing from you is a launch might be divided into multiple places. You might start small in a smaller audience first, then you might start with a smaller set of benefits and then as you learn, you can keep it fresh by adding more people, by adding more benefits, by adding more calls to action, by getting more things involved to keep it fresh for the people that have joined as well as get more and more people energized to join that program is what I'm hearing.
Correct. Yeah. I mean, the launch is the start of the relay race, and every time you get to add a new feature, you're passing the baton and you're really building that excitement on an ongoing basis.
Great. And so once we've launched the program, what are other steps that we can do to start keeping people energized and excited within that program to stay and want to avail of the benefits they might be collecting?
Yeah. And I think the benefits that they're collecting, we want to make that easy to redeem, we want to make that easy to use. So whether these are benefits that are part of a tier and they're things like free shipping, or you get some sort of perk or bonus every couple months, we want to make sure that those are things that are effectively communicated and easy to use. Now, if we're talking about rewards that I can go cash in a hundred points for a $5 reward or a hundred points for a product, we want to make sure that redemption is very simple for the customer.
So as a best practice to our clients, we see having this ability within the checkout cart and within the process where I have everything in my cart, I'm going to check out, I see my rewards right there as a line item, I can apply them, whether that's a dropdown, whether that's inputting how many points I want, all of that's readily available to the customer at the point of checkout. We don't want to make this experience where they have to go back to a different step and then come back. So really making that process easy is really effective in terms of the redemption rate, in terms of the engagement rate, and keeping them engaged with that program is making that redemption easy.
Perfect. And I think the key terms I took from it, at least from your conversation, is making it frictionless, making it easy, frictionless for people to buy, but also at the same time give them something they can actually get. A lot of times people have these loyalty programs where the reward just seems too far away and it's so far away, I don't even try. And so sometimes giving me something aspirational, but at the same time achievable, at the same time making it frictionless to achieve and so it's easy to get to and it's easy to redeem is a great point. So I think that's wonderful. So we've created this program, we've got the right CTAs, we've got this launched, we're making incremental updates, we're making it easier to redeem. What's the last thing that you wanted to share that would round this all up for us?
Yeah. I think the last thing is you have to plan to follow up. A loyalty program is not something that you sit there, that you release, that people start earning points and you just expect them to come back and use them. There has to be a followup plan as part of this loyalty communication plan. So we have a number of different emails that we recommend to our clients as best practices, whether that's monthly loyalty statement emails that tell you how many points you have, what tier you're in, how many rewards you have.
And those are basic, but some of the ones that we feel are most important are the ones for maybe a dormant customer who has points, might have enough for a reward, hasn't done anything in six months. That's a customer we should have a triggered email sent to after six months of dormancy saying, "Hey, you have a reward in your account, come back and use that on your next order." Or it's, "Hey, you haven't engaged with us in six months and you might be 20 points away from your next reward. Come back and make another purchase and earn those points and use that on your next order." Or, "You're $5 away from hitting your next tier." Some tiers are based on spend. So we want to be able to effectively communicate. And that's where having all this data pass from the Annex Cloud System directly to our client's email service provider is a key for getting this data in a place where our clients can effectively follow up and effectively communicate with their customers on an ongoing basis.
Perfect. And it actually brings it up to full circle because when we started the structure of the program, we created the mechanics of the program in a way that you've created these KPIs or used the KPIs that you define and in the end, using those marketing tactics to incent people to move towards those KPIs, remind them if they haven't been and create those micro-segments and moving them towards their target, so to speak, through regular communications, through regular emails that you mentioned, would be a great way to get there. Jake, these were six quick and very amazing tips that our customers have used to get their success. Appreciate your time to kind of helping us do this. For everyone else, if you want to go and find out more such tips and tactics will make your loyalty program successful, go to annexcloud.com/marketmovers and we'll be back soon with more videos. Thank you much.