Panel Discussion- Accelerate your growth this holiday season with a loyalty program
A loyalty program gives brands an advantage during the holiday season to retain their most loyal customers. Customers expect offers, discounts, and unique rewards. Brands can leverage loyalty programs to stand out among the competition & build long-lasting relationships with customers by understanding their needs better. In this panel discussion, industry experts from different fields come together to share their insights and experiences on loyalty.
Watch the panel discussion recording here:
How can a loyalty program help brands to retain loyal customers and why a loyalty program is important during the holiday season?
1. The holiday season is a great time to reengage with existing customers and acquire new customers.
– The holiday season is also typically associated with deep discounts, which means that you as a business are likely to attract a lot of bargain hunters. A recent study by Simplicity DX mentioned that back in 2013, merchants lost an average of $9 for every new customer they acquired. So, they’re losing about $9 for that initial purchase, today that number has gone up to $29 on average. That is a 222% rise in just nine years. Business loses money when they’re acquiring a new customer because of the cost of customer acquisition and promotions.
– In 2013 a repeat sale generated an average of $28 in profit instead of a loss of $9. Today, the number has increased to $39. So, on average, instead of losing $29 for the first purchase, if it’s a repeat purchase, you’re making $39.
– The bottom line is if you’re simply acquiring one-time buyers then you will end up losing money on these customers, it’s important to find a way to convert these customers into repeat buyers.
2. The first step is to ensure that you have a focused strategy for creating repeat and loyal customers. If you don’t have a strategy in place yet, then that’s the first thing you need to focus on.
3. First purchase typically represents only about 10% of the lifetime value of a customer. So, if the customers don’t come back, you’re losing about 90% of the revenue you could get from that customer.
4. It’s not just about new customers and converting them into repeat customers. It’s also about making sure that your existing customers also feel special. They should feel appreciated for being loyal to your brand.
5. What kind of benefits will resonate with your customers; it doesn’t always have to be discounting. It’s about making them feel special and giving them a reason to come back. This allows brands to move away from being perceived as discount brands and instead, focus on customer loyalty. Brands don’t have to attract bargain hunters if they already have a loyalty program in place.
6. With the holiday season around the corner, charitable donations can also be an interesting option. Allowing users to donate the points that they have earned to a charity instead of using them for themselves can create that emotional connection.
7. Different customers will be motivated by different types of strategies, a singular strategy will not work for all your customers. If brands can analyze the data and segment customers into different buckets, then promotions and communication can be personalized which will yield better results.
What were the challenges you faced before opting for a loyalty program?
1. We implemented the Zinrelo loyalty program in 2019 and immediately saw an increase in repeat purchase revenue, the segment of our customers whom we saw the most upward lift were customers in the highest tiers. Customers were hungry for that change.
2. We have got great feedback, since 2019 we have seen a big lift both in customer retention and in repeat purchase revenue. We’ve seen a 75% lift in customer retention over that period and a 65% in repeat purchase revenue.
3. If you combine a loyalty program with a referral program, then that is the best way to acquire new customers through word of mouth.
4. When the customers know that there is a loyalty program, the conversion rates go up as well. In a way, that helps in acquiring more customers because when they visit your site and see a rewards program, they are more likely to buy from you instead of some other brand that does not have a loyalty program.
5. If you are thinking that you don’t have enough time to launch a program right now, even if you launch it immediately after the shopping season, you can still go back and reach out to the customers and retroactively enroll them in your loyalty program and still benefit from that.
How has loyalty helped UPS clients?
1. UPS has a set of work streams that we use to improve customer experience in every way, whether that’s improving how we connect with our customers or improving our digital experience, our hands-on delivery experience, we translate that into investing in our customers.
2. Brands don’t have to give customers free items, but just think creatively of what you can give, something that they need, that will encourage that repeat buying.
3. What is a loyalty program in its simplest form? Loyalty doesn’t define itself as saying I have to give a discount or I have to give away something for free. It’s saying I want to be rewarded for doing business with you.
4. Brands should know their customer base and what’s important to them and then be creative in how you reward them for doing business with you, but the one thing that you cannot afford to do is not have a loyalty program.
5. Brands only want to retain customers, but you want to encourage them to repeat often. Think about how often you want a customer to buy from you because this is what will drive your strategy.
Q – Jai: How long does it typically take to deploy a loyalty program?
The answer varies, but on average, you can have a program up and running in about four weeks if you have everything lined up at your end.
Q – Jodi: At what stage should a business consider implementing a loyalty program? Should it be early on or only when one has an established base of customers?
if we could go back and do it again, I think we would have implemented it sooner, and frankly, I think whatever stage you’re at is the right time to implement a loyalty program. For us, our focus is really on customer happiness and a loyalty program speaks a lot to that and it makes sense as part of our overall strategy.
Our customers love the flexibility of using their points at their pace, they can save their points, and maximize having a lot of points with these big holiday moments too. By giving your customers the flexibility to use those tools, the results are far better.
Brands can implement a loyalty program at any stage and adjust it, that’s what being in business is all about, trying something and pivoting and knowing how to pivot.