While winning new leads and acquiring new customers are key, focusing on retaining existing customers by having effective customer rewards solutions is a growing priority for most marketers. According to the annual State of Marketing research, 63% of top performing marketers believe in and are already using customer rewards programs. An effective customer reward program is one of the best ways to engage and incentivize your most loyal customers on a continued basis. These rewards can include discounts, perks, exclusive benefits or points that can be spent on future purchases.
Focused customer reward programs that align perfectly with business and marketing goals help drive incremental revenue from existing customers, increase Average Order value and frequency of purchase and reduce customer acquisition cost through referrals. But in current times, they also need to be more than just perks, modern shoppers expect brands to emotionally engage with them via various channels and hence adding a personalized touch can help build trust and long term loyalty. Because loyal customers spend more with your brand which means higher profits. Did you know that increasing retention by just 5% can boost profits by 25%-95%?
An effective customer rewards solution is a treasure trove of data about customer preferences, and their purchasing behavior and also delivers useful insights on who your most profitable customers are. This data can be further used to build personalized offers and rewards that can be appealing to your targeted customers and help your brand prioritize marketing efforts in order to yield higher revenues. Specially when the economy is dwindling, allocating resources toward retention and running well designed customer reward programs becomes more important than ever. However, it takes research, consistency, new and fresh rewards, amazing customer experience, customer data, strategic planning and omnichannel experience to spin up a great loyalty program.
Most sought after customer rewards programs:
- Starbucks Customer Reward Program – One of the most popular programs, Starbucks’ omnichannel capability lets customers check their card balance, points and mobile orders via phone, website, in-store or the app and this drives engagement . When you purchase something at Starbucks, you get ‘Star Points’ which you can redeem for rewards. The more stars you earn, the more rewards you get. Customers can also pay via your mobile app and get notifications of special offers and seasonal drinks. In addition to this, they can also earn birthday rewards, free in-store refills and double star days when they make a purchase and earn twice the points.
- Sephora Beauty Insider – This customer reward program enables you to earn points on all your purchases and lets you redeem them for rewards. There are three tiers in the program; White, Black and Gold and benefits include private sales, exclusive events, offers on favorite brands, birthday surprises and a gift of your choice on every 200 points.
Here are some benefits of effective customer reward programs:
- Customer rewards drive repeat business because loyal customers are more likely to keep purchasing with you and coming back for more.
- When customers feel esteemed, they will patronize your brand even more and that would mean more referrals and word of mouth.
- They increase average order value, improve CLV and reduce the cost of acquisition. Research states that loyal customers buy 90% more frequently, spend 60% more per transaction and deliver 23 % more revenue and profitability than first-time purchasers. Even during difficult economic times, a well executed customer rewards program can bring more value to your brand.
We, at Annex Cloud, are always enthusiastic to understand and assess your business goals so that we can offer you custom customer rewards solutions designed to retain your most valuable customers. Given today’s challenging economic environment, customer retention has never been more important. To illustrate my point, here are some quick loyalty metrics for our client, Jenni Kayne:
- Frequency of purchase (FOP) increased by almost 11%
- Unique member purchases increased by over 350%
- Member revenue increased by over 400%
- Registered members increased by over 240%
For additional information and a free demo from one of our product specialists, get in touch with us today!