When was the last time you made an effort to reward your best customers? Even though loyal customers are at the heart of loyalty programs, they’re not always top of mind when designing a rewards program.
While that might sound ridiculous, it’s easy to understand how this happens. Let’s say you just started your loyalty program. Chances are, your first priority is going to be getting as many customers as possible to enroll, but high enrolment does not guarantee your customers are participating.
Too often, merchants approach loyalty programs with a “set it and forget it” mentality, assuming that their best customers will continue to shop with them simply because they’re enrolled in the program. That may be true for some shoppers but most would like to be recognized for their continued loyalty, and for good reason!
The power of loyal customers
There’s a reason your loyal customers are also considered your best customers. Once a customer decides to make repeat purchases in your store, they’re put on the fast-track to becoming a brand ambassador. As an ambassador, your customer is more likely to promote your brand to their family and friends through word of mouth and social media channels, all while continuing to make purchases with your store.
Over the course of a year, these repeat purchases account for a whopping 41% of your revenue. It takes a lot of work to keep the momentum going, however. Think of your loyal customers as the fire in a steam engine: it’ll keep the train moving forward, but without coal to fuel it, it won’t be able to keep going for long.Repeat purchases account for a whopping 41% of your revenue. @sweettooth Click To Tweet
Your ambassadors need to know that their commitment to your brand is noticed and appreciated, and working to reward your best customers will keep feeding that purchase fire.
The best way to reward your best customers
When it comes to answering this question, there’s a long answer and a short answer.
Short answer: reward your best customers with the best rewards.
Long answer: recognize your most loyal customers with a tiered rewards program.
Step 1: Segment your customers
Tiers are the best and most effective way to differentiate between your most and least profitable customers because they allow you to sort your shoppers into groups based on virtually any customer milestone. For example, you could sort your customers based on how often they make a purchase in your store, how much they’ve spent, or the number of friends they’ve referred.
The sky’s the limit on how you’d like to differentiate your customers, however a good metric to measure against is the number of loyalty points earned. By choosing to group your customers this way, it’ll be easier to make sure you’re rewarding those customers who truly bring the most value to your business.
Step 2: Establish rewards
Now that you’ve separated your most valuable customers, it’s time to determine what to reward them with. Most loyalty programs reward customers with fixed discounts or free shipping, meaning you need to diversify the ways in which you reward your best customers.
An effective way to do this is with experiential rewards with apps like Sweet Tooth. These rewards differ from transactional rewards because instead of discounts, they provide customers with the opportunity to participate in an event that engages them with your brand outside of a standard transaction. An amazing experience enables customers to create memories that last far beyond getting free shipping.Amazing experiences create memories that last far beyond 'free shipping.' @sweettooth Click To Tweet
Product launches, tutorials, behind-the-scenes tours, and VIP parties are only a couple of suggestions of how you can enhance your customer experience for your best shoppers. Through each of these experiences, you’ll not only be creating associations between positive emotions and your brand, but also presenting a customer experience that appears flexible, relevant, and high-value to your customers’ lifestyles.
Step 3: Communicate value
This is potentially the most important step of the process. In order to truly reward your best customers, you need to make sure this additional value is communicated effectively. A large part of this is the promotion of the your loyalty program. Using elements like an explainer page allow you to efficiently inform new and returning customers of the benefits of your loyalty program, and will definitely entice many customers to participate.
Equally as important is the way you present these exclusive rewards. Many customers participate in loyalty programs in the hopes of achieving the highest level possible because the associated status is valuable. Brands like Starbucks and Sephora have mastered this concept, using special member cards and marketing campaigns to create a sense of belonging and luxury within their programs.
Through promotion and presentation, you’re able to elevate the status of the highest level of your rewards program, creating a desire to participate in other customers. This public declaration of luxury and exclusivity heightens your best customers’ sense of importance, and clearly indicates how much you appreciate their continued business with your brand. These considerations will prompt them to continue promoting your brand among their peers, bringing you more business and continued growth.
Customer loyalty is a marathon, not a sprint
Even though it’s often easier to go for the short-term win, customer loyalty must be pursued over a longer period of time. Rewards like free shipping and discount coupons are effective at engaging customers initially, but are not sustainable in the long run as they don’t recognize the impact your best customers are having on your business.
Designing a loyalty program that allows you to recognize and reward your best customers gives you the opportunity to continue growing brand ambassadors who are passionate about what your customer experience delivers with every interaction. With elevated status rewards, clearly-defined groups, and public acknowledgement of their commitment, you can reward your best customers in ways that will enrich their experience with your brand and keep them coming back for more.