How Loyalty Programs Future-Proof Brands Across Industries
Yotpo is a Business Reporter client.
Loyalty programs benefit shoppers and businesses alike, especially as customer acquisition costs continue to skyrocket.
Increased paid advertising costs, more competitors in the market and the devaluation of third-party cookies are all pointing businesses toward revamping their retention efforts to improve overall business performance. For many forward-thinking brands, this means creating a strategic loyalty program.
According to Yotpo’s State of Brand Loyalty Survey 2022, loyalty programs make 60% of global shoppers more brand-loyal. Further, 84% of survey respondents say that belonging to a loyalty program influences their decision to buy again from a brand. Loyalty programs deliver hyper-relevant, personalized experiences that make shoppers feel valued, and they ensure that businesses establish one-to-one relationships with valued customers. Shoppers no longer want generalized experiences; they want their path to purchase to be tailored to their preferences and inclinations.
Loyalty programs aren’t just good for shoppers—they’re also good for business. Whether brands want to increase their average order value, collect more customer data or grow their social media reach, loyalty programs can be constructed to fit. For example, fashion retailers can use their loyalty programs to keep their brand top of mind between consumer purchasing cycles and encourage cross-product adoption through member engagement campaigns and product-specific discounts.
Similarly, many consumers heavily research major purchases like furniture and appliances—which increases their chances of coming across competitors—and brands can offer program sign-up discounts, encouraging shoppers to opt for their brand.
However, brands can’t just consider traditional business goals when building a successful program. Brand values are increasingly top of mind for shoppers: 84% of survey respondents said they are more inclined to buy from a brand whose values align with their own. For example, a sustainable fashion brand wanted to bake its brand mission into its loyalty program to drive shopper affinity and engagement. It came up with a digital wallet that allows loyalty members to track their impact on sustainability with every purchase and level up to different achievements. By structuring its loyalty program around social responsibility, the brand reinforces its mission and encourages shoppers to play an active role in combating climate change.
Another example comes from a popular women’s fashion brand that wanted to target Generation Z shoppers, who notoriously jump from competitor to competitor. It invested in a loyalty program to boost retention and create thoughtful loyalty experiences throughout the customer journey. VIP benefits, like opportunities to be featured on the brand’s social channels and exclusive access to products, enable the fashion brand to grab the attention of its audience.
These examples highlight the needs of brands to create unique programs aligned with core values and differentiators; gone are the days of “burn and churn” programs. Consumers buy based on values, emotional connections and trust—and brands must do much more than facilitate a transaction to earn long-term loyalty.
Read Yotpo’s State of Brand Loyalty report.
— Cecilia Beard, Content Marketing, Yotpo
This article originally appeared in Business Reporter. Image: iStock id1338265862
