Tag: Loyalty Marketing

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  • Why we care about loyalty marketing

    Why we care about loyalty marketing

    infomercial

    As a marketer, one of your primary goals is to not only attract new customers but retain the ones you already have and entice them to buy from your business again and again. Offering a competitively priced product that customers want to purchase is a huge piece of the puzzle. But how do you convince those customers to stay with you? How do you get them to buy, not once, but many times over? The answer largely lies in building a relationship with your customers and earning their loyalty. To do so takes time and effort — from providing exceptional service and soliciting feedback to understanding their needs. However, implementing a strong customer loyalty program is a highly effective tool in the loyalty kit. Anyone who has experienced the thrill of earning that free large iced coffee or cashed in on rewards points to get special deals or freebies at their favorite retailers or restaurants has interacted with a loyalty marketing program. When executed properly, they are a win-win: Customers benefit from discounts or other perks on items they’d most likely be buying anyway, while retailers enjoy customer retention, increased revenue and other avenues for growth. The programs, perhaps unsurprisingly, are popular. In 2022, U.S. consumers belonged to an average of more than 16 loyalty programs and regularly used about half of them, according to research firm Statista. The global market for loyalty is worth billions, forecast to explode to $24 billion by the end of 2028. In this article, we’ll go over what loyalty marketing is, walk through a few different types of loyalty programs and discuss loyalty marketing in the digital age (and what it means for marketers) — as well as touch on what’s ahead for marketers in the space. Table of contents Estimated reading time: 6 minutes What is loyalty marketing? Simply put, loyalty marketing is a strategy by which businesses attempt to attract customers, build their trust and retain them through offering incentives, such as free products (beauty brands, for example, often include sample-sized products in orders over a certain dollar amount), discounts on products and perks such as earning points on purchases that can be redeemed later for rewards. Airline frequent flyer programs fall under the loyalty umbrella. The idea is that customers who spend money (as well as sign up for the program) are rewarded with things that either hold monetary value or receive exclusive, early access to sales, new products or the like.  Regardless of the perk, however, the goal is two-fold:  To keep existing customers returning for more. To have those same customers refer others to do the same.  And because research shows that loyal customers spend more and more on each subsequent purchase (and are more likely to try new products from businesses they are loyal to), marketers know that this segment is an important part of any marketing strategy. Types of loyalty programs There are several types of loyalty programs out there. Some of the most common are: Points programs. In this common program, points are accumulated as dollars are spent. Customers redeem points for benefits that might include discounts, freebies, etc. Tiered programs. Upon signing up, customers might be at the lowest tier with basic perks. As they spend more, they move to higher tiers with better incentives. Paid loyalty programs. An obvious example in this space is Amazon Prime, which, for a yearly fee, provides members with free two-day shipping, access to certain sales and the ability to stream certain titles and shows for free on its streaming service, among other perks. It’s also worth mentioning subscription models based on recurring revenue. These can serve as ways of retaining customers over an extended period of time, although the challenge is securing renewals. The subscription model can be found everywhere, from online delivery services to regularly purchased consumer goods like razor blades and high-cost software. Loyalty marketing in the digital age For consumers of a certain age, loyalty marketing brings to mind cards (punched or stamped) presented at checkout in brick-and-mortar stores which are then carefully tucked back in a wallet and saved until the pre-determined number of purchases is met and a reward is doled out.  These programs (which absolutely still exist) are relatively simplistic, free to sign up for and offer a visible path to a tangible reward — that free sandwich after the fifth purchase, for example — for spending money with a particular business. But they also rely on shoppers returning to the brick-and-mortar store to both spend and earn rewards. Because they’re basic (filling out a quick card in-store or providing an email address is often about all there is to signup), it’s tough for businesses to do targeted marketing or track particulars about what customers are buying, when they’re buying it and where. Today, loyalty must be mobile-forward and integrated wherever customers engage with brands and retailers. This omnichannel approach to loyalty marketing aims to create engagement by: Interacting with customers. Tracking their purchases/rewards across devices. Using that information to anticipate their wants and needs.  However, the most important part of omnichannel loyalty is that it provides retailers and marketers with large amounts of relevant data that, if used correctly, can illuminate customer behavior and lead to better marketing strategies. Starbucks’s loyalty marketing program — explained in detail here — is a great example of omnichannel. Customers who visit a café to have coffee might be tempted to use the free Wi-Fi. But access requires users to provide an email address and agree to be contacted about promotions and offers.  The company then ups the ante a bit. When an offer email comes in, redeeming it requires the customer to sign up for the rewards program and use the app to make the purchase that leads to the reward. This is engagement across multiple channels, which enables the company to send targeted offers based on location, drink preference and so on. These targeted offers tell the customer that Starbucks understands what they want — which in turn builds additional trust. What’s next in loyalty marketing? In 2023, marketers must up their game and devise out-of-the-box marketing programs to keep customers’ fleeting attention spans. Adding gamification to the loyalty mix — using trivia, puzzles and other app-based games to increase engagement — is one trend that’s gaining more traction. Marketers also make rewards mobile-friendly and continue to push toward app-based programs Strategic partnerships are also on the rise. For instance, many hotel brands have linked with ride-sharing providers to offer deals to guests enrolled in their rewards programs. But regardless of what your loyalty program looks like in 2023, ensure an emotional connection to your customers underpins it. Emotions have the highest impact on loyalty, according to Capgemini.  Again, that means marketers must create programs and experiences tailored to consumers’ preferences. But the payoff is there: 70% of emotionally engaged consumers spend twice as much on brands they are loyal to, per the same Capgemini report. But wait, there’s more! The web is chock full of resources about all things loyalty marketing. Here’s a great primer by the website Loyalty Lion: What is loyalty marketing? The importance of brand loyalty in modern marketing Here are some examples of loyalty programs:  Plus some stats on loyalty marketing: 14 customer loyalty trends to follow And here’s a guide to subscription business models.

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  • How to send mobile app messages that build loyalty and stay relevant

    How to send mobile app messages that build loyalty and stay relevant

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    Customers download your app because they want to know more about what your brand has to offer. Mobile messages can maintain and grow the relationship, but you have to use the right communications. “Downloading an app is a big step in customers showing their loyalty to a brand,” said Sydney Smith, client marketing manager at cross-channel marketing platform Cordial, at The MarTech Conference. “So as a brand, you want to ensure you pay respect to that loyalty by sending the right kinds of messages through your mobile channel.” There are three main categories of mobile app messages, each with their own strengths and best practices. Dig deeper: Why we care about mobile marketing Push notifications Push notifications are the most common form of mobile app message. They arrive on the home screen or lock screen of a user’s phone. “The first question you could ask yourself is, ‘Do my customers need to know this right now?’” said Smith. “If the answer is yes, then you should probably send a push notification.” These messages are often automatically triggered, based on customers’ product preferences, orders and behaviors on the app. “Some great examples of push notifications are order updates, abandoned cart reminders, last-minute sales, back in stock or low-inventory alerts, and subscription reminders,” Smith said. Just because your customer downloads your app doesn’t mean they automatically receive push notifications. They have to opt in. Don’t abuse that ability by sending out too many notifications. Marketers should think about their own experience with this. Why did they find some push notifications helpful and were others irritating. Use those insights to help inform the messages you send. In-app messages In-app messages are those customers receive when they’re already in the app. “These are pop-up alerts that happen while you’re already using the application, and they’re usually event-driven because of this,” said Andrew Shields, Cordial’s senior technical product manager. “Since the user is interacting with your app, you can capture that real-time data, and they almost always use deep linking so that when the user clicks on them [the messages] take them to somewhere specific in the application to then complete some action.” Shields added, “There are a lot of valuable use cases for in-app messages. You can welcome users with a series of onboarding screens. You can alert them to new products, or let them know about targeted promotions that might fit their previous behaviors.” Additionally, in-app messages can be used to send loyalty status updates. If the customer has reached a new tier in the loyalty program, send a message of congratulations. You can also send messages about updates and new features in the app to spur them on in engaging with the app. Dig deeper: Mobile leads growth in the expanding in-game ad industry Inbox messages Inbox messages are the least common of the three categories. They tend to be longer-form and kept in the customers’ app account. They are sometimes sent to customers who have disabled push notifications. “[Inbox messages] sometimes have an expiration date tied to them that make them disappear eventually, but in general they allow users to refer back to them so they can read that information at a later date,” said Shields. “Customers aren’t alerted to this information that you’re sending immediately, but instead this information is being stored in a place that customers can check on their own time,” said Smith.  She added, “Some brands use inbox messages to send information to customers who have push notifications disabled… That way they could reach everybody who had push enabled [during a current promotion], but they could reach everybody who had pushed disabled whenever they checked their app again.” Marketers who have a solid game plan around these three kinds of mobile app messages will be able to keep customers informed and interested in the brand. They can also use combinations of the three to handle specific promotions, depending on how their customers respond to previous mobile campaigns. Register for The MarTech Conference here.

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  • 2023 predictions: How marketers will approach web3, virtual experiences and gaming this year

    2023 predictions: How marketers will approach web3, virtual experiences and gaming this year

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    The metaverse talk over the last year unlocked the creativity of marketers to imagine how they will engage customers in the digital, virtual future. In the year to come, many of these ideas will be viable, depending on the maturity of platforms and the lengths to which marketers will go to meet customers where they are. It isn’t just talk. Big brands like Samsung, Under Armour and Walmart have rolled out multi-pronged, long-term engagements in virtual worlds and with virtual goods. Metaverse-related activations are in about half of marketers’ immediate plans, or they’re being considered. Here’s the shape some of those plans will take in the year ahead. Return to marketing basics Virtual worlds and augmented reality experiences have the potential to reach customers in fresh, immersive ways. Marketers will focus on VR and AR experiences, and, following recent crypto-crashes, will likely hold off on NFT activations tied up in cryptocurrency value. “I think there’s definitely a sense of a reality check on the crypto side of the metaverse,” said Andrew Frank, VP distinguished analyst at Gartner. “I think we’re going to see marketing organizations get much more practical and realistic about the value of these technologies. They’ll be looking at how they can use these technologies to enhance loyalties and more secure rewards currencies.” This “return to marketing basics” means that marketers will stick with long-running loyalty and data strategies that can be enhanced with the new technology. For instance, NFTs and other digital tokens can provide discounts, like a coupon, without getting confused with investments in cryptocurrency. “You can have [brand] advocacy without getting involved in this whole value of crypto as an investment vehicle,” said Frank. “Another application of NFTs is the idea that you can selectively disclose your interest and intentions to a marketer,” Frank added. “Instead of collecting permission, you can use that [blockchain-based] loyalty card to express interest in products and general preferences.” NFTs in loyalty programs “The recent FTX collapse has sparked a lot of uncertainty and fear within the crypto/NFT market, but despite this situation, we are still seeing a lot of interest from brands to launch web3 activations,” said Laura Connell, consumer trends manager for consumer insights and analytics company GWI. “Because the metaverse’s focus is on community, brands will find different and new ways for consumers to digitally interact with them and each other.” For instance, web3 users can acquire an NFT that unlocks certain privileges, just like traditional rewards programs. Because the NFT is supported by a decentralized blockchain ledger, the data relating to the customer’s engagement isn’t a private asset that a company or third party retains. It’s on the blockchain, not in a company’s database. “We can expect to see brands begin to engage with NFTs more as they bake these digital activations in their loyalty and reward programs,” said Connell. “As we already see with Nike, Swoosh and Starbucks, rewarding engaged community members is the new era of brand marketing and customer retention.” She added, “Within web3, we see NFTs as a brand loyalty program that could identify and curate a closer group of consumers than ever before.” Discovering social cues and interactions Virtual worlds and tokens are new for consumers and marketers alike. As brands get bolder and the space matures, they’ll be learning more about how users interact in this new environment. “We’re starting to see ‘metaverse budgets,’ RFPs and internal ‘metaverse teams’ as companies formally commit to the metaverse beyond simply ‘testing the waters.’” said Alex Howland, President and cofounder of virtual world platform Virbela. “These innovators will discover more about the social cues that allow for complex interactions and how that can scale far beyond anything video conferencing accommodates.” “A robust ecosystem of varied social environments will be an exciting exploration for companies in the metaverse in 2023,” said Sheldon Brown, cofounder and VP of product design and innovation for Virbella. “[These environments are] mirroring how we move between our real-world environments and emphasizing aspects of ourselves in different ways, in different contexts.” Image: Gartner. The rise of gaming influencers As marketers in gaming already know, the gaming ecosphere has its own rising stars. Look for more brands to tap into these thriving communities in the year ahead.  “[This] will be the year that marketers embrace partnerships with gaming influencers, even if no obvious direct ties to the gaming community exist,” said Alexander Frolov, cofounder and CEO of influencer marketing platform HypeAuditor. “While the gamers’ main platform might be Twitch or a similar streaming service, they often have a following on other social media platforms, such as Instagram and YouTube. For instance, Samsung, Red Bull, and even Hershey are some of the brands who already have partnerships with Ninja, the most followed gaming streamer on Twitch. We expect to see a surplus of non-gaming brands following in their wake.” Dig deeper: PepsiCo’s gaming and esports strategies

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  • What is ecommerce and which trends are shaping its future?

    What is ecommerce and which trends are shaping its future?

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    By now, it would be difficult, if not impossible, to find someone old enough to use a digital device who hasn’t shopped online at some point over the past couple of years. If you’ve ever purchased a recurring shipment of laundry detergent, bid on a vintage pair of sunglasses during an online auction, or even downloaded an e-book to your tablet or reader, then you’ve engaged in ecommerce. Indeed, virtually anything can be bought and sold online — and virtually anyone can establish an online storefront to engage in ecommerce. But getting in on the action requires online retailers to be nimble and able to attract and retain customers by providing high-quality, seamless shopping experiences. This article will explain broadly what ecommerce is, impactful trends shaping the industry, both today and into the future, and discuss the rise of mobile commerce (m-commerce), in which ecommerce companies allow customers to complete purchases via mobile apps rather than using links to drive them back to websites.     Table of contents What is ecommerce? In the simplest terms, ecommerce is the buying and selling of goods and services on the internet. Every type of transaction (B2B, B2C, C2C, etc.) that is completed online falls under the ecommerce umbrella. Ecommerce allows companies of all sizes and shapes, from small businesses to the largest corporations, to engage online and reach buyers anytime, anywhere. While ecommerce traces its roots back to the 1970s, trading goods and services online as we know it today has been around since at least the mid-1990s (when the websites of two seminal companies, Amazon and Ebay, both launched). Close to 30 years later, worldwide retail ecommerce sales reached a staggering $5.2 trillion in 2021, a number that is on track to balloon another 56 percent over the next five years, according to research firm Statista. By 2027, Amazon alone will rake in more than $1 trillion in online sales.   There are several reasons why ecommerce only continues to grow. Convenience is one major driving factor. Because online consumers are unencumbered by the constraints of brick-and-mortar stores — the internet is open 24 hours a day, seven days a week — they are free to shop literally whenever they want. Tack on popular draws like free shipping, or the benefits and perks that come with online membership programs like Amazon Prime, and it’s not difficult to envision a future in which ecommerce dominates; by 2026, it will make up close to a third (31 percent) of all sales in the US.   Platform vs. marketplace Broadly speaking, business owners looking to get into ecommerce can either sell their products on an online marketplace (think Etsy, Amazon, and Walmart) or via an ecommerce platform (Shopify, Squarespace). Ecommerce platforms are simply software applications that enable sellers and their consumers to interact at an online storefront. Marketplaces, on the other hand, are exactly what they sound like — a type of ecommerce site where many different sellers connect with buyers. While there are pros and cons to both models, online marketplaces are considerably less risky because there are virtually no startup costs or website maintenance to worry about. On the other hand, there’s stiffer competition and it’s difficult to stand out. Platforms might cost more to start up and maintain, but business owners have direct insight into their customers’ behavior, making it easier to establish brand awareness and gain loyalty. Dig deeper: How marketers on Amazon can still launch and grow brands Trends impacting ecommerce It’s impossible to ignore the impact that the COVID-19 pandemic had on ecommerce sales, which in the United States were some $870 billion in 2021, representing a 50.5% jump over 2019. Not only did the pandemic force shoppers to change their habits overnight (online grocery shopping exploded, for example), but it also forced businesses to up their ecommerce games, or even jump into the pool for the first time. As the world adjusts to living with COVID and the disruptions it will continue to bring (supply chain problems, illnesses at distribution centers causing shipping delays, etc.), online businesses must be ready to adapt, as well as understand that consumers — even as they shop online in record numbers — are increasingly returning to brick-and-mortar stores. That’s why industry-watchers say that the future of ecommerce is in the omnichannel sales approach, which provides customers with a seamless shopping experience, regardless of whether they’re shopping in store, online, via a mobile app, or by phone. In a practical sense, it means that shoppers experience seamless communication between channels. With the omnichannel approach, a customer, for example, can complete a purchase online, but can also call customer service to get return information on that same order. Artificial intelligence (AI) and machine learning, unsurprisingly, have a huge role to play in the evolution of ecommerce. Harnessing data to understand what and when shoppers buy — and using it to personalize the buying experience and help make business and inventory decisions — is helping make ecommerce more efficient for bother buyers and sellers.   The rise of mobile and social commerce Perhaps no trend impacting ecommerce is as prevalent as the rise of mobile, or m-commerce; by 2025, retail m-commerce sales — in which shoppers complete purchases via their smartphones or tablets using apps — are expected to amount to some $710 billion. It’s a huge opportunity, but sellers have to be ready to take advantage of the growth. Mobile sites must be easy to use and help shoppers quickly find what they’re looking for. But another large challenge is in getting customers to complete their purchases; cart abandonment happens when payment forms are cumbersome, filled with clicks, or aren’t intuitive. Mobile payment options like Apple Pay, Android Pay, Amazon Pay, and others enable shoppers to buy with one click; Amazon also has the “Buy Now” button that bypasses its multi-step process. Sellers must also understand the ongoing impact that social media has had on e-, and m-, commerce. Increasingly, customers want to browse and purchase items without ever leaving their social platform of choice.  Instagram, for example, makes it easy for brands to connect to their customers, but creating content that not only stands out, but leads to a sale, is crucial. This competitive field is extremely crowded, so sellers have to take the time to actively engage with customers. The future of ecommerce Sophisticated, tech-savvy consumers will no doubt play the leading role in the continued evolution of ecommerce, demanding enhanced shopping experiences. For example, video shopping — in which brands create content that shows products in action — is gaining a growing foothold and may shake things up in 2023. Don’t discount the importance social/video platforms like TikTok will continue to have on huge swaths of the buying population. Going beyond the use of traditional video, cutting-edge ecommerce retailers are starting to explore the possibilities of virtual reality, offering potential customers the opportunity to experience a product before buying. The buy-now-pay-later phenomenon is also gaining major traction. Customers are enticed by the ability to split purchases large or small into interest-free payments using systems like Klarna, Afterpay, and others. Payment flexibility will play a role in helping offset the impact inflation has had on consumers’ purchasing behavior. But sellers are also well-advised to offer generous return policies; consumers are more likely make repeat purchases from sellers with easy returns. Flexible fulfillment (buy online, pickup in store) is similarly another growing trend to watch. Though it’s not necessarily new, the name of the game for customers is convenience, so sellers must continue to find ways to increase the ease factor. Finally, ecommerce sellers need to be ready to cater to the new generations of shoppers entering the marketplace. Their buying power, coupled with their extreme tech-savviness, makes them a formidable challenge — and opportunity — for retailers. Resources for learning more about ecommerce We’ve got a wealth of resources to help you learn more about ecommerce, from how to grow your e-commerce business to tracking how inventory challenges pressure both in-store and online sales. From around the web: Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here. Add MarTech to your Google News feed.     Related stories New on MarTech @media screen and (min-width: 800px) { #div-gpt-ad-6013980-7 { display: flex !important; justify-content: center !important; align-items: center !important; min-width:770px; min-height:260px; } } @media screen and (min-width: 1279px) { #div-gpt-ad-6013980-7 { display: flex !important; justify-content: center !important; align-items: center !important; min-width:800px!important; min-height:440px!important; } }

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