Together with data-driven loyalty and engagement platform LoyaltyLion, we share the latest loyalty strategies brands are using to drive more revenue from existing customers.
In today's economy, customer loyalty is more important than ever. In fact, 74% of marketers considering loyalty and retention a top goal for this year. With rising acquisition costs, brands must find ways to drive revenue from existing customers and turn them into brand advocates. In a crowded marketplace where competition is fierce, this is no easy feat. The challenge is getting customers to move beyond their first purchase, and to keep them engaged and coming back for more.
Here are five loyalty plays that can help you drive more repeat purchases and increase customer spend in a challenging economic climate.
Target first-time purchasers with personalised SMS campaigns to convert them into repeat shoppers
Shoppers who buy at least twice are up to nine times more likely to buy again—and these repeat purchasers are key to your bottom line. On average, loyal customers are worth up to 10 times as much as their first purchase. Getting to that second purchase is critical, but 50-80% of customers buy once and never again. So, how can brands convert more of those one-time buyers?
Targeting first-time purchasers with personalised SMS campaigns is a great way to deepen customer loyalty during this key phase of the customer lifecycle. Two common SMS strategies you might consider are:
- Sending a tailored product recommendation.
Your new customer might have found you when searching for a specific e item, but sharing personalised product recommendations is a great way to showcase how you can take the relationship to the next level and provide them with even more value. For example, they found you because they were looking for a new pair of running shoes. After they’ve bought shoes from you, send a targeted SMS recommending running shorts so they see you as the shop for all of their running apparel needs.
Sustainable adventure apparel brand Cotopaxi took a similar approach—they created a triggered post-purchase flow to check in with subscribers three weeks after buying and share a link to some of their newest items. This way, they can aim to drive repeat purchases when customers are enjoying their first product and the brand is still top-of-mind.
To help you decide which products to recommend, you can also turn to your own customer data. Recommending products that have a high conversion to second purchase, or products that similar customers who went on to have high LTV purchased next, is a great way to get personalised with these offers.
- Sharing a timely offer.
Offers like discounts and free gifts can be another great way to incentivise a second purchase. You can even create bespoke offers only available for second-time purchasers to help your new customer feel more special. As with any SMS offer, timing is everything, so determine the best time to send your offer. You can also consider looking at how long it typically takes a customer to make their second purchase, and time your offers accordingly. For example, if first-time purchasers who buy a dress typically make a second purchase within two weeks, consider targeting them with an offer around that two-week mark.
Send post-purchase messages to non-members to drive more loyalty programme signups
Customers who join your loyalty programme are 47% more likely to make a repeat purchase. While getting customers to join your loyalty programme is a great way to strengthen the relationship and increase customer LTV, most customers aren’t ready to join until after they make a purchase. This means it’s important to have multiple paths to get them there. Post-purchase can be a particularly beneficial time for driving signups with SMS, with post-purchase messages seeing up to almost 22% click-through rates and 33% conversion rates.
Consider using a triggered post-purchase flow to thank new customers for their purchases, and invite them to join your loyalty programme when they’re still in that moment of high intent to drive more signups. You can also highlight loyalty programme perks to help drive conversions.
Digitally native lifestyle brand LIVELY takes this approach with new customers. After their first purchase, customers are sent a thank you with a link to join the loyalty programme. To sweeten the deal, they also offer these customers a discount on their next purchase if they join. Not only does this help drive rewards signups, but it also moves these customers towards their second purchase—helping them deepen loyalty and become even more valuable repeat purchasers.
SMS is a great way to drive loyalty programme sign-ups. However, the reverse is also true: offering loyalty programme perks to incentivise SMS opt-in is a great way to grow your SMS list as well, which will in turn help you keep loyalty programme engagement and redemption rates high (more on that later on in this article).
Consider tiering your loyalty programme and offering various types of incentives, discounts, and rewards to increase purchase frequency
Increasing purchase frequency is a great way to increase customer LTV, and tiered loyalty programmes are an incredibly effective strategy for doing this. They work well because they engage customers, motivate them to make purchases, unlock higher levels, and gain access to more valuable rewards.
The key to successfully executing a tiered loyalty programme is to create a structure that offers meaningful and enticing rewards at each tier level, ensuring the rewards become progressively more valuable as customers advance through the tiers.
Consider a mix of benefits, such as discounts, exclusive offers, early access to products, and VIP experiences. And don’t forget to inject some of your brand’s personality into your benefits, too! Vodka brand Au Vodka does a fantastic job of this. Their Silver tier members get priority access to Au events, and their Gold tier members get sent new flavours to try before anyone else. Ensuring that you align with your customers' desires is a great way to build an emotional connection with them, further bolstering the effectiveness of your programme.
You also need to treat your tiered loyalty programme as an extension of your brand, weaving in your values and messaging. For example, name your tiers so that they reflect your tone of voice and relate to your product. One example of this being done well can be seen in jewellery brand Astrid & Miyu’s loyalty programme. Notice how they play on the traditional ‘Bronze, Silver, Gold’ labelling but mix things up by including Rose Gold to reflect their product. They also name the introductory tier ‘Astrid and You’, which is more personalised and inviting.
Share personalised redemption reminders at the right moments to keep participation high
After getting customers to sign up, you need to make sure that they stay engaged in the loyalty programme. The average customer is active in less than half of the loyalty programmes they belong to. Sending personalised, well-timed SMS messages is a great way to keep loyalty programme engagement and redemptions—and ultimately loyalty member LTV—high.
Here are a few key moments sending targeted SMS messages can be particularly effective in supporting your loyalty programme:
- Reward available
Send an SMS letting your customer know they’ve earned a new reward.
- Abandoned reward
Similar to an abandoned cart message, remind customers to complete the redemption process for their latest award to help improve redemption rates.
- Referral completed
If you award loyalty points or other incentives for a claimed referral, this is a great way to set up your referred customer for a long-term relationship with your brand. Getting a recommendation from a friend is one of the strongest purchase indicators for new customers. If you let your existing customer know their referral is redeemed, they might be more likely to reach out to the redeemer to chat about their new purchase and reinforce that recommendation, strengthening your relationship with both customers.
- Tier qualification and changes
Let customers know when they are approaching a new reward or loyalty tier. This is a great way to nudge them to make another purchase to reach that milestone.
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Reward referrals in your loyalty programme to drive word-of-mouth acquisition
Did you know that customers are four times more likely to buy when referred by a friend or family member? Referrals are your secret ingredient when it comes to driving acquisition, which is why it’s so important to reward this behaviour. It costs relatively little to incentivise referrals, yet it’s such an effective way to gain new customers, making it a very cost-efficient method to drive growth for your store. Word-of-mouth marketing leads to a steady stream of new customers who are more likely to convert and become loyal themselves—a real win-win for everyone.
You can work referrals into your loyalty programme in a number of ways. For example, you could:
- Allow customers to unlock rewards for successful referrals. These rewards could include money-off vouchers, free products, or other exclusive perks.
- Offer a reward to both the referring customer and the new customer. This way, both parties benefit from the referral.
- Incorporate referrals into your loyalty tiers. As customers refer more people, they progress through these tiers, unlocking higher-value rewards or exclusive benefits.
Whichever strategy you choose, the most important thing is to make it as easy as possible for your customers to make referrals. To support your brand advocates, allow them to refer friends with unique URLs delivered via email or SMS. This makes it really quick and simple for them to forward the link with just a touch of a button.
In this example, Hat Heaven makes it clear that the referral process is fast and simple with the ‘Copy, Click, Share’ messaging. They reward the referrer with loyalty points and the new customer with money off, so everyone benefits from the exchange.
To get even more buy-in from your advocates, set up an automated SMS encouraging your customers who leave positive reviews (a great sign of a brand advocate) to refer friends in exchange for loyalty points. If your customers don’t know about the perks of making a referral, then it’s unlikely they’ll make one, so prioritise sending out communications that will encourage them to recommend to a friend.
Bonus: Treat your SMS subscribers like VIPs
Even if a customer hasn’t joined your loyalty programme yet, you can use your SMS list to support loyalty. 80% of UK shoppers who are subscribed to a brand’s SMS programme are likely to make a purchase (and that number is similar across the globe), so treating your SMS subscribers like VIPs is a valuable way to nurture that relationship, even without a formal programme. In fact, VIP perks and discounts are the top reason UK consumers subscribe to SMS.
Consider dropping your SMS subscribers early access, bespoke offers, or discounts—a strategy apparel brand Monsoon uses to help customers feel special and to drive sales.
Next Steps
Whether you’re just starting to build out your loyalty programme or you’re ready to take it to the next level, speak to an SMS specialist and customer loyalty expert to make sure you’re getting the most out of your loyalty strategy.
About Attentive
Attentive empowers the most innovative brands to create meaningful interactions through personalised text messaging.
Attentive® is the leader in conversational commerce, reinventing business to consumer communication. Our SMS-first software platform helps everyone from entrepreneurs to enterprises strengthen relationships with their consumers in a new way. Through two-way, real-time, personalised communications, we drive billions in e-commerce revenue and over 8,000 leading brands like Rebecca Minkoff, Urban Outfitters, Steve Madden, and Charlotte Tilbury rely on Attentive to deliver powerful commerce experiences.
To learn how to get started with our free trial for qualified brands, request a demo to speak with one of our SMS marketing specialists.
About LoyaltyLion
LoyaltyLion is a data-driven loyalty and engagement platform, powering sustainable growth for over 10,000 ecommerce businesses around the world. Use LoyaltyLion to create a loyalty program that goes beyond points and rewards, driving greater customer lifetime value and more cost-effective acquisition through better customer relationships.
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