A Loyalty Program, if created and implemented in the right manner, can bring incredible growth to a business. Many D2C brands in India are missing out on the fundamentals of building brand loyalty. The Indian D2C market is estimated to grow to $100 billion by 2025, which shows the level of competition arising in the industry. Succeeding in such a competitive market is a challenge. But if you understand what it takes to set your brand apart from others, you win the game.
One of the most important factors determining the success of a brand is brand loyalty. This is why businesses are now investing more and more in building loyalty programs to retain their customers. Loyalty programs are the strategies used by businesses to boost brand loyalty and improve customer experiences. Customers love it when they get valued for their purchase and this is exactly what loyalty programs aim to do. Before you start looking for a loyalty program company, you must be aware of the importance of boosting customer loyalty:
Why Customer Loyalty is Important for D2C Businesses?
D2C businesses are facing more competition than ever before, especially online ones. To stand out in such a competitive market, it becomes important to focus on building brand loyalty and improving customer experiences. Studies suggest that loyal customers spend 25% more per transaction than other buyers. Moreover, acquiring new customers can be much more expensive than retaining the existing ones.
Most D2C companies in India focus more on customer acquisition than customer retention. However, that should not be the case. It is fine to invest in acquiring customers. But to recover high customer acquisition costs, retaining existing customers is also equally essential. One-time buyers are less likely to become brand loyalists. Loyal customers generally feel emotionally connected with the brand and they tend to purchase more often.
A loyalty program does not only help your business increase repeat purchases, but it also enhances your customers’ experiences. Your customers feel valued when they get rewarded for their purchases. As a result, they start purchasing frequently to earn more rewards. This is how the benefits of loyalty programs are not just restricted to customer loyalty, you can also acquire new customers and improve their overall experience.
Every D2C business needs to earn customer loyalty to beat the competition in the market. Here are some most effective loyalty program strategies for D2C businesses. Make sure that you look for these features while choosing a loyalty program company:
1. Start with Reward Points/Discounts
Reward Points-based programs are the most basic type of loyalty program. Under these programs, customers earn a certain number of loyalty points every time they purchase from a brand. The monetary value of these reward points is decided by the brand only. If you are trying to start with a cost-effective loyalty program for your D2C brand, a reward points-based program would be the best option to consider.
You can build a separate portal to run the loyalty program, where your customers can log in to track their rewards and redeem them. Make sure that you offer some great redemption options. If the redemption options are not good enough to excite your customers, they will not be interested in earning more rewards. Allowing your customers to use the reward points against their next purchase is also a great idea to encourage your customers to come back.
2. Include Gamification
Gamifying your reward program strategy makes it even more interesting for your customers. Gamification is a powerful tool that helps businesses in maximizing the benefits of loyalty programs by keeping their customers engaged. Along with increasing the level of excitement, it encourages your customers to keep coming back for more. Below are some great examples of gamification strategies to boost customer loyalty:
Spin to Win Contests
You can run Spin to Win contests on your website or app and allow your audience to Spin the Wheel once every day. This encourages them to log in to your app regularly to earn rewards or prizes. It can benefit your business in two ways. First, you get more app downloads and log-ins. Second, people who win discount coupons/rewards will make purchases to redeem these rewards.
Top-Spenders Leaderboards
Having a leaderboard for top spenders is another effective gamification strategy. You can add a leaderboard to your website, where your customers can check real-time top spenders of the day, week, or month. It encourages them to spend more to see their names on the top of the leaderboard.
Referral Contests
Running referral contests is the most cost-effective way to acquire new customers while improving the experience of your existing customers. You can keep different rewards for different stages of referral. For example, offer a 10% discount on referring to a friend, a 30% discount when they sign up, and a 50% discount when they make their first purchase.
3. Promote Loyalist To Higher Tiers
A tier-based loyalty program also works amazingly well. As a D2C brand, you must understand that not every customer is equally loyal. There are customers who really like your brand and prefer you the most. Also, there are other customers who only consider you an option and might switch as soon as they see another opportunity. More loyal customers deserve better rewards as they play a significant role in the success of a business.
You can come up with a loyalty program with different tiers. Many D2C businesses are already having such programs. The more your customers purchase, the higher tier they get promoted to. And a high tier means better rewards.
For example, suppose a brand has a loyalty program with three tiers A, B, and C. The customers enter tier A on making their first purchase. In this tier, they get 5 Reward Points for every Rs. 100 they spend. As soon as they complete 10 purchases, they enter tier B, where they earn 10 points for every Rs. 100 they spend. Once they complete 50 purchases with the brand, they enter tier C and start earning 20 points for every Rs. 100 they spend.
4. Provide Proactive Assurance To Your Customers
Loyalty programs are not just about offering rewards and discounts to your customers. You also need to focus on enhancing your customers’ experiences and making them feel good about your brand. You can ensure this by providing proactive assurance to your customers. Make sure that all their questions are answered and their doubts are resolved. This is why many D2C brands are adding AI chatbots to their websites and apps.
If your business is online, you can add AI-powered chatbots to your website. With this, you can ensure that your customers’ queries are resolved quickly and with maximum accuracy. Even if you run an offline business, make sure that you have some support representatives present at your offline store. It gives a sense of satisfaction to your customers and boosts brand loyalty among them.
5. Reward Your Most Loyal Customers With Unexpected Gifts
The most loyal customers of a business are the most precious ones. You can identify brand loyalists by looking at your customer data. It is important to value these customers and appreciate their loyalty. You can do this by sending them personalized messages and small surprise gifts on special occasions like their birthdays. It helps in building stronger relationships with your loyal customers, encouraging them to stay connected with the brand for a longer period.
Boost Your Brand Loyalty With RewardPort
Being one of the top rewards and loyalty program providers in India, RewardPort helps businesses in strategizing and running the most effective loyalty programs. The team of marketing experts at RewardPort has already executed loyalty programs for several leading brands.
Taking every detail of your business into account, RewardPort can help you run a loyalty program that aligns with your brand objectives. With lost-cost rewards and the best marketing strategies, RewardPort can help you boost repeat purchases within three months.
Frequently Asked Questions: –
What type of marketing is a loyalty program?
A loyalty program s a type of marketing strategy that businesses use to retain their existing customers and improve their overall experiences. Though the major goal of these programs is customer retention, they are also effective in attracting new customers.
How do companies use loyalty programs?
Companies use loyalty programs to encourage their customers to keep buying by rewarding them for every purchase they make.
What is an example of a company loyalty program?
A great example of loyalty programs run by companies includes a rewards-based loyalty program where customers earn a certain number of loyalty points every time they spend on a brand.
Frequently Asked Questions
What type of marketing is a loyalty program?
A loyalty program s a type of marketing strategy that businesses use to retain their existing customers and improve their overall experiences. Though the major goal of these programs is customer retention, they are also effective in attracting new customers.
How do companies use loyalty programs?
Companies use loyalty programs to encourage their customers to keep buying by rewarding them for every purchase they make.
What is an example of a company loyalty program?
A great example of loyalty programs run by companies includes a rewards-based loyalty program where customers earn a certain number of loyalty points every time they spend on a brand.
