The benefits of running a loyalty program
Did you know that it’s 5x times more expensive to acquire a new customer than to retain an existing one (Harvard Business Review)? Invest in a loyalty program that keeps your engaged customers around longer, saving you money in the long run.
A loyalty program is an engagement and retention strategy that allows you to reward specific customers for their loyalty to your brand. These loyal customers are frequently called “VIPs”.
You can define your VIPs any way you want, and you get to decide the benefits they receive. By rewarding these VIP customers for behaviors like repeat purchases and referrals, you can strengthen your relationships with them and keep them coming back to your brand time and time again.
Running a loyalty program will help you:
- Maintain strong customer engagement
- Increase customer lifetime value (CLV)
- Incentivize brand advocacy and referrals
See a VIP case study in action
Want to see an example in action? Hear how Peyton Fox from Spark Bridge Digital helped her customer sell out 40% of new product inventory within 24 hours; all due to the launch of a new VIP program.
Follow 5 steps to build your loyalty program
Learn how to create your VIP loyalty program with these actionable steps. Throughout this course, you’ll walk through each of these processes to create your own strategy.
Step 1: Set the foundation for your loyalty program
First, consider some foundations that will guide the rest of your strategy. You’ll need to answer questions like:
- What does success look like for my program?
- What types of rewards will I offer?
- Am I migrating over from another provider, and what do I need to do, if so?
Step 2: Determine your VIP audience
Then, it’s time for you to decide: who is a VIP for your brand?
You may choose your VIP criteria based on things like purchase history, average order value, engagement and referrals, and more. It’s important to define who your ideal VIPs are, so you know how to market to them.
Step 3: Acquire VIPs by marketing your program
Next, develop a marketing strategy that encourages people to become VIPs of your brand. Clearly explain the rewards and benefits that come with joining the program, and how they can join.
This is the phase where you hook VIPs in, and convince them of the value of your program.
Step 4: Engage your VIPs with conversion-focused content
Once a customer has reached the VIP threshold, your work is not done.
Make your VIPs feel like they’re special members of your brand community. To do this, you should:
- Clearly communicate the benefits they will receive and follow through on them.
- Personalize VIP messages to appear exclusive and unique.
- Provide them with fresh, beyond-the-basics content that keeps your brand exciting.
If you don’t continuously provide your VIPs with white glove service through your communications, you risk losing them as loyal customers.
Step 5: Evaluate your program performance and improve over time
As with all aspects of your marketing strategy, analyzing the performance of your VIP program is essential. You should frequently monitor how you stack up against your defined success metrics. Then, look for opportunities to adjust your program to make it even more impactful.