More and more brands are now adopting the concept of loyalty program rewards to retain customers. Research shows that over 90% of companies, whether small, medium, or large enterprises, have a loyalty program today. Businesses must have effective strategies to boost customer retention and stand out in a competitive market.
Running a loyalty program is the most used and effective way to encourage customers to stay loyal to a particular brand.
Loyalty program rewards motivate customers to turn into repeat buyers. However, a loyalty program will work only if it aligns with the interests of the customers and the business. A loyalty rewards program that works for a large-sized business might not be suitable for other small brands.
Here are some best loyalty program ideas for small and medium enterprises:
1. Loyalty Points
Points-based programs are one of the most common loyalty programs for businesses of any size. Such loyalty programs aim to motivate customers to stay loyal to a brand. Under these programs, customers receive a few points every time they purchase.
The number of points is fixed against a certain amount spent on the brand. For example, you can offer 10 points on every spend of Rs. 100 to your customers. If they make a purchase worth Rs. 1,000, they receive 100 points.
These points can be redeemed against various options available at a rewards portal or in the form of store credit that is redeemable for future purchases. You must ensure that the loyalty points are valuable for your customers to make these loyalty programs successful.
If your rewards program is not interesting enough for your customers, it cannot encourage them to repeat purchases and stay loyal to your brand. When the loyalty points are valuable, your customers feel they are getting something in return for their spending and will be motivated to repurchase.
2. Referral Purchase Rewards
Referral purchase rewards are the rewards/benefits customers receive for referring a product to their friends. Under these programs, your referring customers and their friends (to whom they refer your products) get some benefits.
However, the terms and conditions for receiving the rewards can be different with different referral programs. Some programs offer rewards/discounts as soon as customers refer a friend. However, other programs reward them only when their friend signs up or makes a purchase.
The latter is a better option. You can run a referral purchase rewards program under which your customers receive decent benefits when their friend signs up to your website and makes a purchase. You can also keep different rewards for different levels in the referral process.
For example, your customers receive a certain number of reward points when they refer a friend, then they get a discount coupon when their friend signs up, and finally, they get a gift when their friend makes a purchase.
Referral programs are a great way to expand your market reach and acquire new customers. You can encourage your customers to make more and more people aware of your brand. The programs help you increase your brand awareness through word-of-mouth and boost sales.
3. First Access
Giving your customers the first access to your new products, flash sales, and discount offers is also an effective way to boost customer loyalty. Whenever a new product is launched, you can make it accessible to the registered customers on your website before it is available to others in the market.
Another way is to provide your customers early access to flash sales, discount offers, BOGO deals, etc., via e-mails or text messages.
With these loyalty program techniques, you can encourage your target audience to become your registered customers. Also, as your existing customers feel special when they get early access, they promote your brand through word-of-mouth.
The early access strategy works better for online businesses, where purchase does not require registration.
4. Charitable Activities
Giving back to society can be the best reward sometimes. Your rewards program can give your customers opportunities for charitable donations. Offer loyalty points to your customers for their purchases and let them redeem their earned rewards against charity.
Such programs can encourage socially conscious consumers to stick to your brand as they get to contribute to the charity through you. You can include different charity options in your reward redemption program and allow your customers to choose what they prefer.
Once they accumulate a certain number of loyalty points, the equivalent amount gets donated to charity in their name. The program becomes more effective when your charity partners are related to your brand.
5. Pay Later Accounts
Most top e-commerce companies provide ‘Buy Now Pay Later’ options in partnership with financial services companies. Pay Later is a small line of credit that allows customers to purchase and pay for it over a month or in installments.
The pay-later option makes it convenient for customers to make frequent purchases. Moreover, they often spend more than they would without this credit option.
By providing pay-later and EMI options to your customers, you can make them feel that you trust them and understand their needs. Customers with a line of credit with a brand are more likely to stay loyal to it.
6. Freebies
Who doesn’t like getting free products? One of the most effective ways to retain customers is by offering them freebies. Whenever your customer makes a purchase, surprise them with a random free product.
It can be anything as small as a free pair of matching earrings with the main outfit. If you have launched any new products, the best way to make your customers aware of them is to send them free samples along with their purchase.
You can also let the consumers redeem their loyalty points for a free product. The redemption options can include other brand vouchers, discount coupons, etc., to make the program more exciting. Using the word ‘free’ in your loyalty programs can be much more effective than it seems to be.
7. Limited Period Offers
Keep coming up with limited-period offers exclusively for your customers. When your customers make a purchase, you can provide them with a discount coupon that is only valid for a short period. Make the discount offer exciting enough to motivate your customers to visit your store back before the offer expires.
Offering great discounts for a limited duration creates a sense of urgency in your customers and prepone their purchases.
How To Build a Loyalty Program?
Almost every brand runs a loyalty program to retain customers today. However, the loyalty rewards program can be considered effective when it adds value both to the customers and the brand.
Here are some important points to consider when building a customer loyalty program for your business:
- The loyalty program must offer value to your customers. If the customers don’t find your loyalty program rewards valuable, they may not feel motivated to repurchase.
- Tie the rewards back to your brand to make the program more effective. You can offer rewards or cashback that the customers can redeem against your products.
- Keep a mix of instant and premium rewards for different segments of customers. Not every customer is loyal. Before offering premium rewards and benefits to boost loyalty, you can identify long-term customers and one-time buyers coming for discounts.
- Make sure that the rewards program is cost-effective for your business and that you don’t spend without analyzing the results.
Set up a Loyalty Program with RewardPort
RewardPort is one of the top loyalty program solution providers in India. With RewardPort, you can set up a loyalty program that works for your brand and fulfills your customer needs. Experts at RewardPort can plan and execute loyalty program strategies according to your business goals and consumer profile.
RewardPort helps you provide loyalty program rewards online and offline as your budget and consumers allow.
Frequently Asked Questions: –
How do loyalty program rewards work?
Loyalty programs are the programs that businesses use to boost customer loyalty. Customers get some sort of reward every time they spend on a brand. These rewards can be in the form of loyalty points, cashback, or store credit. Customers can redeem the rewards against future purchases or other options from the brand.
What types of loyalty program rewards are most effective?
Some most effective types of loyalty program rewards are store credit, loyalty points, rewards redeemable against charity, referral rewards, etc.
What are the benefits of offering loyalty program rewards?
Some significant benefits of offering loyalty program rewards to customers include:
- Effective in customer retention
- Encourage customers to spend more
- Help you increase brand awareness through word of mouth
- Improve customer experience
Frequently Asked Questions
How do loyalty program rewards work?
Loyalty programs are the programs that businesses use to boost customer loyalty. Customers get some sort of reward every time they spend on a brand. These rewards can be in the form of loyalty points, cashback, or store credit. Customers can redeem the rewards against future purchases or other options from the brand.
What types of loyalty program rewards are most effective?
Some most effective types of loyalty program rewards are store credit, loyalty points, rewards redeemable against charity, referral rewards, etc.
What are the benefits of offering loyalty program rewards?
Some significant benefits of offering loyalty program rewards to customers include:
Effective in customer retention
Encourage customers to spend more
Help you increase brand awareness through word of mouth
Improve customer experience
