Customer loyalty has become a priority for all businesses, and rightly so. Repeat customers are likely to spend 67% more than new ones, and it’s significantly less expensive to sell to a repeat customer than a new one. Moreover, with the pandemic in hindsight, every business is aiming at customer trust and loyalty.
However, achieving customer loyalty is no easy feat, and businesses need to work harder than ever to retain customers. Loyalty programs have proven to be an effective method to engage and retain customers.
Here is a comprehensive guide to how B2B and B2C businesses can enhance the effectiveness of their loyalty programs using email.
How Can Loyalty Programs Improve Customer Loyalty?
90% of companies have some sort of loyalty program. The question, however, is, do they really offer a positive return on investment? The average customer is a part of 14.8 loyalty programs and actively engages with 6.7 of them. More than 90% of consumers say rewards are important to their buying decisions. 71% of customers consider loyalty programs an important part of brand relationships.
Clearly, loyalty programs directly influence customer engagement and loyalty. When customers get rewarded, they feel recognized. This encourages them to make purchases again, resulting in customer loyalty.
Using the right channels to distribute your loyalty program content to your customers is essential to reaping the rewards. Even though a multichannel approach is optimistic, using high-engagement channels like emails that can be customized and personalized must be leveraged to improve conversion rates.
How to Create Loyalty Program Email Campaigns That Are Beneficial to Both the Customer and the Company
Customer loyalty programs can help you build and nurture customer loyalty. Here’s a step-by-step process to creating a loyalty program that adds value to your customers while benefiting your company.
Choose an Incentive, offer different types of valuable rewards
The first step in developing any loyalty program is to decide the reward that you’ll give to your customers. Users should have a compelling benefit for signing up, and the rewards must allow them to purchase products with an added advantage.
Discounts may seem the safest option when it comes to rewarding loyalty program users. But that isn’t the only way. Allow users to use the points outside of your business. For example, you can let them use reward points to book movie tickets, buy other companies’ products, or donate to charity.
Make them Easy to Redeem
Ensure that the loyalty rewards are absolutely effortless to redeem. Your customers have done the hard work by taking the actions you wanted them to take. Your online email campaigns must reflect the customer’s decisions in your database and the promised customer experience must be made available instantaneously. Offline touchpoints must eventually be integrated online to reduce wait times.
For instance, physical reward coupons are now obsolete as most customers use mobile devices to access loyalty programs. Thus, businesses are investing in QR-code-based loyalty programs to engage mobile users.
To use QR codes for loyalty programs, use a QR code generator to create a QR code and link it to the rewards page where users can redeem their rewards. Users will be able to scan the QR code to check the reward points they have and redeem them.
Your outreach mode also plays a role in the effectiveness of your loyalty program. For promoting your program via email, write compelling copy, showcase the benefits upfront, and engage with the customers with long-term brand loyalty in mind.
Go Beyond the Incentive to Create a Deeper Meaning
As mentioned, loyalty programs have a bad reputation, and many customers think they’re only a clever play to make them spend more time and money. Even if that is your end goal, make your loyalty program something more than money and monetary rewards. Prioritize values and find the “why” behind them to get people more engaged and excited.
A good example is the loyalty program by Ben & Jerry’s. They create social-themed ice-cream flavors and donate the sales to various charities.
Creating Effective Loyalty Program Emails
Email marketing is a tried-and-tested method to communicate with your customers. Email also plays a vital role in nurturing customer loyalty and retention. In fact, about 80% of companies rely on email for client retention.
This makes email an excellent channel for driving engagement to your customer loyalty programs. Here’s an effective blueprint to using emails to make your loyalty program successful and achieve higher engagement.
Occasional Invitation-to-Join Emails
Do your customers – both new and existing – know that you have a loyalty program? More than 50% of American customers will join the loyalty program of a brand they frequently shop from. Customers appreciate brands that have loyalty programs. So, as soon as a customer comes on board, send them an email informing them about your loyalty program and the benefits it offers.
Also, the chances are that a new customer may not want to join your loyalty program, but they may get interested after buying a few times. So, keep sending occasional emails reminding your customers about your loyalty program.
Welcome Emails to New Joiners
Just like you send a welcome email when a website visitor joins your email list, send a welcome email when a customer joins your loyalty program. The email should contain a heartfelt message stating that you are serious about maintaining a long-term, fruitful relationship with them.
Additionally, you can include details like:
- Their point/reward balance
- Loyalty program benefits they’ll receive
- Tiered benefits (if you have a tiered system)
- How to redeem the points
This welcome email by Starbucks for their Rewards program is a great example of a crisp welcome email.
Purchase Emails to Loyalty Buyers
It’s a common practice among brands to send an email to customers after a purchase. The email often contains a “Thanks for shopping” message along with a receipt. This works fine for regular customers. But when a loyalty member makes a purchase and earns points, send them a dedicated email telling them that they have earned new points.
Here’s an example from Elf Cosmetics. When a loyalty member buys a product and earns points, Elf sends them an email stating the new points they have earned and their total balance.
Rewards Reminder Emails
The average rewards redemption rate is only 13.67%. This means if a company issues 100 reward points, more than 85 points go unused. And a customer loyalty program is pointless if members are not using their rewards.
Most users don’t redeem their rewards because they simply forget about them. To avoid this, you can send them occasional reminder emails. You can use the number of unused reward points as the email trigger. For example, you can send a reminder email when a loyalty member collects more than 500 points.
Rewards Redemption Emails
Next, you should send an email when a loyalty member redeems their reward points. It can be a confirmation email telling the customer that they have successfully redeemed their points. Additionally, the email can include:
- Information about redeemed points
- Remaining points balance
- Points needed to reach the next tier (if you have a tiered system)
- Available redemption offers
If you want to truly personalize your loyalty program emails, start sending birthday emails. Who doesn’t like birthday wishes? And they’re even better if they come with a small gift. Send loyalty members an email that includes a genuine birthday wish, along with a gift, such as a coupon code or extra reward points.
In case you’re worried about the ROI, birthday emails have a 481% higher transaction rate, 342% higher revenue per email, and 179% higher unique click rate than promotional emails.
Similarly, you can also send festive emails on New Year, Christmas, Easter, etc.
Here’s how Beauty Insider engages with customers with custom rewards and offers, such as a free gift or additional loyalty points on their birthdays, in emails such as the one below.
Loyalty Tier Change Emails
If you have a tiered loyalty program, send an email to your loyalty members when they reach a new level. This includes tier upgrades as well as downgrades. When members reach a higher level, send an email congratulating them and highlighting the benefits of the new tier. When members get demoted, the email should highlight the benefits they’ll be missing out on and how they can reach the higher level again.
Monthly summary emails include the changes and updates that occurred in the previous month. These include the new loyalty points earned, loyalty points used, and points balance at the end of the month. Also, highlight any tier changes or other significant events, if any.
Program Update Emails
Lastly, send an email to all your loyalty program members when you make changes to your loyalty program. For example, suppose you add a new tier to the loyalty program or include more ways to earn or redeem points. Be sure that any changes are communicated to not only the members but also to customers who aren’t a part of your loyalty program.
Improving Loyalty Program Email Performance
Sending emails to increase loyalty program engagement is a great idea, but numerous businesses are already using it. What can you do to stand out? Here are four best practices to enhance your loyalty program email performance.
- Display Tier Information and Point Balance in All Emails
Every email you send to your loyalty members should include their remaining point balance and tier information. This ensures that customers are always aware of their loyalty member status and the benefits they are enjoying.
- Send Referral Codes to Loyal Customers
You can show appreciation to your repeat customers by sending a custom referral code to them. This will encourage them to refer your brand to others and bring you new customers. And since word of mouth drives 20-50% of purchase decisions, offering referral benefits to your loyal members can go a long way in boosting your loyalty program engagement.
- Remind Customers when they Reach a Reward
We’ve discussed that you should send a reminder email when loyalty members have a certain amount of unused loyalty points. Additionally, you can send your members an email when they reach a reward.
For example, suppose a member has accumulated enough points to buy one of your popular products, but they’re unaware of it. Send an email reminding them what they’re missing out on.
- Send Value-Packed Emails
There are many ways to cultivate customer loyalty, and getting customers to join your loyalty program is just the first step. You can take things further by sending them value-packed emails. Some effective strategies brands can use are:
- Invite them to exclusive early access sales
- Send them bonus loyalty points or free products
- Send them exclusive discounts
Email has always been an effective channel for communication and it works great for loyalty program engagement. Businesses can leverage email to communicate the benefits of loyalty programs and keep them updated. By developing customer-centric loyalty programs and supercharging them with emails, you can drive consistent customer engagement and loyalty.