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Last month, the inaugural 2023-2024 Asia Pacific Loyalty Awards saw big brands like Woolworths, Accor, Westpac, SuperCheap Auto and Genesis Energy take out the major wins for the strength, effectiveness and engagement of their loyalty programs.
An effective and engaging loyalty program delivers myriad benefits to a business including repeat customers, increased revenue and impactful word-of-mouth marketing that just can’t be bought.
But you don’t need to be a big business to achieve the same results and Australian small and medium enterprises (SMEs) are well placed to develop effective and engaging solutions to build a greater connection with their customers and drive increased loyalty – and revenue.
Will Feutrill, one of the judges of the inaugural Asia Pacific Loyalty Awards and Blackhawk Network (BHN) RVP of Incentives AU shares his top five tips for SMEs looking to implement a simple, cost-effective and engaging loyalty program.
Tip 1. Know Your Customers
It’s absolutely essential to understand your audience as well as respect their privacy. Data must be key to your strategy and with the dangers from a privacy point of view around using secondary or tertiary sources, you should always prioritise creating or optimising first party data. Create good reasons for your customers to share information with you, create great discipline around how you collect and store it, and only use the data when it can add real value to your customers.
Valuable customer insights and purchasing habits can also be gleaned through thoughtful non-identifiable market research via DIY online research platforms like Survey Monkey or affordable research companies like YouGov. This informative data can help you design and build a loyalty program that resonates with your customers.
Safeguarding your customers individual data is also paramount, so ensure your systems and those of your loyalty program partners are robust as once trust is lost, it is hard to rebuild. If a breach should occur, even your most loyal customers will judge you on how you respond. Be honest, be transparent, be fast and if necessary, compensate.
Tip 2. Keep It Simple
Loyalty programs with a straightforward structure that is easy to understand and offers tangible customer benefits – often via a points-based system where customers earn rewards for each purchase – tend to be the most successful.
Maintaining communication is important but you have to look at what makes sense. What role do you play in your customer’s lives? If you sell something that people only buy once a year, then don’t communicate to them every day. Map your customer lifecycle and talk to them about what they would like from a loyalty program.
Discounts and offers are always welcomed by customers but rewards are just that, a reward for their loyalty and one that often generates a positive emotional response. Pre-paid or eGift cards offer a great means of rewarding customers and the benefits are not only seen in loyalty terms, but in increased spending. Our research shows that Australians are willing to spend well over and above a gift card’s value – with 92% of us spending an average $81 over and above a $10 gift card and 66% of Australians spending almost double on a $100 gift card – which is a solid win for an individual SME’s bottom line.
Tip 3. Use Technology and Tools
SMEs should leverage technology to streamline the administration and management of their loyalty program but that doesn’t mean you need to break the bank. There are numerous affordable software solutions and mobile apps specifically designed for small businesses to simplify the tracking of customer interactions, reward redemption, and communication.
But as I said before, it’s important to work with a technology partner you can trust, especially when it comes to data privacy. BHN is a global leader in loyalty programs and we work across all major industries so have the opportunity to observe and provide insights on macro trends that may further help your customer engagement and loyalty.
Tip 4. Drive Engagement
Personalisation is key here as it shows you understand your audience. Offering personalised rewards based on customers’ individual preferences or purchasing habits helps to build a sense of community around your brand and foster long-term relationships built on loyalty and trust.
Incorporating interactive elements into your loyalty program will also increase engagement, and gamification can really drive this. Mobile and online gaming has exploded in recent years so incorporating fun elements into your platform really helps drive engagement.
And be active on socials with engaging content that can link through to your program and partners, and quality community management. It’s all about adding real value to the customer experience that will in turn, make them more loyal.
Tip 5. Always Improving
It’s not enough to set and forget, an effective loyalty program does require ongoing work but the business rewards speak for themselves. The tech stack that you choose to leverage for your loyalty program will have in built guidelines and benchmarks to track.
You should start by setting goals and regularly evaluate the performance of your loyalty program and monitor how your customers interact with your program, and pivot as necessary. Flexibility and adaptability are crucial for ensuring the ongoing success of your loyalty initiative.
Key metrics such as customer retention rates, redemption frequency and percentage of purchases via offers, basket sizes, customer feedback and overall program engagement should all form part of your program evaluation.
The broad and ongoing benefits of a successful loyalty program are undeniable, and not just the preserve of big business. Australian SMEs can develop affordable and engaging loyalty programs with ease that deliver measurable results and drive sustainable growth.
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