When people think of marketing, most people think of crazy campaigns, ads, and news publicity. While these are all great in their own way, there is a plan that has a better ROI than all of these, and that plan is called the loyalty plan.
What is a loyalty plan?
A loyalty plan is an actionable plan that is designed to increase your value offering by rewarding customers for doing business with you. Loyalty plans are designed to reward customers for doing business with you, marketing your business for you, and staying loyal. The end goal is to build brand loyalty that will increase your customer retention and acquisition rates.
Why you need a loyalty plan?
We all know why it is important to have a business plan, financial plan, and marketing plan. But why do we need a loyalty plan? Loyal customers are not only cheaper to retain, as opposed to acquiring a new one; they spend 67% more than new customers according to (Edelman), and are 60% more likely to tell friends and family about a brand they are loyal to (Yotpo.) Being that 81% of U.S online consumers’ purchase decisions are influenced by friends’ social media posts (Market Force) and according to (Nielsen) customers who are referred by a friend are 4 times more likely to make a purchase; it is clear that building customer loyalty is one of the best things you can do for your business.
The most successful companies use it.
Amazon Prime boasts a record 100 million members and is still continuing to add more features and members at record rates. Jeff Bezos has stated many times that his focus is Amazon’s customers. This focus has created tremendous value for customers and in return tremendous growth for Amazon. Amazon is set to take half of U.S eCommerce sales in 2019. So how did Bezos go from garage startup to overcoming Walmart, Barnes & Noble, and everybody else? He focused on the customer and adapted to the times, in essence; he created a loyalty plan. Toys R Us, Sears and Kohl’s are all staples in our lives and well-recognizable brands, so why did Toys R Us fail and why is Sears liquidating if we all loved them so much? The answer is we may have loved them, but we were not loyal. Toys R Us and Sears failed to focus on the customer and failed to keep our loyalty. Kohl’s, on the other hand, continues to be progressive with their loyalty program by rewarding customers in many ways like with Kohl’s cash and their mobile app. A successful marketing campaign builds brands awareness, but brand awareness is only as good as the loyalty that comes with it.
Use a loyalty plan to survive and thrive.
Amazon is taking over the eCommerce market and sites like Shopify are making it easier for everyone to open an online store. If you want to stand out, survive, and thrive; you need to create loyal customers. In order to create loyal customers, you need to assess your value offering and work to increase it. Your value offering is a measurement beyond price and quality. Value offering is the combined value that your customer receives when doing business with you. In order to assess your value offering, you should make a list of every touch point with your customer such as level of support, rewards, incentives, price, discounts, quality, speed, personalization, points systems, etc… and compare each one to your top competitors. Once you have evaluated your value offering, you want to see in which areas you can improve upon. The end goal is to have a greater value offering than your competitor.
How to create customer loyalty plan.
When creating a loyalty plan it is important to have it well-rounded. The best method is to focus on the 8 points of loyalty and determine how you will implement each into your loyalty program. The 8 points of loyalty are:
Personalization. How are you going to scale personalization? Personalization is more important and easier than ever to implement. By using AI and membership accounts you are able to increase the likelihood of a customer purchasing by recommending products that they are interested in. You are also able to great the customer by name on both the webpage and when talking to them on support. This is actually a way that you can beat large companies like Amazon. The larger a company is, the harder it is to provide a personalized experience.
Listening. How are you going to listen to your customers’ wants and concerns? Being proactive and listening to your customer is the best way to avoid costly lessons. Airline KLM is a great example of a company that is listening to its customers. KLM has an entire team dedicated to monitoring social media, responding to posts, and making adjustments accordingly. For eCommerce, this is also becoming easier to do with many tools that will monitor your online presence and notify you of any interactions. AI is also a great tool that is able to monitor customer trends and provide you with deep analytics that allow you to make quick adjustments.
Support. How and where are you going to provide the best support possible? Customers don’t want to talk on the phone anymore. Customers who have a bad support experience are most likely not to return, while customers who have a positive support experience are more likely to be loyal to a brand. Your support needs to be focused on the customer and on the channels that the customer prefers. The majority of customer prefer to speak with a brand via social media.
Mobile. How are you going to make your system mobile? According to Statista, almost half of online sales are now mobile. Having a mobile application is becoming more and more important. The best method when going mobile is to make sure your site is optimized for mobile and also include an app. The best way to get customers to download your app is to provide your customer with an incentive for downloading it.
Points. How can you share your goals with your customers using points? People love to earn… even if they are technically spending. Having a points system is a great way to reward customers for activities that help grow your business. The best method for creating points systems is to make your goals, your customers goals. If you need more social shares, then reward customers for sharing. If you need to sell more of a product, then reward customers for buying that product. Make sure that the points are worth it and have real value. In the end, it is still more cost effective than paid ads.
Coupons. How can you provide coupons that entice your customer to return? Customers prefer discounted rather than cheap. Coupons are a great way to encourage customers to come back. With so many digital options like Groupon, coupons are a great and easy way to attract new customers.
Value. How are you going to increase your value offering? Create the value offering checklist and create a plan to increase your value offering. How are you different from your competitors? Why are you better than your competitor? Why are customers going to love you and be loyal to you?
Referrals. How will you reward customers that refer you? Happy customers are your best salespeople… reward them well. People trust friends, family, and regular recommendations. By rewarding customers for referrals you are essentially creating a large sales team that is much more effective and affordable than a regular one. This is where you should be willing to spend a little extra. You can reward customers for referrals using points, free products, cash back, discounts, and more. One thing that is becoming very popular is rewarding customers with attention. Everybody wants to be a social media star these days and often customers will share a post for a chance to be featured on your page.
