10 min read

Loyalty Program – Challenges, Solutions and Results

Written by Andriy Boychuk
10 min read

Back in early 2020, one of our clients implemented a loyalty program at his store.

When we started working on the project, our main focus was building fundamental email automations (customer lifecycle flows) for the customer, so we didn’t pay much attention to the client’s loyalty program.

After a few months, we proposed to take a look at the current performance of the loyalty program to see how we could improve it.

The Results

Before you decide if you want to continue reading, let me show you the numbers we were able to achieve after doing the work described below.

Result #1 – CLV and Retention

This chart compares the loyalty program members with non-members. As you can see, all metrics are much better for those customers who are part of the loyalty program.

Result #2 – Membership

Doubled the number of loyalty members in less than 3 months.

Result #3 – Revenue

After optimizing the loyalty program and building email marketing funnels around it, the program started earning an additional $15,000+ per month, which was attributed to emails only.

Observations

The things we found we could optimize:

  • There was no clear way for customers to understand how many points they had. They could log into the system and check, but it wasn’t user-friendly
  • Minimal awareness of the brand loyalty program
  • No explanation of how to use the program and what to do to enjoy its benefits

Solutions

Below I will outline what we did in the sequence.

Solution #1 – Quick Win

To kickstart our project, we decided to create an automation that would send each member a points statement every month.

This way, each member would know exactly how many points they had. Besides, this was a meaningful and relevant touchpoint with the customer.

Then we went one step further with our automation and split it into two paths.

In both emails, we told the customers how many points they had, but the message around the call to action was different.

If they had the minimum to redeem their points, the call-to-action was to redeem it. And if they didn’t have the minimum, we encouraged them to learn more ways to earn more points.

When we set up those two emails, they started generating an additional $4,000+ per month.

Solution #2 – The Landing Page

Our client used Smile.io as their loyalty program platform.

If you want to learn how to use Smile.io to boost your customer lifetime value, listen to our podcast episode with Tim Peckover, Senior Manager of Marketing & Community at Smile.io.

We love working with Smile.io, but they have a few cons.

One of them is not having a dedicated landing page where you can explain how the program works and have a clear call-to-action for the customers.

Landing pages aren’t our expertise, but the client didn’t have anyone on their team to build one for them, so we did, as we always go above and beyond. It is actually one of our company’s values.

We contacted Smile.io and asked them for a recommendation on landing page layouts. They shared with us their Pinterest board with great examples. You can check the loyalty program landing pages here.

The landing page structure was the following:

  • Hero Image + Title
  • Brief description of the loyalty program + call-to-action to join
  • Explanation on how you can earn points
  • Explanation on how you can spend points
  • Explanation of the referral program
  • Explanation of the VIP program
  • Recap summary of the loyalty program + call-to-action to join

*** The landing page snapshot above is only for example purposes. We didn’t work with any of those clients.

The landing page was step one.

The next step was to promote the page. So we started adding links to the landing page in the following places:

  • Top navigation menu bar
  • Footer of the website
  • Marketing emails

The result? We doubled the number of subscribers due to this kind of awareness. See the numbers for the previous 2 quarters and for the last one.

Solutions #3 – The Funnels

We built 3 email marketing funnels for the loyalty program.

The first funnel we described in Solution #1. It was the automatic points balance statement sent via email.

The second funnel we focused on converting non-members to loyalty members.

We had 4 emails where we encouraged non-members to join by explaining how the program works and all the benefits. And the final 4th email had a survey to understand why they weren’t joining. This way we could improve the program down the line.

The third funnel was just to improve the loyalty member journey by thanking them for joining and by explaining again how different aspects of the program work.

The result? An additional $15,000 per month were attributed to those 3 email sequences.

Also, you can watch the video below where I go into greater detail explaining the program.

Should you optimize a loyalty program?

As you can see, the loyalty program members are more likely to buy more from you, spend more money with your brand and stay longer.

So if you’re looking to improve metrics like customer lifetime value, customer loyalty, and average order value, optimizing you loyalty program might be just the solution for you.

Note from Smile.io

Our friend from Smile.io, Tim Peckover, sent over some case study information specifically on how working with Smile can help improve LTV. This info is from him directly, but wanted to share in case any of your clients are thinking about Smile and needed some more data to make a final decision.

Stats
On average, based on our own customer data:

  • Repeat Purchase Rate for loyalty members is 2.5x higher than non-members on average
  • Purchase Frequency is 32% higher for loyalty members vs non-members on average
  • Average Order Value is 12.4% higher for loyalty members vs non-members on average

Case Studies:

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