Loyalty programs are nothing new, as early as the 19th century, merchants used them to retain their customers. But today, digital loyalty programs offer greater opportunities: social networks, smartphone apps, but also smart labels can help companies to expand and improve the customer experience.
But why are customer experience and customer loyalty so important? Well, because it is 5-25 times more expensive to acquire a new customer than it is to retain an existing one.
So, let's explore how digital loyalty programs work and what are the benefits!
What is a digital customer loyalty program?
A digital customer loyalty program is a system that encourages customers to continue buying a company’s products or services, by providing rewards.
These rewards can be in the form of discounts, freebies, exclusive offers, and much more.
The ultimate goal of a loyalty program is to create long-term relationships with customers and turn them into brand advocates.
How to set up a customer loyalty program
There are many different ways to set up a customer loyalty program. Everything depends on the specific needs of your business. However, some common features of digital customer loyalty programs are:
- Points systems: Customers earn points for every purchase they make. These points can then be redeemed for rewards such as discounts, freebies, or exclusive offers
- Tier systems: Customers are placed into different tiers based on their spending habits. The higher the tier, the more benefits and rewards the customer receives
- Social media integration: Customers can share their rewards and achievements with their friends and followers on social media. This helps to create a sense of community and loyalty among customers
- Gamification: Customers can earn points or badges by completing certain tasks or challenges. This helps to keep customers engaged with the program
Companies can rely on mobile apps, or simply take advantage of push notifications to interact regularly with the consumer. Moreover, they can use the products themselves as access points to loyalty programs: through smart labels, customers can register for the program and access special contents. These connected products give the opportunity to reach all customers, regardless of the sales channel, and add them to the company’s CRM, thus, making easier to manage the relationship with them.