Customer Loyalty Programs

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BY DARREN DEMATASDarren DeMatas has 10+ years of professional marketing experience working with large corporations and small businesses.

In addition to having an MBA in Internet Marketing, Darren is a Copyblogger Certified Content Marketer and Google AdWords Certified.

Reasons Why Customer Loyalty Programs Matter7

There are 3.3 BILLION loyalty program memberships in the US, an average of 29 per household. (Colloquy)

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More than 71% of those making $100,000 OR MORE a year are enrolled in a loyalty program.(Software Advice)

85% of retailers are in search of ways to add value outside of discounts. (Colloquy)

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It is 6-7 TIMES more expensive to acquire a new customer than it is to keep a current one.(White House Office of Consumer Affairs)

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75% U.S. companies with loyalty programs generate a return on investment. (Experian)

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83% of members agree that programs make them more likely to continue doing business with certain companies (Bond)

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Increasing customer retention rates by 5% increases profits by up to 95%. (Harvard Business Review)

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Big Reasons Why Customer Loyalty Programs FAIL4

97% of loyalty programs are based on spending money to earn money (transactional rewards) (Cap Gemini)

77% of transaction-based programs fail in the first two years. (Cap Gemini)

Overall, ONLY 25% of companies reward any form of engagement.(Cap Gemini)

56% of people don’t join a loyalty program because of privacy. (Bond Brand Loyalty)

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Learn How To Launch A Customer Loyalty Program

Types of Customer Loyalty Programs5THAT WORK

POINTS PROGRAMS

REWARD CUSTOMERS WITH REDEEMABLE POINTS FOR MONETARY OR NON-MONETARY ENGAGEMENT.

POINTS FOR ENGAGEMENT (NON-TRANSACTIONAL)

POINTS FOR ENGAGEMENT (NON-TRANSACTIONAL)

SPEND PROGRAMS

REWARD CUSTOMERS WITH STORE CREDIT BASED ON DOLLAR AMOUNT SPENT.

EARN POINTS FOR TRANSACTIONS ONLY

EARN POINTS FOR TRANSACTIONS ONLY

TIERED PROGRAMS

INCENTIVIZE CUSTOMERS WITH STATUS BASED REWARD LEVELS

BRONZE SILVER GOLD

FreeProducts

Birthday Gifts

Birthday Gifts

Free Shipping

Free Shipping

Free Shipping2X

Points3X

Points

ExclusiveItems

THREE TIERED PROGRAM

#VIBROUGE TWITTER SEARCH = ENGAGEMENT & EXCITEMENT

GOLD MEMBERS GET FREE SHIPPING

PAID PROGRAMS

CHARGE AN UPFRONT FEE FOR VIP BENEFITS

PUNCH PROGRAMS

CUSTOMERS MOVE TOWARDS A GOAL WHEN PURCHASING CERTAIN ITEMS

BUY 5, GET 1 FREE

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Tips For Launching A Loyalty Program11

SIMPLEstart1

start with your EXISTING EMAIL LIST 2

JOIN make it simple to3

LIKE THIS

NOT LIKE THIS

EARNINGmake

rules simple

EARN 1 POINTSPEND $100

4

100 POINTS IS WORTH $1

SPENDINGmake

rules simple5

launch in digestiblechunks 6

Don’t OverwhelmCustomers’With Options 7

Coupons

POINTS

Tiers Fees

Punch Cards

END GOALhave your8 in mind

IMPROVE CUSTOMER ACQUISITION?

DECREASE CUSTOMER CHURN?

INCREASE ORDER SIZE?

EMAIL AUTOMATION

use 9Automated Emails Get

119% HIGHER CLICK RATES Than Broadcast Emails (Epsilon)

make it about your customer10 not about money

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