&Open Sep 14, 2020
Rewarding your most loyal customers for continued brand devotion is the best way to ensure consistent revenue. But business for too long has been reliant upon the idea that rewarding those who are within a loyalty programme--simply because they are within the loyalty programme--is the key to success.
This isn’t the case.
This equation doesn’t factor in loyalty programme fatigue, and the overwhelming number of millennials who simply won’t sign up to a tiered programme if in fact the rewards are hard work and little return. When you tease this out it means there’s a possibility a brand’s most loyal customers lie outside their loyalty programme. Research does show however that once that core loyal group is identified, rewarding them--even a small percentage of them--will mean a bigger payoff in the long run.
80% of your company’s future revenue will come from just 20% of your existing customers.
Rewarding the right customers
Loyal customers buy more frequently and spend more per transaction. They’re already bought into the brand, they believe in the brand and are willing to invest in the brand. That said, they expect something in return for their loyalty (and rightly so), with 73% of shoppers of the opinion that a loyalty program should demonstrate how loyal a brand is to them.
Today, your accumulative customer data is of considerable worth. When investing in a gifting strategy, using your customer data to create the best target gift recipients yields the best results. Who has responded to rewards in the past? Did they move the needle? Using this data creates the basis for identifying this target gifting group and paves the way for a really effective gifting campaign.
With traditional loyalty programmes, it can be hard to track its success as everyone can join. People who would spend anyway are likely to join, alongside people who know how to play the “points system”. Consequently, measuring the spend of members versus non-members tells you nothing. With gifting you can use treatment and control groups, test what really works and only reward those that should be rewarded.
Loyal customers aren’t just big spenders; they’re vocal brand advocates and when chosen for a reward, react accordingly. They’ve proven their worth on your bottom line so all that’s left is for you to show them you’re aware of their value. Investing in them ensures they will return the investment, over and over again - and will tell their friends also.