Brand loyalty programs: Are they effective ?

According to the research survey,[inlinetweet prefix=”” tweeter=”” suffix=””] 62% of U.S. consumers join retail brand loyalty programs to get discounts but only 36% have received a reward or promotion from the program[/inlinetweet] that actually made them come back to the brand. One reason might be the fact that, according to the survey results, 81% of brand loyalty program members don’t understand the benefits they’re supposed to get with the program or how the program works at all.

Brand loyalty programs can provide a lot of benefits to marketers, but the more, the program is customized to each customer’s needs the better chance of success.

Loyalty is different for each customer. The key is to provide enough loyalty experiences that your best customers are appreciated. As we all know, the 80-20 rule holds true for most retail and restaurant businesses. Find those 20% and figure out what makes them loyal, get to know them. Acknowledge different customers by basing your loyalty program on services that you provide each time they visit. Give your customers something to work towards by offering a tiered program where the best customers receive more points per purchase in appreciation for their long-time support of your business.

Through a loyalty program, you have the opportunity to connect to your best customers. Today there are so many ways to communicate your appreciation. When a customer joins, give them the choice to connect in the way they want to: email, text, mail, social networks, etc. Based on the member preference, you have endless opportunities to test effectiveness of promotional communication tools.

Loyalty programs can also provide insight to your customers spending behavior. Once you know who your best customers are, you can track their purchases and offer products that they are more likely to purchase based on past behaviors.

There was a time when brands would reward their most loyal customers with gifts beyond their expectations.  As the owner of a Subaru Outback, for example, I have received a number of free gifts that are going to keep me engaged with the brand for some time.  Why not send free products, tee shirts, hats or other useful handouts to your best customers just to say “thank you”?

The key to a successful brand loyalty program is to make it easy for consumers to understand while also using the program as a way to open up the lines of communication between you and your best customers.  As more people enroll in your brand loyalty program you also need to do a better job of segmenting your audience.  A free gift to one person might be appreciated while another might now want the same “freebie”

One thing is for sure; consumers are becoming less and less brand loyal today.  A great brand loyalty program can help you keep your best customers and change the competitive playing field from price alone.