Loyalty Programmes – Do They Work?

It is a little known fact that new customer acquisition is five times more costly than retaining existing customers. Moreover, your current customers will outspend your new customers by up to 31%, and they are 50% more likely to buy your new products. Whether you presently use a loyalty programme to generate repeat business, or you have yet to try this promotional technique, the data just mentioned highlights the value of a good customer loyalty scheme.

What Is A Loyalty Programme?

Loyalty programmes are used by both B2B and B2C businesses to reward customers who regularly buy services or products from your business. Customers who participate in these programmes might receive discounts, exclusive services, or even priority access to newly released products. For them to work well, these schemes must offer enough benefits to divert customers from drifting elsewhere. Sainsbury’s Nectar Points scheme and Costa Coffee’s loyalty stamps are good examples of successful loyalty schemes on the high street, where points are accumulated with each purchase, and can be exchanged for free products.

Do Loyalty Programmes Work In Digital Marketing?

Although these ideas are good in isolation, taking a strategic digital approach to attracting customer loyalty can work wonders for your brand. If you have a loyalty card app or digital loyalty programme, for example, customer data can be digitally stored for further marketing purposes (with user consent, of course). This data is easy to access and interpret, which allows you to learn more about your customers, their motivations, and their spending habits. This knowledge can play a key part in future growth plans.

Linking A Loyalty Scheme With Email Marketing

Typically, customers will have to submit their email address to participate in a loyalty scheme. This means that you can send them automated emails to educate them about your brand. Also, you can ask them to share their interests, shopping habits or other personal data, in return for additional rewards.

Once you are more familiar with your customers, you can make them feel appreciated and special - which fosters a sense of goodwill towards your business. For instance, a fitness brand could conduct a survey regarding exercise habits, then send out emails personalised to different customers. A business development partner, like JDR, can set up emails to be broadcast automatically on certain dates, and to certain segments of your prospect database, based on their behavioural cues.

It is also possible to gather customer information without asking people to do anything. It is easy to obtain data about who reads emails, follows links and visits your website. These statistics are useful for finding other prospective customers, who are likely to engage when they discover your brand.

Expert Digital Marketing Support

So, in answer to the question we asked in the article title, yes; customer loyalty programmes are extremely beneficial for businesses, but they do take time and dedication to run effectively. The programme you choose should deliver a meaningful and relevant incentive and be designed for a specific purpose – e.g. to increase lifetime customer value, gain feedback, or market other services.

For the best results, your loyalty programme should also be integrated with your other digital marketing channels, especially your efforts on social media and email marketing. Our digital marketing team at JDR can help you develop a loyalty programme that is tailored to your specific business goals. Contact us today to find out more.

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