What are loyalty programs?
A loyalty program is a marketing strategy focused on encouraging customers to continue their shopping experience or interact with a brand in another way. Through gamification of the purchase process, and thereby offering rewards, you provide an exciting atmosphere for customers to enjoy your brand and share it with others. Let’s dive into the different strategies you can use to boost loyalty and cultivate new customers through existing ones.
Punch-card Style Engagement to Increase Frequency and Product Variety Exposure
Create a punch-card style program through email, SMS or even social media that tracks what users purchase to nudge them into completing a collection, style/type or theme of products. When the user completes each goal they make progress toward their reward. Below is an example of a section of an email that details the progress a user has made toward their goal completion.
Bundled Deals to Increase Purchase Volume
Encourage bundle deals with a tiered system to showcase the savings when you buy more of a certain product or a collection. When customers purchase two of a product they earn a discount toward their purchase. If they purchase three of a product then they receive an even better discount. So and so forth as illustrated below that was pulled from an email status update.
Competitive Strategies
Brands can gamify the customer experience through competition, which may include a ranking challenge or achievement/badge system. These structures can be based on points similar to apps such as DuoLingo et al. The system can be as simple as tiers based on a customer’s number or value of purchases. When they reach a new level, they receive an email displaying a different trophy along with a promo code. These systems can be expanded almost infinitely, but it’s a tradeoff between the effort invested versus the return on that investment.
In-brand Currency or Points
An extension of gamification for purchases is to equate purchases to in-brand points that can be cashed in for discounts. This strategy is used by brands from Starbucks to Ace. As an example, for every dollar spent or referral shared/subscribed, a customer gets a set amount of points. Those points can be cashed in for exclusive gear, an influencer meet-greet, exclusive event, or a purchase cost reduction (e.g. each point could equate to a 3% reduction in product price up to 21%).
Summary
Loyalty marketing is a critical, but often underutilized marketing strategy. When it is implemented, much of the focus is on integrated apps with an ecommerce platform, but email and SMS marketing are just as viable if executed correctly. These strategies provide much-needed marketing creativity and interactivity with current and prospective customers. We encourage our brands to explore these programs and develop strategies that will provide a return on investment for years to come.
Foghorn Labs is here to help you along the way. Reach out to us if you are interested in having us become a part of your email and SMS marketing strategy.