Loyalty programmes are great for businesses looking to improve their retention strategy and build loyalty from within the existing customer database. There’s also a chance to acquire new business.

But with a variety of approaches and options out there, it can be tough finding the right path to go down when it comes to choosing the right loyalty programme model for your business.

Our latest blog answers some of the major questions we hear about loyalty programmes, and offers some ways your brand can embrace their potential.

Why do people like loyalty programmes?

Of the reasons given for subscribing to a loyalty programme, discounts and offers stand out as a big draw according to YouGov. Programmes that offer rewards, free products or services, and prize draws were also highlighted as key reasons.

One peculiarity of the loyalty programme world is that often subscribers want a reward from a partner brand, rather than the brand they sign up with.

So for example, businesses like banks, supermarkets or petrol stations are seeing greater success from loyalty programmes once they partner with another brand to deliver a more appealing set of benefits to the end customer.

It’s worth noting though that loyalty programme subscribers are also more likely to spend with that brand and recommend that brand to friends and family according to YouGov.

Who do loyalty programmes appeal to?

According to YouGov:

-         77% of UK adults are subscribed to at least one loyalty programmes
-         72% think loyalty programmes are a great way for businesses and brands to reward loyal customers
-         59% of UK adults think all brands should offer a loyalty programme

Other findings from YouGov include that loyalty programmes appeal more to older people. For example, 83% of people over the age of 55 are part of a loyalty programme, compared to 61% of 18-24 year olds.

What sectors are loyalty programmes working in?

Supermarkets are seeing big traction in the loyalty programme space, with YouGov’s research finding that 65% of people who are subscribed to a loyalty programme have done so with a supermarket.

Retail is another strong area, with loyalty programmes in this sector proving particularly effective at appealing to younger customers. This is likely due to digital disruptors such as Amazon Prime, as well as subscription models.

What types of loyalty programme are there?

There are a few options available. An obvious starting point is a basic rewards programme – i.e. spend X amount and get Y as a reward.

There are also brands that look to run ‘refer a friend’ programmes, where customers are rewarded for bringing more potential business the way of the brand.

VIP programmes are another strong selection. These are often set up in a tiered structure, whereby brands offer customers the chance to build towards new levels of rewards and move into new tiers based on their loyalty levels. This is a great way of building community and needn’t necessarily focus exclusively on discounts. The VIP model can easily centre around early access to new products, or free shipping for example.

What loyalty programme model is right for me?

Naturally every business is different, but we’ve seen brands in verticals such as fashion and health and beauty really benefit from loyalty programmes.

For each brand considering implementing a loyalty programme, a few key questions should be answered to determine the best type of loyalty programme to choose:

1.   Do you need more support on acquisition or retention, or a mix of both?
2.   Can you afford to reward customers with a variety of perks, including creating a more complex structure of discounts and providing added value?
3.   How big is your current customer database?
4.   Are you a business that relies heavily on repeat purchases (or is this something you want to drive more of)?

Answering these questions will help you choose the right type of loyalty programme – whether that centres around rewards, VIP tiers or refer a friend.

The next step is defining the mechanics behind the programme to ensure that they make sense commercially. That means finding the best platform to implement the programme via.

The final, and most important step for ensuring the success of your loyalty programme once it’s live, is to promote, promote, promote.

You need to ensure that your audience is aware of the new rewards they can benefit from by sharing the news via different marketing channels, such as social media or email.

It's also a good idea to have an engaging, dedicated landing page on your website. This provides a space where customers can sign up and you can explain the way in which the programme works and why they should join it in the first place.

How can you implement a loyalty programme for your brand?

There’s a host of excellent loyalty platforms out there, many of which are directly linked to leading ecommerce platforms and can be pretty easy to implement if your site runs on one of these.

For example, Magento have their own version of rewards and refer a friend schemes, while there is also the Amasty and Mirasvit loyalty programme modules available.

Shopify also works with the Smile rewards and loyalty tool, while for WordPress you can consider Gratisfaction if your store runs on WooCommerce.

However, we’re big fans of what Swell brings to the table. They’re a great choice for VIP programmes, as well as more basic options for loyalty programmes.

Swell customers include skincare and beauty retailer SoKo Glam, who run a VIP programme that has brought about 20% higher engagement from those involved. Essential oil retailer Edens Garden has seen 72% increase in total revenue from repeat customers so far this year, while Kopari Beauty ran the Kopari Clique VIP programme and saw a 20.8 increase in return on investment in 2018.

Williams Commerce is a partner with Yotpo, the company that acquired Swell in August 2018. That means we’re in a great position to help you embrace the world of loyalty programmes and engage with your existing customers on a whole new level.

Get in touch if you want to discuss how loyalty programmes can benefit your business.