Loyalty Campaigns: What Are They and How Do They Work?

Within marketing, customer loyalty is one of the most important tools for a company. Retaining existing customers is often more (cost-)effective than attracting new ones. Loyalty campaigns are a powerful tool to strengthen relationships with customers, reward them for their loyalty, and thus increase customer retention. In this blog, we discuss what a loyalty campaign is, why they are important, how to set up a successful campaign and give tips on how to deploy a loyalty campaign using Ternair.

What is a Loyalty campaign?

A loyalty campaign is a marketing strategy designed to engage and reward customers for their repeat purchases and engagement with a brand. The goal of these campaigns is to increase customer loyalty, which can lead to higher customer retention, increased sales, and stronger brand loyalty. Loyalty campaigns can take different forms, such as savings programmes, exclusive offers, personalised discounts, or special events for loyal customers.

"Loyal customers spend on average 67% more than new customers."

Why are Loyalty campaign important?

Loyalty campaigns are crucial for businesses for several reasons:

1. Customer retention: Retaining existing customers is often more cost-effective than acquiring new ones. Loyalty campaigns help keep customers happy and motivate them to make repeat purchases.
2. Increased customer value: Loyal customers tend to spend more than new customers. By rewarding them and providing a positive customer experience, you increase Customer Lifetime Value (CLV).
3. Brand ambassadors: Satisfied customers are more likely to share their positive experiences with friends and family, which can lead to new customers without additional marketing costs.
4. Insights and data: Loyalty programmes provide valuable data on customer behaviour, preferences and purchasing patterns. These insights can be used to further personalise and improve the customer experience
5. Competitive advantage: In a competitive market, loyalty campaigns can help retain customers to the brand and keep them away from competitors.

"75 of loyal customers recommend brands to friends and family, which can help attract new customers without additional customer acquisition costs."

How do you set up a Loyalty campaign?

Setting up a loyalty campaign involves a number of steps:

1. Determine your goals: The first step is to determine the goals of your loyalty campaign. Do you want to increase customer retention, increase average spend per customer, or collect customer data?
2. Customer segmentation: Segment your customers based on their behaviour, preferences, and purchase history. This helps to understand who your loyal customers are, what motivates them, and what matches their needs and expectations.
3. Choose the right reward system: There are different types of reward systems, such as points programmes, cashback and exclusive discounts. Choose a system that suits your brand and is attractive to your customers.
4. Technology and tools: Use appropriate technologies and tools to support your loyalty campaign. This can range from dedicated loyalty software to integrations with your existing CRM and marketing automation platforms.
5. Communicate effectively: Use different channels to promote your loyalty programme, such as e-mail, social media and your website. Make sure customers are aware of the benefits and how they can participate in them.
6. Measure and optimise: Monitor the performance of your loyalty campaign by keeping track of relevant KPIs, such as participation rate, customer retention and average order value. Use this data to continuously optimise your strategy.

Tips for an effective Loyalty campaign

Here are some tips to ensure your loyalty campaign is effective:

1. Personalise the experience: use customer data to create personalised offers and rewards. This makes the experience more relevant and valuable to the customer.
2. Keep it interesting: Introduce new rewards or challenges regularly to keep customers' interest. A boring or predictable programme can quickly lose its appeal.
3. Reward different behaviours: Reward not only purchases, but also other customer behaviours such as product reviews, referrals, or survey participation. This strengthens engagement with your brand.
4. Provide exclusivity: Offer exclusive rewards or experiences that are not available to non-members. This creates a sense of value and status among your loyal customers.
5. Use gamification: Make use of game elements such as badges, levels and rankings to make the programme more fun and motivating.
6. Integrate feedback: Listen to your customers' feedback and adjust your programme to better meet their needs and expectations.
7. Simplicity in participation: Make sure your loyalty programme is easy to understand and use. Complex structures can discourage customers.
8. Consistent communication: Keep in regular contact with your customers to keep them informed of their progress and new offers. Use different channels for wider coverage.

"Retaining existing customers is five times cheaper than attracting new customers. In addition, the probability of existing customers making a purchase is 60-70%, compared to only 5-20% for new customers."

Examples of loyalty campaigns
There are several types of loyalty campaigns that help companies strengthen customer loyalty and maximise lifetime value for their customers:

1. Welcome campaigns:
   Description: These campaigns target new customers who have just signed up to a loyalty programme. The aim is to welcome them and inform them about the benefits of the programme.
   Features: Welcome offers, introductory discounts, and information on how points can be earned and redeemed.
   Goal: To encourage the first purchase and build a relationship with the customer.
   Example: An email campaign offering new members a 10% welcome discount on their first purchase and informing them about the benefits of membership.
2. Appreciation campaigns:
   Description: These campaigns focus on rewarding loyal customers for their continued support and purchases.
   Features: Exclusive discounts, special gifts, and access to VIP events or products.
   Purpose: To strengthen customer loyalty and thank customers for their loyalty.
   Example: An annual appreciation week in which loyal customers earn double points on purchases and access to a private sales event.
3. Retention campaigns:
   Description: These campaigns are designed to retain customers and keep them coming back for repeat purchases.
   Features: Personalised offers, reminders of points or rewards that are about to expire, and special incentives for repeat purchases.
   Goal: Reduce customer turnover and encourage repeat purchases.
   Example: An email reminding customers of their accumulated points and a limited-time offer for an additional reward on their next purchase.
4. Win-back campaigns:
   Description: These campaigns are aimed at reactivating inactive customers who have not made purchases for a while.
   Features: Personalised messages, special discounts, and personalised product recommendations.
   Goal: To win back customers who are in danger of being lost.
   Example: An e-mail campaign offering inactive customers a one-off 20% discount to entice them to return and make purchases again.

How can you successfully deploy a Loyalty campaign with Ternair?
Ternair is a powerful marketing automation tool that helps businesses manage and execute effective loyalty campaigns. Here are some steps to make the most of Ternair for your loyalty campaign:

1. Data integration: Integrate all your customer data within Ternair to get a complete picture of your customers. Think purchase history, interactions and demographic information.
2. Segmentation: Use this data to segment your customers based on their behaviour, buying patterns and preferences. This allows you to develop targeted and relevant loyalty campaigns and offers.
3. Personalised communication: Use the data and segmentation capabilities within Ternair to create personalised offers that match your customers' interests and behaviour. This increases the relevance and effectiveness of your communication, leading to higher engagement and loyalty.
4. Campaign automation: Automate your loyalty campaigns by setting triggers and workflows. For example, send a welcome message to new members of your loyalty programme, a birthday email or remind customers of their accumulated points and rewards.
5. Multichannel approach: Spread your loyalty campaign across multiple channels, such as email, SMS, and social media. This ensures a consistent and coherent experience for your customers, no matter how they interact with your brand.
6. Analysis and reporting: Monitor the performance of your campaigns with Ternair's analytical tools. Identify what works and what doesn't, and adjust your strategy to optimise results.

Conclusion

Loyalty campaigns are an essential part of an effective marketing strategy. They help strengthen customer relationships, increase customer retention and encourage repeat purchases. By defining your goals, knowing your audience, choosing the right reward system, and using a platform like Ternair, you can create and execute a successful loyalty campaign. Remember that constant evaluation and adjustment are crucial to the success of your campaign. By rewarding and nurturing loyalty, you build lasting customer relationships that strengthen and grow your brand.

Want to know more about setting up effective marketing automation campaigns? Keep following our series of articles where we go deeper into different aspects of marketing automation and share successful case studies.