Loyalty programs are an effective tool to strengthen customer retention. This means a strong customer relationship and high customer satisfaction. Therefore, a well-established loyalty program that regularly activates and incentivizes customers can be a key competitive advantage today. In this article, we give an insight into the use of bonus programs in Germany, explain the advantages and show some campaign ideas.
Relevance of loyalty programs
The basic idea of a loyalty program or bonus program is to reward the customer for his purchases and thus his loyalty to the company or to the brand. The customer receives e.g. for each purchase, a counter value in the form of points or something similar to the purchase value. The customer can redeem these points for bonuses, vouchers, products or even payouts. As many as 92% of customers in Germany and Austria currently use loyalty clubs, according to the “Loyalty Report 2022” study by hello again GmbH. Most importantly, the programs offer real benefits for both sides – customers and businesses.
From a business perspective, of course, customer retention is very important, because loyal customers promise regular sales. It is also much more expensive to attract new customers than to take action to keep or regularly activate existing customers. For example, cross selling and upselling reduce customer care costs. To thank the customer and to reward him can be an occasion for creative implementation to trigger classic word of mouth.
The customer benefits most through discounts. According to a study by Accenture, between two comparable companies, more than 60% of consumers choose the company that offers a loyalty programme. Customers will only use a program if it really stands out.
Automatic reactivation based on the score
Continuous contact with the customer helps to bind the customer to the loyalty program, generate new data and initiate actions. To inform him regularly about his current score within the bonus program is one way to contact him. One of the most famous German loyalty programs is PAYBACK, 71% of Germans regularly show their PAYBACK card to earn points (Shoop.de). artegic’s ELAINE Real Time Marketing Automation technology helps PAYBACK to get automatically in touch with this 71% via email in a variety of formats. The (partial) automation of content processing also reduced the time required to create mailings by 25%.
It is a good idea not only to display the points, but also to list products or bonuses that fit the score. This gives the customer a material value and shows him that his actions pay off. An automated mailing campaign that informs you how many points are still needed up to a new status or product is a strong incentive.
88.5% (Splendid Research) of Germans have their collected bonus points, vouchers or coupons redeemed for a premium or a discount. That among other things, shows, that reminders e.g. via email certainly lead to more commitment and the points do not just lay on the accounts.
Campaign ideas for loyalty programs
One of the key success factors for a loyalty program, as is often the case, is “less is more”. Keeping the program as simple as possible so that the customer can understand it directly and recognize its benefits is essential. For example, there should be easy-to-understand relationships between the sales and the points received for them. In addition, an easy-to-use benefit overview can be useful, so any customer can easily see where he stands and what he can achieve. Even loyalty programs with costs can work well if properly thought out (see Amazon Prime).
Here are some ideas that give a clever splash into the campaign:
- Simple but effective: Use more visualization to display the score. Also, product suggestions or recently purchased products that are pictured will make the mailing more exciting and personal.
- Keeping customers up to date: not only about his score is or how close he is to a new status, but also if he is about to lose an expiring status soon. It is equally important to rejoice with him and celebrate him when he reaches a new status or has received extra points, maybe even with a small extra bonus.
- Friends can also be happy: If you reach something, you share it with your closest people so customers may share a joyous event like a new status if there is a SWYN Button, possibly even with contacts in social networks. This not only leads to more awareness but can also bring new customers. Tip: Also, link the sharing via SWYN to incentives.
- The classic: Well-known but still just as important – offering an incentive if the customer has not bought anything for a long time to win him back. This can happen for example in the form of coupons.
- For a high level of customer engagement: Interactive elements (such as games to achieve percentages, points or a new status) are fun and lead to more engagement. A classic example of this is the wheel of fortune. Before evaluating the win, incorporate a small question about preferences to drive personalization.
- The premier league of individualization: Storytelling in the mail, based on the individual relationship history between company and customer, shows the customer that he is important. For example, display all of his best-rated products from the past year. Doing so really puts the customer at the center and does not tell too much about the company.
For 55% of the members, the loyalty club is used at least once a week (hello again). Therefore, it is the best time to make even better use of the potential of loyalty programs through simple automation and creative campaign ideas.
Learn more about marketing automation and about typical mistakes that marketers (unfortunately) often make when using marketing automation or email marketing in general. Get our checklist: 10 marketing automation mistakes you should avoid.
To download the checklist, just fill in the form.