A lot of material is available online on customer reward programs or loyalty strategies, sometimes the information available can be overwhelming. In this brief article, we bring you the ultimate Customer Reward Program Glossary.
Listed below are 26 important things you should know about loyalty and reward programs, plus a bonus.
A for Attrition Rate – A rewards program has a direct impact on customer attrition rate. An effective loyalty strategy will considerably reduce customer churn and have a significant effect on the participation rate.
B for Breakage – Breakage happens when customers accumulate points but don’t redeem them. Sometimes, customers either forget about the points they have accumulated or simply lose interest in the program. It may seem profitable to the brand at first but remedying it is essential to improve the retention rate.
C for Call-to-Action – Customer reward programs have a dynamic structure. Depending on your marketing and business objective, you can choose the desired Call-to-Action and reward your customers for complying.
D for Direct Marketing – Loyalty programs are one the most effective ways of direct marketing. Instead of relying on a third party, you are directly involved in distribution and communication, thereby improving efficiency and saving time and resources.
E for Execution – Execution plays an important role in the success or failure of a loyalty program. Choosing the right loyalty partner to design, execute and manage your program is imperative and will help you achieve higher ROI.
F for Frequency of Purchase – It is a known fact that loyalty offerings increase purchase frequency. Customers buy more often from the brand, to accumulate more points and redeem them for rewards.
G for Gamification – Integration of gamification features in a loyalty strategy helps to improve participation rate and keep things interesting and competitive for customers. It encourages customers to consistently achieve their goals and escalate through the tiers to reach the top-tier category.
H for Higher Returns – A customized and well-designed customer rewards program, can yield higher returns. A small investment can create a community of strong brand followers and evangelists, improve brand credibility and even help to acquire new customers.
I for Increased Engagement – Loyalty strategies are designed to increase customer engagement. A mutually beneficial strategy can encourage genuine engagement and help to build a strong brand-customer relationship.
J for J-Curve – Loyalty studies show a J-Curve pattern, wherein the company in the first phase, invests in the customers and later as the program matures, receives higher gains than their original investment.
K for (K)ommunity – Loyalty programs are designed for long-term benefits and most importantly to build a community of loyal customers and brand followers. Creating an exclusive community creates a sense of belonging and boosts brand loyalty in the long run.
L for Loyalty – Be it retail rewards programs or loyalty programs, their main objective is to instill brand loyalty. By consistent engagement, repeat purchases and extended customer-brand association, you can turn customers into brand loyalists.
M for Market Penetration – By running a long-term program, you can increase your brand reach significantly. Happy customers actively refer the brand and share their experiences with others, helping you with market penetration.
N for New Customers – Market penetration will help you acquire new customers. Also, a referral reward program can further encourage existing customers to positively influence their network of family and friends.
O for Organic Promotions – Extreme exposure to advertising has made customers smarter and they tend to gravitate more towards brands and products that are referred by people they know and trust. Loyalty programs can drive organic promotion and brand marketing, which has a higher efficiency and conversion rate.
P for Personalization – Global brands are adopting personalization strategies in their retail rewards programs to offer better services to their customers and engage them with rewards that excite them. Personalization can improve the efficacy of loyalty offerings.
Q for Quid Pro Quo – The success of loyalty programs is based on the simple formula of quid pro quo. Customers invest their time and money in the brand to earn rewards, incentives and other benefits. This makes the loyalty strategy practical, mutually beneficial and effective.
R for Retention – Customers engaged with a loyalty program, invariably continue their association with the brand for long-term gains. Loyalty programs make retaining customers easy without additional marketing costs.
S for Satisfaction – Customer satisfaction is of utmost importance for retention. Rewards and incentives can tremendously help in boosting customer satisfaction and consequently boost customer loyalty.
T for Targeted Marketing – Customers that participate in the referral program are most likely to refer friends that they think will be interested in the products, in order to improve their chances of earning referral rewards. Referral reward programs are a great way to attract relevant audiences that are more inclined to purchase from your brand.
U for User-Generated Content – User-generated content is the key to organic marketing. By incentivizing social sharing or rewarding customers that actively create content for you on their social media platforms, you are boosting the inflow of user-generated content for your brand.
V for Brand Value – In the long run, smartly designed retail rewards programs can considerably help in improving customer lifetime value, market position and overall brand value.
W for Word-of-Mouth Marketing – 92% of the customers, trust recommendations from people they know. With meaningful rewards and incentives, you can increase brand awareness, positively influence customers and acquire new customers in the process.
X for CX – Customer experience has become the determining factor that influences purchase behavior. By improving customer satisfaction through loyalty rewards you can directly and efficiently improve the overall customer experience.
Y for Year-on-Year Growth – With the smooth execution of your loyalty program, you will experience year-on-year growth. Amplified brand reach, improved customer experience and retention and increased acquisition rate have a direct impact on revenue and sales.
Z for Zero and First-Party Data – In order to earn rewards, incentives and other perks, customers are willing to share their data and other information with brands they trust. Loyalty programs are the most effective means of extracting zero and first-party data legally and ethically.
A is also for Annex Cloud
With Annex Cloud as your loyalty partner, you can design bespoke loyalty strategies that suit your brand guidelines and aesthetics and help you achieve your business and marketing goals. To stand out from the crowd and beat your competition you need to bring your A-game into the arena.
Click here for new-age and highly effective loyalty solutions.