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3 Necessary Steps to Improve Customer Loyalty in Retail

Any retailer knows that cultivating customer loyalty can provide many benefits and cost savings. From an enhanced brand reputation, to repeat business, potential savings when it comes to marketing costs and it can also increase your customer lifetime value. According to Forbes the probability of selling to a current customer is 60% to 70%.

Achieving and maintaining customer loyalty, particularly in a much busier marketplace in the digital era isn’t always easy. This careful cultivation requires genuine effort, sincerity and consistent action to understand and meet a customer’s needs. However, taking a three-step approach can make it a lot clearer on exactly how to target and foster that customer loyalty.  By implementing these strategies, you can not only retain your existing customer base but also turn occasional buyers into loyal brand advocates.

Step 1: Get More Customers to Sign Up for Your Loyalty Programme

Having a solid loyalty programme can help build repeat business and customer retention. Any loyalty scheme is a direct channel to reward customers, encourage repeat purchases, and also collect valuable data on behaviour and preferences to help you make key decisions on marketing and overall direction. Having that level of insight can transform an OK marketing strategy into something incredibly tailored and targeted that drives stronger sales. It’s also a way of levelling up a loyal customer into a brand advocate.

What Are Some Strategies to Incentivise Sign-Ups?

Use Multiple Channels

Not every customer engages with media and communications in the same way. So to maximise uptake, make sure to promote your loyalty programme across all customer touchpoints. This could be your website, social media, in-store smart assistants, digital receipts and more. The more visible your programme, the more likely customers will sign up. Make sure to tailor your messaging to each platform to resonate with that segmentation of your customer base. 

Create a Referral Reward System

You can also encourage your customers to refer new customers by offering them incentives and rewards for successful referrals. This both increases signs ups, but also makes the most of that powerful and trusted word-of-mouth marketing. 

Offer Instant Rewards

We all know that instant gratification can drive motivation to purchase. As a retailer, if you offer instant rewards for signing up for your loyalty programme, the proposition can tempt your customers. This could be in the form of a discount, a gift card, or even a free product. The key with your initial offers is to make it attractive enough to justify the friction to sign up, while also being sustainable for your bottom line. A study found that instant gratification from a loyalty program means that the average basket value can increase by 36%.

offering discounts to enhance customer loyalty

Simplify the Sign-Up Process

More customers are likely to sign up the easier it is to do so. Try to limit the amount of information required to the absolute essentials and try to make sure the process is quick. Another aspect to consider is enabling sign-ups through social media accounts or otherwise removing friction such as requiring passwords/user names etc. 

Educate Your Customers

Sometimes customers don’t sign up simply because they don’t understand the benefits. By using clear and concise messaging to communicate the value of your loyalty programme you can encourage sign-ups.

Offer Multiple Sign-Up Incentives

Offering a voice of sign-up incentives can help to motivate customers with different preferences and behaviours. For example, some might prefer a discount on their next purchase, while others might value bonus loyalty points or a free product.

Use Technology to Enhance Experience

Try and use technology solutions, such as QR codes in physical locations, your receipts or one-click signup buttons on digital platforms, to make joining your loyalty programme as seamless as possible.

Step 2: Engage More Customers Who Are In the Loyalty Programme

The next step to improving customer loyalty is by making the most of the signups you already have. Simply having a large number of signups isn’t enough; customers must actively participate by accumulating and redeeming points. To sustain the programme as a whole, regular engagement is really important. This makes sure that your brand is top-of-mind and reinforces positive behaviours and buying habits. Engaged members are far more likely to make use of offers and promotions, further driving revenue and data collection.

What Are Some Strategies to Incentivise Engagement? 

Make it Effortless Across All Channels

Ensure your loyalty programme is seamlessly integrated across all your sales and communication channels. Whether customers shop online, in-app, or in-store, the experience should be unified. This means points and rewards can be earned and redeemed with ease, regardless of the shopping channel.

Engage Customers Post-Purchase

Incorporating a strategy to engage customers after they’ve made a purchase is pivotal in building a deeper, more meaningful relationship with your brand. This engagement shouldn’t always be about pushing for the next sale or promoting your loyalty program directly. Instead, focusing on delivering relevant and personalized content that adds value to their experience can be significantly beneficial. Whether it’s through tailored recommendations based on their purchase history, helpful tips on how to get the best out of the products they’ve bought, or engaging stories related to your brand’s values, this approach fosters a sense of trust and appreciation. It acknowledges the customer beyond the transaction, reinforcing their decision to choose your brand.

engaging customers post-purchase to improve customer loyalty

Consistent Customer Experience

Maintain a consistent customer experience across all channels. This includes uniform branding, messaging, and accessibility to programme features such as point balance checks, reward redemption, and customer support.

Implement Digital Receipts

Implement digital receipts that automatically credit points to the customer’s loyalty account for each transaction. This can be done through email or a mobile app, ensuring customers don’t miss out on earning points due to forgetting to scan a barcode or present a card.

Partner Integrations

Collaborate with other businesses to allow customers to earn points through them. This can expand the reach of your loyalty programme and make participation more appealing. For example, earning points for trips, flights, or hotel stays can add significant value for customers.

By removing barriers to participation and making it effortless for customers to engage with your loyalty programme across all channels, you can significantly enhance its effectiveness. An omnichannel approach ensures that customers have a smooth, consistent experience, making it easier for them to accumulate points and redeem rewards. This not only increases the programme’s value in the eyes of your customers but also strengthens their loyalty to your brand.

Step 3: Make It Easier For People to Redeem Rewards

Reward redemption is a key indicator of an effective loyalty programme, as it completes the cycle of engagement and reinforces the value of being a loyal customer. Redemption is crucial to the success of a loyalty scheme because customers will soon wise up if they are paying in but receiving no return. 

What Are Some Ways To Encourage More Redemption?

Understand Customer Preferences

Use the data collected to understand and create rewards based on customer preference and behaviour. The more attuned with your customer’s buying style, the more likely those offers will be redeemed. 

Segment Your Audience

Create segments for your audience based on the data collected. This could be purchase history, frequency, location, or even their spend level. By offering personalised rewards to each segment, you again can increase redemption, and additional spend, because you have matched their desires. 

Lower Redemption Thresholds

There is nothing more frustrating for a customer than earning points and finding that they have to spend much more before they can reach any kind of redemption threshold. Think about offering smaller, more attainable rewards that your customers can claim with fewer points. It makes it more attractive and viable for the customer to be able to earn perks more frequently. 

improving customer loyalty through engagement

Provide Options

By offering customers multiple ways that they can redeem their points you provide additional entry points for redemption. For different customers value could be perceived as a free gift, or a money off voucher. Having flexibility in rewards caterers to a wider range of customers, increasing the likelihood of redemption.

Communicate Clearly

Keep your customers well-informed about how they can redeem any rewards they earn. By making sure you communicate clearly across all channels, it will remind them of any treats, perks and rewards available and also any impending expiry dates.

Simplify the Redemption Process

Much like making the sign-up process simple, make redemption simple as well. You want customers to be able to trade in their points in the most frictionless way possible. Think about implementing one-click redemption, or that their loyalty card automatically adjusts the total in-store if they want to redeem money off their purchase. 

Create Urgency

By making some offers and rewards time-limited you can stimulate a sense of urgency and action for any members of your loyalty scheme. This can motivate customers to redeem their points sooner rather than later, increasing engagement with the loyalty programme.

The above steps and action points are a great way to encourage your already engaged customers to engage more. Whether that is increasing their spend from feeling appreciated and listened to, to delighting them in a way that they spread the word to friends, family and colleagues about your store. 

Improving Customer Loyalty Is Better Business

By implementing a strategy for a strong customer loyalty system, and monitoring it in a way that allows visibility on entry points, actions taken, average spend, and lifetime value, you can customise the shopping experience even more.

At the end of the day, loyal customers are the ones that will drive your brand forward through word-of-mouth and social proof. If your customers are happy they extend your reach and impact in the market further than many social media campaigns, advertising slogans and more.

To find out more about how refive can help get you started with or ramp up your existing loyalty programme, or even encourage loyalty in other areas, get in touch today for a demonstration of our solution. 

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