6 Steps to a More Successful Loyalty Program
In our most recent original research report, Total Retail, in conjunction with Clarus Commerce, recently assessed the loyalty programs of 50 leading retailers. This was done to identify loyalty best practices that can be implemented across organizations within the retail industry. Subsequently, the 2021 Loyalty Program Benchmark Report was produced, and it features the data and insights derived from that assessment.
The retailers’ loyalty programs were assessed on the following six categories: discoverability, benefits, sign-up process, promotions and marketing, customer service, and innovation. In total, the retailers’ programs were evaluated on 34 individual criteria.
Given the hypercompetitive nature of the retail industry, particularly online, It’s incumbent upon retailers to create the types of loyalty programs that consumers value being a part of. Increasingly that means offering a combination of traditional (free) and premium (paid) loyalty programs that offer members personalized, instant benefits, including a mix of discounts and experiences.
Our assessment data bears that sentiment out. The retailers offering both premium and traditional loyalty programs (six of the 50 evaluated) are doing a better job of optimizing overall performance, earning, on average, more points in our assessment than the retailers with just a traditional program. However, just having the program(s) available to consumers isn’t enough.
To truly capitalize on the full potential of a retail loyalty program, both in terms of short-term sales gains, customer lifetime value growth, and the capture of valuable customer data, brands must take several steps, including but not limited to:
- making their program(s) easily discoverable in all channels (website, mobile website, app, social media, paid search, etc.);
- offering program benefits that are valued by your customers;
- creating a convenient, easy and secure sign-up process for new members;
- leveraging budget and resources to market your loyalty program across a wide range of customer touchpoints, including via social media and search;
- assigning dedicated customer service options specifically for loyalty program members, who are your most loyal and best customers; and
- embracing a culture of innovation to continually be serving the evolving wants and needs of your loyalty member community.
The retailers that are doing this well are creating long-term customer relationships that are mutually beneficial to each party. The customer gets benefits and services they value, while the retailer enjoys revenue gains and boosted customer lifetime values. A true win-win.
Download the 2021 Loyalty Program Benchmark Report: An Assessment of 50 Leading Retailers' Loyalty Programs Leads to Insights and Learnings for the Industry today to learn more about the loyalty programs of some of the industry's top companies. In addition to insights and analysis on the six criteria categories identified above, the report features a breakdown of the 50 retailers' programs by product vertical.
Related story: 2021 Loyalty Program Benchmark Report