Driving business growth is no easy feat, and in highly competitive markets the challenges of gaining market share, improving customer retention, and boosting profitability can be even more difficult. In these regards, significant advantages can be achieved for your business by implementing the right type of customer loyalty program. Join us as we explore the different aspects of successful customer loyalty and rewards programs.
Rewards programs are everywhere, it seems, and it’s easy to understand why. After all, if a customer has a choice of where to spend their hard-earned dollars, why wouldn’t they choose a company that’s willing to offer more for their money? Of course, not all customer rewards programs are created equal. At the end of the day, the type of rewards and loyalty program that a business has in place can be the deciding factor in how successful or profitable that business is. Therefore, your company should consider a rewards software that will help provide a rewards solution that delivers on your business goals, and truly incentivizes your customers to take advantage of it.
For starters, let’s take a look at the different components that are common in successful business rewards programs across all types of industry verticals and business segments. Whether you’re selling physical goods or professional services, many of the elements that make up well-structured and effective customer rewards programs will be very similar in function and purpose.
What Makes Up a Customer Rewards Program?
If you’ve seen one customer loyalty program, you’ve seen them all, right? Well, not exactly. Although many of the mechanics are similar, the exact combination that each system uses will be different based on factors such as the nature of the product, the average value of a purchase, the frequency of transactions, and others. How each business structures their rewards program will be determined by these criteria, along with customer preferences and analysis of the competitive business environment. Nevertheless, most rewards programs will have the following commonalities.
Points-Based Reward Systems
The core of any rewards program is how customers accumulate their rewards. This generally takes the form of a points system where a point value is calculated on each purchase. Sometimes points are assigned based on the dollars spent, where some orders will earn more points than others. An example of this is the Airmiles program, where every $5 spent on select groceries or at participating gas stations earns one mile, and every $10 spent at other types of participating retailers earns one mile. Other times, points are accumulated with each order where a certain number of consecutive orders earns a correlated reward. An example of this is commonly found at coffee shops, where every 10th cup of coffee is on the house.
Points-based rewards systems are very popular because they are simple in how they work. The more you spend, the more you earn, and the more you earn, the better rewards you can get. In addition, they are easy for customers to start using right away, especially with the incorporation of mobile rewards apps for smartphones and tablets, where customers can directly manage their accounts, accumulate points, and redeem points.
It’s also common for rewards programs to include different tiers for rewards access based on the total number of points a customer has accumulated. This gives customers the added incentive of holding on to their points for a longer period of time and shopping more frequently in order to reach higher tiers. These types of programs are common for travel-based businesses such as airlines, hotels, and car rental companies. As travelers rise up in the tiers, they can take advantage of more perks, such as complimentary hotel room or rental car upgrades, access to premium airport lounges, free in-flight meals or beverages, and other types of rewards that can make travel more enjoyable and comfortable.
One important element you will find in the most popular customer loyalty programs is that the rewards themselves are tied to achievable goals. This means that customers don’t need to spend a million dollars to get something in return. Basic rewards should be easy to obtain, and the progression up the ladder to other tiers or reward categories should be proportional to the effort required by customers. If the goals are too lofty, customers will quickly become frustrated at their lack of progress, and are more likely to quit the program or stop using it if the rewards always seem too far out of reach.
Valuable & Desirable Rewards
Another key part of a successful rewards program – other than having a customer rewards software – is to have incentives that are both valuable and desirable in the eyes of customers. You need to understand what kinds of rewards will drive the greatest impact as part of the program,
What Are the Advantages of Customer Rewards Programs?
There are profound advantages that can be realized by offering customers an enticing loyalty program. While some are easily noticeable on the surface, other benefits tend to appear a bit more behind-the-scenes over the long-term.
Attract New Customers & Gain Market Share
Perhaps the most obvious benefit of a loyalty program is the ability to effectively differentiate your business and draw interest away from competitors. A well-planned business loyalty program will give customers the extra push they need to choose your business instead of the competition, building your customer base and raising your position as the preferred brand in your sector.
Increase Repeat Business & Grow Average Order Value
Another significant benefit to a loyalty program is the impact that it can have on the frequency of transactions from your existing customer base, and the likelihood that their individual purchases will be of a higher dollar value. It’s not unusual for some loyalty programs to have specific bonuses tied to particular featured products or that are linked to dollar value thresholds on individual orders. For example, reward members receive free shipping on orders over $100, or receive a free accessory bundle with the purchase of a high-value appliance. The possibilities are boundless, and are a good example of the effects that can be realized by offering valuable and desirable incentives that can truly drive results from the program.
Reduce Costs of Marketing & Advertising Programs
It’s been proven time and time again that, on average, it takes less effort and fewer marketing dollars to drive repeat business than it does to acquire a new customer. Since a loyalty rewards program works by keeping customers coming back for more, the ROI of the program is often much higher when compared to other campaigns designed for customer retention and acquisition. While a loyalty program is not necessarily a complete replacement for other types of campaigns, its ability to create significant synergy with other marketing campaigns cannot be overstated. A great loyalty program entangles customers with your brand, giving them more reasons to continue to do business with you, over and over. As a result, your profitability goes up while your costs of marketing and advertising can remain stable, or perhaps even decline over time.
Leveraging a customer loyalty program is unquestionably a good strategic move for businesses, but the implementation has to be done right to capitalize on the many benefits it can provide. One of the best ways to do this is to integrate your business rewards program directly with the software used on your point-of-sale system. This way, it can be a seamless and efficient experience for customers to acquire rewards points and apply them to purchases right at the time of the transaction, all from a single digital interface.
How Can Customer Loyalty Software Be Integrated with a Point-of-Sale System?
To provide this kind of smooth flow for the customer and employees, your business’ POS solution must have the capability to manage a customer rewards account right from the terminal. To do so, it should be able to review the account history, add points to the customers’ total, redeem program points on purchases, and more. Unfortunately, not all POS terminals will have this capability, especially those systems that are aging and in need of an upgrade.
Many businesses have opted to replace out-of-date POS systems with a modern and state-of-the-art payment processing solution, such as the suite of Clover POS stations and devices available from MONEXgroup. These comprehensive point-of-sale and payment systems are capable of performing a broad range of critical business tasks that go far beyond processing transactions. From one interface, your business will be able to handle transaction processing using all types of payment methods, as well as perform inventory control, scheduling, sales performance reporting, and everything involved in managing a powerful customer rewards program.
Whether you want the power and complete functionality of the Clover Station Duo, the compact footprint and convenience of the Clover Mini payment terminal, or the unmatched portability of the Clover Flex mobile POS system, these devices are your all-in-one solution for payment processing and customer loyalty software. If you’re aiming high with plans to drive sales with an enticing customer loyalty program, you’ve got to have the right tools and POS technology in place to make managing these programs simple for everyone, especially your customers.
Drive Growth with a Business Loyalty Program and MONEXgroup
Having a compelling business rewards program and combining it with full-featured POS and ecommerce systems is definitely the way to go, but to really achieve the synergies that are possible, you also need the right merchant services provider to assist with the setup, integration, and ongoing support. MONEXgroup helps our clients deploy impactful customer loyalty programs across many different industries and business segments with great success.
Our payment processing experts will help you select the right combination of technology and strategy to maximize the benefits to your business, while our 24/7/365 customer support and technical service teams are always available when you need them. With MONEXgroup as your business partner, your company will be equipped to win new customers, build loyalty, and drive real business results with an impressive loyalty program that works.
Contact us now to learn more and get started!