Fun fact: the first loyalty program in the US was established in the late 1700s, when American retailers gave customers copper coins that could be exchanged for future purchases. Loyalty programs have been around for a long time, with no signs of stopping. Why? It feels good to be rewarded for being a loyal customer. Everyone loves discounts and free stuff. But there are reasons some members stop participating, and with their departure, goes a loss of revenue. Customers in loyalty programs spend 18% more than those who do not participate (Accenture), so it’s vital for businesses to know the top reasons that people stop participating in a customer loyalty program and how to bring them back in:
1. Not Enough Benefits
They signed up to get an introductory deal, but that was the last time they ever heard from you.
Keep them by: reaching out! Think of your ideal customer and what would most appeal to them and put together a planning calendar for when you will send your messages. Engage with your fans and ask what kind of benefits would really knock their socks off. Send out an electronic survey with a few options. Give them reasons to keep coming back and let them know how special they are to you, whether it’s a national holiday or just because.
2. Over Communicating
Their inboxes are oversaturated with texts and emails.
Keep them by: from the onset, clearly explaining how often you will send messages and offers so they know what to expect. Then hold firm to your promise. 48% of Gen Xers prefer loyalty programs that send fewer emails (Kobie). A good rule of thumb is no more than one email a week and 2 texts a week max. How do you stand out from the pack? Keep in mind that people open texts more than they do email. 98% of texts are opened within 2 minutes. Make your messages brief and attention-grabbing! Eg. “October is customer appreciation month at [YOUR BUSINESS]. Come see us today for a [BOGO deal].”
3. Taking Too Long to Get Rewards
Members signed up to get points and have been working towards earning rewards, but it’s taking too long to redeem them.
Keep them by: making sure the benchmarks are attainable. 57% of Americans abandoned a loyalty program because it took too long to earn points or miles for rewards (Colloquy). Don’t make them wait 5 years to get a free sandwich. Calculate how often your target audience comes in and make your offers based on achievable results. Also make sure they know where they stand in reaching goals. Roughly 40% of consumers would visit or purchase from a store more often if they did a better job of communicating how many points they have (3Cinteractive).
4. Not Enough Meaningful Content
Customers don’t sign up for loyalty programs for deals alone, they want to receive relevant, meaningful content they can connect with and share…
Keep them by: making your content personal and meaningful. 71% of consumers who are members of loyalty programs say membership is a meaningful part of their relationships with brands (Bond). What do your customers value? How can you enrich their lives and in turn, feel good about your brand? If you own a juice shop, you can educate your customers about healthy lifestyle choices or sharing recipes. If you own a salon, educate your clients by creating an Instagram series on how to make create beach waves, for example, or if community service is part of your mission, highlight guests who donate to Locks of Love. Don’t just think about dollar signs, but consider ways you can enrich your customers’ lives.
A successful loyalty program keeps customers coming back for both rewards and a more meaningful relationship. With Bespeak, business owners maximize and grow returns at every stage of the customer journey. To learn how your business can benefit, contact us today.