Customer Loyalty Program Success Insights

The right CDP should supercharge your loyalty program, full stop. They feed off each other to enhance your understanding of the customer journey - how you acquire customers, how they become loyal, and why they churn. Here are five questions we see brands answer with this combo: 1️⃣ What percentage of my new customers come strictly via my loyalty program vs. organic in-store acquisition? Roughly we see 7-10%. This reinforces that a) loyalty alone may not be the best source for new customer acquisition, and b) the guests you do acquire via loyalty are rare and valuable - you have a chance to build a direct relationship digitally from a "cold start." 2️⃣ How many orders / visits does a customer typically have before they join the loyalty program? The CDP should bring in all your offline / in-store customer data and link that identity to the right person at the right point in time at which they opt-in to the loyalty program. This is critical to getting a clear picture of what your customer journey actually is, instead of viewing the in-store behavior as entirely separate from the digital journey / behavior. 3️⃣ What are retention and frequency for my loyalty program, and how much better is it than my typical in-store guest? Every loyalty app's dashboard shows you the difference in average check between loyalty and non-loyalty customers. That is helpful, but what you really need to measure are rates of onboarding, retention, frequency, and the speed at which customers come back across both channels. If as a marketer you want to definitively prove (to your team, execs, or franchisees) that you're moving the needle with your loyalty efforts, the CDP + loyalty combo will give you answers. 4️⃣ What's the lifetime value of a loyalty guest vs. a non-loyalty guest and how much should you spend to acquire either? Cohort analysis has been a staple of e-commerce analytics and marketing for a decade. We're seeing brands now start to leverage those same tactics to back into what their paid ad budgets should be based on the total spend / lifetime value they can expect when they acquire a customer. Folks even take this a step further to look at differences in LTV at either at the location level or between in-store and off-premise. They are fine-tuning budgets for local store paid ad campaigns, or building creative and budgets for retargeting campaigns aligned with customer preferences and their expected LTV. 5️⃣ What menu items are popular among my most frequent loyalty customers but aren't typically chosen by first-time customers? We have seen several examples of menu items popular with loyalty customers that don't even rank in the top 10 for new customers. Brands are starting to more prominently feature the menu items that drive the highest levels of engagement / loyalty both in-store and on digital channels to gain mindshare with first-time customers. There are more, but this is a good start to what a true loyalty + CDP combo looks like.

Creating a Winning Loyalty Program: Key Questions & Strategies I've always been passionate about creating loyalty programs for brands. It's a valuable way to connect with & learn from your customers while delivering concrete business results, especially as customer acquisition costs rise. Before implementing a program, my team and I spend significant time contemplating these essential questions: 1. Customer Value Proposition: Why would our customers want to join this program? How can it enhance our engagement and connection with them? 2. Business Impact: How will we measure this program's effect on customer retention, frequency, incrementality, and advocacy? What's the ROI? and what's a reasonable timeline for achieving this? 3. Management & Profitability: Who will oversee the program within the team? And ensure that we factor in all the costs, identify efficiencies, and drive profitability. 4. Best-Practices: What loyalty programs do we admire, and why? We examine our industry & other sectors. 5. Pilot Market: What market will we pilot in? Noting that programs don't work universally across the globe. It's essential to customize tiers, rewards, and consider currency, points liability, and robust fraud management as we scale. 6. Tech Stack Integration: Which loyalty program tech stack aligns with our current & future business needs & seamlessly integrates with our DTC ecosystem? 7. Data Collection: How does this program fit into our data collection initiatives? What consumer insights do we hope to gain clarity on? Next, it's important to think about how our customers earn rewards: 1. Spend: Customers can earn rewards by spending a total accumulated amount over time (drives LTV & can increase AOV) or by spending a certain amount today to receive specific rewards (to boost AOV). 2. Share: Earning rewards can also involve actions like writing a review (drives UGC & SEO), sharing personal data on their birthday (drives personalization), or referring a friend (helps with CAC). Finally, what are the customer benefits of the program: 1. Saving: Customers benefit from savings, which could be in the form of a specific dollar amount off or a percentage discount, along with GWPs etc. 2. Services: Benefits can also include free shipping, early access to new products or sales, free alterations, and more. 3. Experiences: Customers can get invited to in-person events, become part of a like-minded community, gain access to a personal stylist, or provide feedback on new products. For me, two loyalty program pillars are: transparency & commitment. When changes to the program are made, we communicate with care and provide ample notice. It's essential for our customers to feel genuinely valued by our brand. Trust can be earned but lost in a nano-second if we neglect the importance of maintaining a positive relationship with our customers. Thus, we focus on creating joy, and this helps ensure that our brand shines. #customerloyalty #valuecreation #brandlove

LOYALTY PROGRAMS THAT STAND THE TEST OF TIME I was today years old when I learned 77% of loyalty programs fail within the first two years and US shoppers [on average] are registered in 18 loyalty programs, but only active in half. Loyalty program success is not easy. So why invest in a loyalty program? Because loyal shoppers are >3x more valuable to retailers than non-loyal shoppers and are less likely to churn. A good loyalty program serves its customers by helping them save with valuable offers and benefits, while allowing the business to deliver this value in a sustainable way, personalizing the offers and investing more effectively. This article delves into characteristics of Starbucks, Sephora and Tesco's top-of-class loyalty programs. Themes include: > Ability to accrue points for reward purchases (multi-tier system is common) > Seamless shopping experiences between online and offline (mobile ease of use is key) > Use of 1st-party customer data to improve relevance and personalization > Benefits include discounts, free shipping, exclusive gifts, events, and first access to new products > "Emotional connection is what most effectively generates long-term loyalty." - Ana Luisa Ares Article Advice: 1. Leverage first-party customer data to develop a deep understanding of customer behavior and needs. 2. Develop capabilities to deliver an easy, inspiring, seamless experience that exceeds customer expectations / needs. 3. Continually evolve... adjusting to the times, challenges and changing customer expectations. My $0.02: A portion of revenue generated by data and media monetization should be used to improve loyalty programs which increase monetization revenue to be invested back into loyalty program improvements. And so on. Article URL in first comment. #loyaltyprograms #retailmedia #revenueflywheel #conveniencestores