Loyalty programs have been used for many years. The modern loyalty program was first introduced by American Airlines in 1981 and then many companies within and without the airline industry followed.
Since then, loyalty programs have evolved due to progressive retailers which recognized the meaning of a “customer identification tool”. Both businesses and consumers have recognized the value of loyalty programs.
The basic benefits of using a loyalty program is to obtain customer information, to acquire new customers, to understand their behavior and to get closer to your customers.
But then comes the question what should you do to increase customers’ engagement in your loyalty program. There is a variety of ways to get the attention of your members and attract them.
Build real customer relationships based on relevance
Building a relationship with customers can improve behavioral loyalty and furthermore increase profits. If you analyze the human elements of a long-term relationship, you’ll discover one key element which is trust. By building trust among your members you can overcome problems that may occur during your “relationship” and by offering quality they will be loyal to your products without testing them before.
Increase Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV) takes into consideration the customer’s value now and during their lifetime as a customer. Being able to identify customers through a loyalty program means being able to monitor long-term customer lifetime value, and being able to identify the demographic, sociographic, and purchase profiles that define the most profitable customers – that kind of knowledge enables you to target and develop more of them. But how will you get to know them better? Our customer insights solution through extensive analysis helps you have a clear idea of a variety of characteristics of your customers and not only.
Influencing customer satisfaction levels
Satisfaction is important; indeed, essential. if customer satisfaction levels are low, there will be very little loyalty. However, customer satisfaction levels can be quite high without a corresponding level of loyalty. The point is that, while high levels of customer satisfaction are needed to develop loyal customers, the measure of customer satisfaction is not a good measure of the level of loyalty. The two are not measuring the same thing.
Increasing share of wallet
As markets become saturated and customers have so much more to choose from, share of wallet becomes increasingly important. Totally loyal customers would give you a 100% share of spending in your sector. Through targeted personalized campaigns that respond to their needs, you can observe who is more keen to become a buyer in a certain time and finally achieve a reasonable increase in engagement and consequently in share of wallet. Campaign management solutions are the ideal tool for achieving increase of share of wallet.
Brand consistency increases customer loyalty
Every business must develop and deliver a consistently branded experience for its customers. The essence of the brand should be apparent in every interaction a customer has with the company, enabling customers to form an emotional attachment to the brand. The loyalty program provides a truly important vehicle through which you can communicate this brand experience, and through which the consumer can become more attached to the brand.
The loyalty of customers stems from building relationships with them, and those relationships must be managed. This is where CRM comes in. Whether the relationships are so finely tuned as to be one-to-one relationships, or whether they are in bigger segments or groups, the principles of management are similar. CRM’s reputation is improving – it is making a come-back. According to IBM’s research, CRM should be run at the corporate level or with a cross-functional perspective – and when this is the case, there is a 25-60% greater chance of success.
We can consider increasing customer engagement a tough task, but as we are experts in the field, we are all always looking ways to acquire new customers to retain them and to engage them more.