Offering loyalty members complimentary access to premium features can help brand advocacy. It’s a low-cost way to encourage product adoption and build long-term retention.
Consumers sometimes perceive dynamic pricing as unfair, so marketers should tailor marketing communications accordingly. For example, only email a notice about price changes, as this will likely get ignored.
Hyper-personalization
When appropriately executed, hyper-personalization can be an effective way to drive customer retention and boost revenue. However, it’s essential to be transparent about how you use customer data and ensure your customers understand why you need their information. Also, you’ll need the proper technology platforms to collect and analyze this data.
Modern loyalty programs often use behavioral segmentation and machine learning to offer customers a personalized experience. For example, if a user spends considerable time on a website looking at olive green shoes, the business may send them an email highlighting a similar pair of shoes in a sale.
Using a combination of marketing and data analytics, businesses can create a highly detailed profile for each customer. They can then deliver targeted messaging through the most relevant channels. For instance, a user who recently visited a website might receive an email or app notification offering them direct, unprompted customer support through co-browsing technology. This method of communication is highly effective. Research indicates that response rates are significantly higher than conventional, non-personalized messages.
Dynamic pricing
Known as dynamic pricing, this strategy allows loyalty programs to price products and services in real-time to reflect supply and demand. For example, hotels may increase room rates during high-demand periods and lower them during slow times or if a new product is not selling well. Similarly, airlines use dynamic pricing to balance capacity with customer demand and profitability.
The risk of using dynamic pricing with a loyalty program is that it can create a perception of unfairness. Customers expect consistency and fairness in pricing, so if they perceive that prices vary significantly from one moment to the next, it can lead to dissatisfaction and potential churn. To avoid this, businesses should communicate their pricing strategies and provide information on the factors influencing price fluctuations to build trust.
For instance, a restaurant can introduce dynamic pricing gradually by advertising happy hour discounts and indicating that dinner prices might change during busy hours. They can also highlight the positive feedback and testimonials from other loyalty program members who have experienced this pricing.
Mobile apps
Modern loyalty programs use mobile apps to connect with customers. These are often integrated with ecommerce platforms to make it easier for shoppers to make purchases and redeem rewards. These mobile apps make it easy for customers to share their experiences on social media.
Loyalty apps offer a variety of other benefits, such as allowing customers to access their order history and track their reward status on the go. They can also promote special offers or events to encourage customer action.
Personalization is a crucial feature of modern loyalty programs. It allows brands to deliver relevant messaging and offers based on data that customers have volunteered to share with them. It is essential in uncertain economic conditions when it can help to allay people’s fears about cutting spending and saving money. Providing value in these times of uncertainty can increase brand value and loyalty, which is why it is a top consideration for businesses.
Influencer marketing
Modern loyalty programs are often designed to encourage repeated engagement by leveraging technology as a force multiplier. Personalization, for example, helps drive value and customer satisfaction by offering perks that non-members can’t access. And influencer marketing – paired with data analytics and AI – allows for hyper-personalization, allowing brands to target audiences with personalized content that aligns with their interests and values.
From eye-catching product-related content to travel photos that create FOMO, influencers have an innate ability to inspire followers. It makes them relatable and authentic, which in turn drives loyalty. By providing influencers with free products and engaging with them in various ways, from live streaming to Q&A sessions, brands can establish strong connections with their audience.
In addition, by partnering with influencers who share your brand’s values, you can reach new audiences and grow your community. Using UTM codes to track clicks and engagement, you can see the return on your investment in an influencer campaign. In the case of loyalty programs, this can help you determine the best tiers for your program and how much to spend on rewards.
Customization
As loyalty programs evolved past traditional discounts, they also moved to experiential perks and data collection. These changes brought personalization that could not have been achieved with the old-school points and discounts model.
Using a customer’s unique identification marker (like an email address or phone number) to track behavior and purchase history, a business can build each member’s profile. These profiles then inform the creation of a customized offering of offers and products. The result is a personalized experience that makes customers feel valued.
These individualized offerings are beneficial during times of economic uncertainty when many customers reduce discretionary spending and hunker down for the long haul. A streamlined rewards program can help businesses retain loyal customers, who, according to Adobe, are five to seven times less expensive to acquire than new ones.
These perks can be delivered through a mobile app or online platform to make them as effective as possible. It makes the whole experience seamless for the customer and keeps them engaged with the brand.