The power of loyalty programs in digital marketing

Loyalty programs are a strategy that not only benefits the company but also provides value to its audience. In fact, we will see later in the article how it can be applied in the digital marketing world and what types of programs exist. 

Shall we start? 

What loyalty programs are 

Loyalty programs, also known as “customer rewards programs”, constitute a type of marketing strategy that aims to reward the company’s loyal customers. It is actually a customer reward system depending on the purchases they make. 

Some examples: 

For instance, the company may provide discounts, gifts, premium products, etc. to its loyal customers, so-called “loyalty awards”. There are various ways for a business to leverage a customer rewards program. 

Later in the article, you will see different types of loyalty programs. So, you can get an idea of how you can also reward your loyal customers. 

Benefits of Customer Rewards Programs 

A loyalty program is, as we said, a kind of marketing strategy. Businesses, therefore, get specific benefits from the programs. 

What are they? 

• Increased customer retention: Every business wants to retain its customers. That is, customers choose its products or services for the long term. It is what is known as customer retention. Loyalty programs help a lot with this, as customers feel they get more value from their purchases.  
• They help acquire new customers: Satisfied customers are more likely to recommend the brand to others. So, think about how much better it is to recommend something someone has already tried.  
• They give an advantage over competitors: If a customer is between two brands, a strong customer rewards program can bring them to your brand’s side as it offers them more value.  
• They lead to more sales: The ultimate goal of any marketing strategy is sales. Happy and loyal customers will not only continue to choose the brand, but it is more likely to make larger purchases.   
• They can enhance the brand’s reputation: A brand that rewards its customers means it cares for them. In this day and age when businesses are criticized for many different things, showing that you offer more to your audience is extremely important. 
• Build e-mail lists easier: Speaking of digital marketing, another benefit of rewards programs is that they help you build your e-mail list. People who sign up for the loyalty program by giving their e-mail addresses can be added to the list to receive your newsletters. Therefore, it also facilitates the process of e-mail marketing. 

Loyalty programs and digital marketing 

Digital marketing can combine extremely well with customer loyalty. After all, the digital world is now part of our everyday lives. So, our consumer habits as well. 

Some simple ways to combine the power of loyalty programs with digital marketing are: 

• Create a landing page for your program: Creating a landing page, which is a page on your website exclusively for your program, has so many positives. To start with, the users can “land” on this page and easily subscribe. You can also promote your landing page on different digital channels (social, ads, etc.). 
• Leverage social media: A big part of your audience is on social media. So, why not promote your programs there? 

But the power of social media does not stop here. Your audience can share your post and attract more users. You can also collect user-generated content that will further enhance your brand or promote your program through social ads.  

• E-mail marketing is your ally: E-mail marketing is definitely one of the most powerful “weapons” of digital marketing. To start with, you can send e-mails to let your customers and audience know that you have launched your loyalty program. Then, you can use a newsletter to inform them about offers, benefits from the program, news, and generally anything relevant. 
• Consult the data and the indicators: With digital marketing, you have access to data and indicators. Especially, if you use a campaign management tool, you can check the data to get a better idea of your loyalty program’s performance. And of course, if necessary, you can make the appropriate changes. 
• Leverage the power of gamification: The gamification is one of the most fun ways to create a rewards program. It is a way to make the whole process seem like a game, making it more interesting. And therefore, a way to bring more excitement to your customers. We will see more about gamification later. 

Types of loyalty programs 

A loyalty program can take different forms. So, if you are thinking of using this strategy in your business marketing, it is helpful to know what they are.  

Let’s look at some of the most common ones: 

Customer loyalty programs with points 

Perhaps the most common type of program and the simplest to implement. It is also something that several e-shops are using.
How do they work? 

Every time a customer buys something from the business, they get a certain number of points depending on the size of their purchase. The customer can then use these points to earn a reward (e.g. a discount). 

Scalable programs 

Tiered loyalty schemes offer different benefits or discounts to specific groups of consumers. Usually, according to the size of their purchases. This type of rewards program actually divides consumers into scales and rewards them according to the scale they belong to. In simple terms, the more they buy, the more points they get and move up a scale. And the more they move up the scale, the more benefits they enjoy.  

Exclusively for VIP 

These types of programs usually require a subscription. The subscribers of the program thus enjoy various benefits. Of course, this model mostly works on the “warmest” supporters of a brand or an audience that could be interested in such a “premium” program. 

Focus on customer values 

These programs target consumer values. Rewarding the customer, therefore, satisfies their values and beliefs. For example, every time a customer spends a certain amount, the company donates a percentage to charity. 

Partner network programs 

Partner network programs are “born” when businesses cooperate with each other. Thus, the customers of one firm can also benefit from the partner. This “tactic” is not just a loyalty program, as it also enhances business growth through collaboration. 

Gamification 

Remember earlier when we mentioned the term “gamification”? What is it? 

It is actually turning your loyalty program into a game! Thus, the process not only becomes more enjoyable for customers but can also motivate them to make more purchases. One way to do this is to create an application for your loyalty program that functions as a game.

In conclusion 

Loyalty programs can combine extremely well with digital marketing and can definitely benefit a brand and its audience. So, we can say that it is a win-win situation. As the digital world evolves, people will interact even more with it while new strategies are created on the part of brands. Reward programs are certainly a strategy that hardly will get “old”, as it relies on a core principle of marketing, to offer more value to your customer.