How can your business build more demand and grow loyal buyers faster?
One answer is loyalty programs. Now the next generation of loyalty programs delivers so much more.
The problem: for a loyalty program buyer is complexity, gaining more control over the value of points, and the risk of the points being devalued and expiring.
Today there is a power imbalance occurring. In the past, the business had more control – today, the buyer has all the control.
Businesses are now offsetting rising CAC by increasing the value of their customer base through loyalty programs.
How to lift demand generation from loyalty programs –create personalised experiences for your ideal buyers that encourage habitual purchasing, driving lifts in revenue and profitability.
Start with more Personalisation.
Starbucks offers personalised promotions and products, lifting its revenue and profits.
Loyalty Marketing
Next-generation loyalty programs focus on building loyal buyers as a business demand generation strategy. Buyers no longer need to demonstrate their loyalty for months or years before being rewarded.
Today’s best-performing loyalty programs deliver higher buyer connection, collaboration and customer-led control.
In 2023, loyalty programs’ lifetime value (LTV) is 6.3x higher than those buyers who are not part of a loyalty program.
70% of businesses’ loyalty program owners plan a major revamp of their loyalty programs in 2023. These are typically some of the changes planned.
Buyers that pay to be part of a loyalty program buy more.
Subscription-Based Loyalty Programs Members are 60% more likely to spend more on the brand after subscribing, while free loyalty programs only increase that likelihood by 30%.
Loyalty programs that focus on more engagement, exclusivity, and community-led experiences with their buyers build a deeper emotional connection with them.
A sports store is an example of how to achieve this,
- Free pro lessons, event tickets, exclusive in-store meet and greats with elite performers are examples of building more engagement.
- Why do this? Buyers spend up to 2x or more, have a 306% higher lifetime value, and stay with a brand for an average of 5.1 years. 3.4 years.
High-performing loyalty programs have the following.
- Deliver flawless, friction-free, omnichannel execution (online and in-store) across social media, website – everywhere.
- Mobile-first – access and manage their loyalty accounts on their devices anytime, anywhere.
- Immediate rewards – buyers need more patience for distant promises or complex calculations.
- Simplicity first – buyers want clarity, relevance, transparency, and consistency.
Buyers want to know and be involved in your business’s purpose and how it helps solve one of the world’s problems -Socially Responsible Loyalty Programs.
- 68% of Gen Z and millennials see their purchases as a reflection of who they are and what they care about. If your business doesn’t care – they won’t care about your business.
- Buyers are more socially aware – it is not generational – it is every generation. Seth Godin’s blog – brands need to design for Generation C, where C is for Covid, C is for Carbon, and C is for Climate.
- Buyers want to know your business is ethical at all touch points, including sourcing, manufacturing, fair trade practices, transparent policies around data privacy, and clarity around their environmental, social and governance (ESG) policy.
Purpose and social programs – 68% of loyalty marketers predict loyalty programs will support the company’s ESG causes in 2023.
Loyalty Program Providers Companies that may help your business include,
- Hang, turning your buyers into a loyal community,
- DoinGud building social impact,
- Nameless creates a web3 environment to build loyalty programs,
Innovation
Bilt Rewards is the first loyalty program to reward people for paying their rent on time. Launched in June 2021, Bilt Rewards – is valued at $1.5 billion.
The hook – what if paying your rent on time could pay for your next holiday?
Top Tip – be the first in Australia.
Regards
David
