Loyalty is everything. In an increasingly competitive ecommerce market, brands are constantly vying for customer loyalty, for good reason: loyal customers are often the most profitable. 

Plus, one of the best ways to tap into earned media (like word-of-mouth advertising, which most consumers trust above other advertising methods) is through—you guessed it—stronger customer loyalty. 

Perhaps the most common way businesses try to foster brand loyalty is through a points program. However, if companies simply provide a cut-and-dry rewards program and call it a day (as opposed to a spend-based loyalty program or VIP program), it can make customers feel unvalued or not like VIPs. 

In addition, if a program is solely about the points, it may fail to differentiate itself from other more competitive programs in the market. 

Industry data shows that just 18% of rewards program members actively engage with all the programs they're a member of, showing how some rewards programs may offer too little value to the customer. Oof. 

If you want to level up your customer loyalty initiatives beyond a points program, we've put together ten tips that can help.

Let's get started!

1. Set up email and SMS automations focused on bringing customers back

Email and SMS marketing are great ways to increase customer loyalty, as you can reach customers directly through their inboxes and mobile devices.

For best results, send triggered messages based on certain behaviors or actions your customers take. For example, you could send a message to a customer who hasn't made a purchase in a set amount of time or provide a voucher or discount as a way to say thank you after someone has made their first purchase. 

Pinjarra Bakery is an excellent example of a business putting email and SMS marketing to good use. The company uses Marsello to power various campaigns that entice people to come in.

“We send out an SMS blast to our loyal customers first or our loyalty customers first giving them first access to come in and try the product before we release it to the public,” Daniel explains. “And of course, we conveniently time the blast to go out around lunchtime so people are probably getting hungry that time of the day and so far the results have been great.”

Another idea is to reward your customers' birthdays. You could track birthday purchases and the rate of redemption—all of which is valuable data that can be leveraged for more tailored marketing down the road.

Easy-to-implement options include sending a one-time special discount or a freebie via text or email. Just make sure to use unique codes to track the effectiveness of your automations.

2. Setting up targeted segments

Did you know that the average email open rate is just 21.5%? To make your emails more relevant, segment subscribers into different groups or categories based on criteria like location, age, or behavior. By doing so, you can better cater to each segment through the content and deals you offer, intrinsically creating more value for your customers. 

Oh, and as a pro tip, consider using your subject lines to gauge interest in new products and themes you're considering offering.

3. Foster a strong community incidental to your brand

A brand community, when done right, is a way to rally together your most loyal customers or people who are the most interested in what you have to offer. Communities bring people together, which drives loyalty through shared experiences, meaningful connections, and a sense of belonging.

Marsello customer Pace Athletic is a master at community-building. The company has a run club that includes social jogs for all fitness levels. These run events end at local pubs where members can socialize, relax, and build friendships over a meal or drinks.

See if you can implement similar initiatives in your business. If you run a game shop, you could consider running a monthly board game night at your location. Brewery? Maybe a recurring beer tasting event or a pub quiz. Whether you want to keep it casual or more formal, brand communities are a great way to tap into brand loyalty and customer advocacy.

4. Offer exclusive access and early releases

Never underestimate the power of exclusivity. By fostering a sense of unique value or desirability—either by offering limited availability or exclusive access—brands can tap into the age-old desire of customers wanting to get something that's hard-to-get. 

You can use this to your advantage by targeting your top spenders or frequent purchasers and creating a segmented campaign. Reward them with access to exclusive events, pre-sale access to limited edition items, or other similar events. 

Take, for instance, Nordstrom, which gives members of The Nordy Club (the company's loyalty program) early access and extra discounts at sales events.

5. Start a referral program

To start things off, assign each consumer a unique referral code. Then, when they share your business with their friends, you can see if a purchase or subscription was made through the code and offer the customer (and maybe even the referred person) a reward. We recommend offering rewards that aren't point-based, like a free product or exclusive discount.

Also, make it easy to refer others: consider including a template with their unique code that customers can copy and paste. By reducing the friction around referrals, you'll make it easier for your brand to harness the power of earned media.

6. Provide valuable content and resources

Another great way to build customer loyalty is by creating content that's both informative and helpful for your customers: all with your own branding, of course. 

Let's say you run a makeup or beauty company: you could do TikTok or Instagram user-generated reviews of your products, do tutorials on how to apply certain products, or make a Q&A video about frequently asked questions. 

When you offer tips, guides, and tutorials on topics your audience cares about, you position your company as an expert and drive brand awareness by playing the long game.

7. Collect customer feedback

The best way to improve and understand customer satisfaction is through feedback, and what better moment to get feedback than right after a purchase? You can consider offering a small perk like free shipping on their next order as a small incentive, but what's crucial is to make it easy for your customers to provide feedback and to ensure they don't feel pressured into doing so. 

Marsello's customer feedback capabilities allow shoppers to provide input with just a few clicks, so the experience is effortless.

Check out this example from Madame Fancy Pants, which uses Marsello's customer feedback capabilities to create a simple, visually appealing survey so customers can quickly rate their shopping experience.

Already have customer feedback? Be sure to act on it to improve your retention strategies. And don't forget to proactively inform your customers about any changes and updates you've made so they feel heard and seen.

8. Create a customer-centric culture

Improving customer loyalty isn't just about what you put out there—it's very much an inside job. The people in your business play a crucial role in fostering customer loyalty, so you need to instill the value of customer-centricity in your teams. 

You can do this by providing ongoing training and development focused on customer service to keep folks at the top of their customer support game. 

A great example of this in action comes from Zappos, which has built a reputation for exceptional customer service. The company provides extensive training for their employees, including a four-week program that emphasizes the importance of customer satisfaction. This commitment to training has helped Zappos achieve a high level of customer loyalty and a strong brand reputation.

Another example is Pace Athletic, who run a regular running club for their community. Why we love it? Pace Athletic live and breathe what they do - a running club is a natural extension of their brand, and a way to connect on a deeper level with their customers and followers. 

The Pace team don't organize a running club to generate sales (at least not directly). But it does drive brand awareness and sales as a result. When their community build deeper relationships with the Pace team, they want to come in-store and ask for the staff's recommendations, suggestions and pointers. They want to support their local business, and the people behind it.

If you are passionate about what your business sells and what you represent, building community will come relatively easily. But it does take time and requires a commitment, so don't be disheartened if you don't see the revenue impact right away.

9. Invest in unique products and services

People stick with retailers and restaurants that consistently provide products and services they won't find elsewhere. So, strive to deliver unique and high-quality offerings to all of your guests. 

If you're in retail, this can come in the form of trendy fashion or homeware products that enhance your customers' lives. If you're a restaurant, this could mean offering exclusive and innovative dishes, sourcing locally grown and fresh ingredients, or creating a unique dining experience with exceptional ambiance.

When you do this consistently, you build a loyal customer base and differentiate yourself from the competition.

10. Implement corporate social responsibility (CSR) initiatives

Doing good is good for business. Industry data shows that consumers are more likely to choose brands that promote CSR aspects like sustainability. According to Neilsen, "a whopping 81% of respondents said that it's extremely or very important that companies implement programs to improve the environment. When it comes to action, 73% said they would either definitely or probably change their consumption habits to reduce their impact on the environment."

To that end, it may make sense for your business to develop sustainability programs that focus on reducing environmental impact. This could include minimizing waste, using renewable energy, and sourcing sustainable materials.

Of course, CSR isn't just about sustainability. Social responsibility also encompasses societal issues like fair labor and community. So if these values align more with your brand, start exploring ways to support social causes. For instance, the brand TOMS partners with non-profit organizations that work on various societal issues, including access to mental health resources, community rehabilitation, and education.

Before you begin...

To ensure that your customer loyalty approaches are paying off, you must track key metrics regularly. Otherwise, you run the risk of investing significant time and money for no result. While you may not need to track all of the data points below, familiarize yourself with them and check in with your marketing team to determine which ones are the best for your organization. 

• Net Promoter Score (NPS): This measures customer satisfaction and loyalty based on how likely customers would recommend a product/service to others on a scale of 1-10. Detractors are 0-6, while Promoters are 9-10. A score over 50 is generally good, while above 70 is great.
• Customer Retention Rate: The rate at which your customers stay with you over a specific period, which reflects the effectiveness of your loyalty-building efforts. Make sure you balance this with customer acquisition strategies.
• Customer Lifetime Value (CLV): This is an indication of the total revenue expected from a customer over their entire relationship with a brand. It's a great way to identify more valuable customers and assess the long-term value of customer loyalty programs.
• Repeat Purchase Rate: The proportion of customers who make repeat purchases, which indicates ongoing customer engagement and loyalty. Customers with a high RPR should be targeted when launching new products or services.
• Customer Satisfaction Score (CSAT): This provides immediate feedback on customer experience and loyalty; it's the average score given when you ask customers how happy/satisfied they were with an experience.

While this isn't an exhaustive list, tracking some (or all!) of the above metrics will put you well on your way to quantitatively understanding how your brand loyalty efforts are paying off.

Final words

We've covered a lot of ground looking at the top ways your business can foster customer loyalty without needing a points-based program.

While you don't need to implement all of these at the same time, we recommend trialing out at least a couple of these methods and seeing what sticks. Most importantly, this shouldn't be a "set it and forget it" approach. You need to stay attuned to the feedback received and stay in the know on industry best practices. This way, you'll be ahead of the curve and continually improve customer loyalty. 

If you're looking to create an omnichannel loyalty program that offers real value, Marsello has you covered.  From SMS and email marketing to loyalty and referral programs, Marsello can help you from start to finish.

Speak to an expert today.

Need help? Get advice from a loyalty expert and start driving repeat sales.

Read more: 7 Steps To Building A Profitable Loyalty & Rewards Program

Shoppers are no longer defined to a single channel. They bounce between in-store visits, online shopping, social media storefronts, and more — and they expect brands to meet them wherever they are.

When consumers have the freedom and flexibility to switch selling channels on a whim, data-driven marketing becomes paramount. Leveraging data to understand customer behavior and what is driving conversions isn’t just a competitive advantage; it’s essential to grow your business and rein in spiralling acquisition costs.

That’s why building a unified view of your customer — who they are, where they’re buying, and how often — is at the heart of successful multi-channel selling. 

In this blog, we’re diving into how you can do exactly that.

What is multi-channel selling?

Multi-channel selling is when businesses utilize multiple selling platforms to extend their brand’s reach and enhance sales opportunities. 

Multichannel selling increases the number of touchpoints available to reach and convert, giving your brand more visibility in the marketplace. In sum, expanding your business’s presence into new channels ensures you don’t hit a ceiling and find yourself struggling to acquire customers in the long term.

Popular channels for multi-channel selling include online marketplaces (Amazon, Etsy, eBay), physical stores, eCommerce websites, social media platforms (TikTok, Instagram), mobile apps, and wholesale partnerships.

A successful multichannel sales strategy requires businesses to provide a holistic, consistent customer experience across sales channels.

To achieve this, retailers are constantly trying to seamlessly integrate our operational silos — eCommerce platforms, inventory software, order management, loyalty management, customer data, and more.

The goal? By unifying all these channels, retailers have access to the whole data story. This gives them the insight they need to build out a comprehensive multichannel strategy.

Leveraging customer data for effective marketing

Customer data is at the core of any effective multichannel marketing strategy.

Systematically gathering customer data from different platforms and touchpoints in the shopping journey enables you to zero-in on customer behavior, demographics, and preferences. This is the first step to aligning your brand messaging across platforms and building a cohesive brand identity that consumers can trust. 

To leverage customer data effectively, all of your sales channels — whether that be a physical retail store or an online store — need to be unified so that customer data can be collected and shared centrally. Tools such as CRM software, customer loyalty platforms, POS systems, and influencer marketing platforms can help you gather comprehensive data from every interaction in the customer journey, from brand awareness to the point of purchase and beyond. 

This allows you to build unique customer profiles that records these interactions across physical and digital channels. Note: It’s important that customers are explicitly consenting to share their data with you, to stay compliant with data privacy laws in your region.

But to get genuinely valuable insights from this data, you need to ask the right questions. Keep these questions in mind as you study your data:

Who are my best customers? It’s a small proportion of your customer base that’s responsible for the majority of your revenue. Think about how to reward that most valuable cohort with perks that will bring them back to spend more. Ideas include early access to sales or product releases, lower prices, free shipping, free samples, and priority customer support.

How many customers have I lost? Controlling customer churn is essential to keep your acquisition costs under control. Data can tell you whether the customers that are churning are new customers who aren’t making repeat purchases or long-time customers churning out after several purchases. You can view this information across selling channels to see whether losses are isolated to a single channel, like your Shopify store, or various channels.

Which customers am I at risk of losing? If it’s been a long time since purchasing or customers are no longer opening promotional emails or loyalty program updates, these are red flags that these profiles are at risk of churn.

Which channel has the highest repeat purchase cycle/average order value? Your highest-performing channel can tell you a lot about which touchpoints are resonating with your customers. For example, if your online store sees the highest average order values, consider how you can better personalize upselling and cross-selling recommendations in your brick and mortar store to capitalize on the experience of talking to in-store sales representatives.

Strategies for multi-channel selling

1. Tap into existing customer profiles

Customer profiles should form the nexus of your multichannel selling strategy. This granular customer data allows businesses to segment their target audience and tailor marketing efforts to the needs and preferences of each customer. This targeted approach ensures that marketing messages are more likely to resonate with customers, leading to higher engagement and conversion rates.

For Jordan Hepburn, manager of HobbyTech Toys, collecting a vast array of omnichannel data makes it possible to segment their customers in a variety of ways, including where purchases are made, what marketing campaigns those customers received/responded to, average order value in-person vs. shopping online, and more.

2. Optimizing for lifetime value

Customer Lifetime Value (CLV) refers to the total amount of revenue a customer relationship is expected to earn for your business. High CLV is a good indicator of customer satisfaction and loyalty, because customers are choosing to keep returning to your business over multiple sales cycles. 

Brands can increase CLV by investing in marketing and loyalty initiatives geared towards turning one-off purchases into repeat purchase behavior. This includes loyalty programs, click-and-collect options, personalized email flows, and recommending complementary products.

Upselling and downselling tactics can also simplify the shopping experience for customers. By ‘downselling’ we mean suggesting a discounted product or bundle at the checkout that offers cost savings. This prompts customers to consider the additional value on offer and boost online sales.

3. Utilizing customer databases

Tapping into databases is a straightforward way to maximize opportunities to interact with customers. It’s common for businesses to organically build vast databases throughout the sales cycle — but without actually leveraging them in a marketing or loyalty context. 

Existing databases can be used to drive repeat purchases and reach new segments you might not be aware of. Moreover, it’s a great way to showcase the size of your customer base to any potential buyer in the future.

However, it’s important that you don’t ‘over-leverage’ databases in a bid to secure more sales. If email flows or SMS have low open and engagement rates, this behavior is more likely to push customers away from purchasing. 

Monitoring metrics like open rates will help you gauge how much interest exists for new products or promotions; high open rates can signal strong interest, while low open rates may  require you to reevaluate your email strategy to avoid alienating customers.

Campaign planning and execution

Targeted campaigns help businesses capitalize on key events or periods of time when consumers are more open to hearing about promotions or new products. 

Targeted campaigns fall into two main groups: Event-based campaigns and time-based campaigns.

Event-based campaigns cover occasions such as customer birthdays, anniversaries, and product launches. Time-based campaigns focus on key holiday periods (like peak season and Easter), new seasons, or annual sales events that are highly anticipated by customers, such as Black Friday and Cyber Monday.

Using a combination of these campaigns enables you to effectively nurture potential customers and push them toward your selling channels. However, targeted campaigns mustn’t be generic excuses for communicating with your customers; they need to resonate with your target audience. 

If you’re an outdoor retailer, Memorial Day weekend is likely an important event for your customers. You can develop email nurture campaigns that target both returning customers and first-time customers. For example, you could celebrate gearing up for fun summer activities, like hiking, kayaking, cycling, and more.

Use technology to drive marketing efforts

Planning and optimizing marketing campaigns across your eCommerce store and offline channels requires a level of coordination that’s impossible to achieve manually. Fortunately, there is a range of platforms available to assist businesses with data-driven multichannel selling and marketing. 

For example, Klaviyo is an integrated marketing automation platform that enables businesses to create and manage personalized review, email, and SMS campaigns based on criteria like customer behavior and purchase history. Marsello, meanwhile, offers advanced loyalty management software to set up and manage retention-driving loyalty programs across platforms.

Automated workflows save your team valuable time and resources when managing a multichannel retail strategy. You can automate the repetitive parts of customer relationship and loyalty management, such as sending welcome emails, birthday rewards, order fulfillment and shipping updates, and more. This ensures timely, relevant communications with your wider audience, helping to build brand trust.

When combined with segmentation, this takes your multichannel marketing strategy a step further by automating the sending of communications based on criteria such as purchasing history, online + offline shopping behavior, location, and demographic information. This way, you can craft highly personalized marketing campaigns for specific groups, without the burden of having to send or schedule each message or email. 

For instance, you can use automation to follow up with a customer after purchasing a specific product listing. HobbyTech Toys has an email flow that follows up with customers after a craft knife purchase at the point where the blade needs to be replaced. Even though this is in the product description, this reminder of key product information post-purchase provides ongoing value to the customer.

Measuring and attributing success

Monitoring the success of your marketing campaigns is key to refining campaigns over time for better results. Key metrics for evaluating campaign effectiveness include:

Revenue. The total value of sales that can be attributed to a campaign is a massive indicator of how well it resonated with customers and tapped into their preferences/pain points.

Basket size. Whether a campaign successfully persuades customers to add further items to their shopping cart.

Open rates/click rates. The number of recipients who opened a campaign email or message helps to measure engagement and whether your offer resonated with different segments. For example, if 30% opened an email but just 5% clicked, it’s important to investigate how your email marketing might be falling short.

However, measurement alone doesn’t tell you what actions were taken as a result of a marketing campaign. Knowing which touchpoints are contributing to conversions is key to optimizing omnichannel selling. 

For example, adding UTMs to a campaign allows you to track first/last clicks from different campaign elements, so you can understand what’s driving engagement in real time. Assigning unique coupon codes to promotions also means you can measure how much revenue has resulted from each campaign, minus the cost and any sales/discounts that are applied.

Customer data comes to the forefront here. You can use historical data to predict customer behavior around different events or times, enabling you to tailor marketing strategies accordingly. For example, you can avoid overselling inventory during key sales events by timing email communications when stocks are high. Data like demographics, behavior, and preferences can be used to create different variations of campaigns for A/B testing, so you can find what combination of assets and messages performs the best with different segments.

Practical tips from industry experts

Rory Moss, Chief Revenue Officer at Marsello

“There are databases across each and every business that haven’t been utilized to their full extent.”

As we said earlier, your customer database provides a strong foundation for targeted marketing efforts and segmentation. However, your databases need to be in a good state of maintenance to leverage useful insights about channels like physical storefronts and even your own website. This means properly integrating marketing platforms like your loyalty management system and your POS to make sure that comprehensive insights are flowing into your database and enriching insights over time.

Jordan Hepburn, Manager at Hobby Tech Toys

“Always have more data than you think you need.”

According to Jordan, spending time and resources gathering data is key. Even if that data doesn’t have a clear application right now, it could be immensely valuable in the future, depending on what targeted campaigns you want to try. 

Jordan’s marketing calendar leverages Klaviyo for automated segmented marketing campaigns on key events, like Mother’s Day and Black Friday. Mother’s Day, for example, is only sent to men on their mailing lists. But carving out time to actually manage this data is crucial. Jordan prioritizes spending an hour per day on data analysis and campaign planning to understand the ‘wins’ and weaknesses of each campaign.

Learn from retail experts Rory and Jordan in this multi-channel marketing masterclass:

Final words

Successful multi-channel selling requires brands to have a unified understanding of their customer's behaviors, preferences, and interactions with numerous touchpoints in the shopping journey. It’s essential to gather and analyze customer data across platforms to create targeted marketing campaigns that resonate with key customer segments, fostering loyalty and driving repeat purchases.

Customer databases provide a key starting point for analyzing data and understanding what communications are likely to drive urgency to purchase. However, it’s not just about having access to data, but knowing how to leverage it to anticipate customer needs and deliver consistent experiences. Integrating eCommerce platforms, marketing automation, CRM, and loyalty management not only improves operational efficiency, but ensures seamless customer experiences across channels that build brand trust.

Customer data helps to transform marketing spend into a serious growth engine for your business and transform multi-channel selling.

Need help? Get advice from a retail marketing expert and start driving repeat sales.

Read more: 7 Steps To Building A Profitable Loyalty & Rewards Program

When set up correctly, loyalty programs are one of the best tools for customer retention. 

Every business owner knows that bringing in new customers is more expensive than encouraging repeat business from existing customers. That’s why customer loyalty programs are particularly beneficial for smaller businesses, where money is tight and building a loyal customer base is crucial. 

Successful loyalty programs spark an emotional connection that brings in repeat customers — which translates to greater revenue. 

While bigger companies tend to steal the limelight for their membership programs (e.g., Sephora’s Beauty Insider program), SMBs have cool strategies too!

This article dives into seven of the best SMB loyalty programs, showcasing innovative strategies that would hopefully inspire your initiatives. 

Whether an award-winning, family-owned bakery or a homegrown fashion label — these businesses demonstrate the power of personalized loyalty rewards, community engagement, and seamless digital experiences in cultivating brand loyalty. 

Let’s dive in.

1. Pinjarra Bakery

Pinjarra Bakery, led by the Pantaleo family, is renowned for Australia's top meat pie. It has garnered over 700 state and national accolades, making it one of WA's most decorated bakeries. With over 25 years of satisfying customers, locals and tourists equally flock to enjoy its delectable treats.

Program purpose:

The company used to have an outdated point-of-sale system when it recognized the need for a more efficient sales and marketing approach. It wanted a cloud-based solution to streamline its operations and decided that Lightspeed was the perfect choice.

The bakery also wanted to integrate its loyalty and marketing with its chosen POS. So it partnered with Marsello to integrate its rewards program seamlessly into its existing tech stack consisting of WooCommerce, Bopple, and Lightspeed (O-Series).

With the loyalty program, it hoped to gather customer feedback and purchase data to enhance the customer experience and tailor offers. It also wanted to use the data for automated marketing, such as sending $10 vouchers to encourage repeat visits from inactive customers.

Program style:

Pinjarra decided on a points-based loyalty program where customers receive 1 reward point for every dollar spent. Bonus points could be earned through referrals and by sharing on social media. Members can then redeem their accumulated points for free products, exclusive benefits, and member-only special offers.

Here’s why its loyalty program succeeds:

• Pinjarra Bakery recognizes the importance of cultivating a robust database of loyal customers. A point system is simple enough for program members to understand — earn certain points and get rewards. This encourages more customers to sign up.
• It simplifies customer engagement by offering effortless QR code-based sign-ups at its locations.
• The loyalty rewards program cleverly doubles as a referral program. It’s also a useful strategy for social media marketing.
• One of the program’s main aims is to harness data from an active database. This helps to drive revenue during campaign launches.

• The program offers a delightful user experience as well. Check out the fun names of its rewards — “Magic brew to kickstart your day. Caffeine hit!” or “Pop it like it’s hot with PB pop socket - phone grip & stand.” 

Program results:

Pinjarra attained a 66% repeat purchase rate and increased revenue significantly via targeted marketing campaigns and automation, generating $100k from a single automation.

2. Scotty's Makeup & Beauty

Over four decades, Scotty’s Makeup & Beauty has been a cornerstone of the Aussie beauty industry. Established in 1980 by founder Scott Lattimer, the company introduced global makeup brands to Australia, becoming integral to various sectors including beauty salons, film, TV, and theatre.

Program purpose:

Initially, Scotty’s was searching for an effective email marketing solution. When the team learned about Marsello, they decided to set up a loyalty program as well. It aimed to establish a vibrant, involved customer database. Like Pinjarra Bakery, it also wanted to implement targeted marketing tactics tailored to customer buying behaviors and preferences.

Program style:

Currently, the Marsello app works smoothly with Scotty’s Shopify and Lightspeed (X-series) setup. The brand has chosen a tier-based or tiered loyalty program where certain loyal customers (Artistry Insiders) get exclusive access to better discounts. 

Program results:

63% of Scotty’s marketing-driven revenue originates from email campaigns. Its loyalty program efforts have also enhanced customer lifetime value and purchase frequency. Best of all — it has doubled its end-of-financial-year revenue.

3. Pace Athletic

Pace Athletic was founded by fitness enthusiasts, Will and Stu. They loved the welcoming atmosphere in surf stores and wanted to introduce the same to running stores which felt more exclusive.

Program purpose:

The co-founders knew they needed to build a loyal customer base to make running feel more inclusive. This is where Marsello came in. With its help, Pace Athletic created — what easily qualifies as — one of the best customer loyalty program examples on our list. 

Competing in a market overshadowed by major chains posed a significant challenge for the brand. Nevertheless, it cultivated a loyal customer base by prioritizing the overall experience.

Program style:

Pace Athletic implemented a simple points-based loyalty system that worked wonders. Customers earn points corresponding to the amount they spend. They can earn more points from social media engagement, referrals, etc., and redeem them for exclusive products and discounts. 

The loyalty program aims to seamlessly merge online and in-store sales data, providing a comprehensive overview of customer shopping habits. This integrated approach paves the way for personalized marketing messages and promotions based on customer data. That way, Pace Athletic can enhance customer engagement and drive more sales.

Program results:

Pace Athletic’s loyalty program account helped drive 28% of its total revenue. Because customers are highly engaged, its marketing emails yield impressive conversion rates. In fact, its email marketing campaigns contributed over 40% of its revenue, underscoring the program's impact on sales.

4. ALPHA60

Founded in 2005 by enterprising siblings Alex and Georgie Cleary, ALPHA60 has created a unique narrative since the very beginning. With a solid focus on customer happiness and an unwavering creative vision, the brand has shown that you can find success by traveling the unbeaten path.

Program purpose:

The company was determined to follow a customer-first approach and wanted the brand experience to be consistent for all shoppers. It started using Marsello along with Lightspeed (X-Series), Shopify, Wrapped, and Klaviyo to help with its loyalty program strategies.

On brand with its customer-first approach, ALPHA60 wanted to make its sales, marketing, and rewards programs more efficient. It also wanted to streamline its gift card usage across platforms and synchronize customer data between its online and in-store channels.

Program style:

The rewards program is simple. Customers earn points based on how much they spend and for engaging with the brand on social media. For every 1000 points earn, they get a $50 voucher. 

The purpose of this loyalty program is twofold. First, it excites customers at the point of sale but rewarding them for every purchase. Secondly, the program enables the brand to utilize data for segmenting customers, which then makes it easy to launch targeted campaigns.

Program results:

Every aspect of ALPHA60's business revolves around the customer and the results of its strategies speak for themselves. With a customer-centric approach, it maintains a repeat purchase rate of around 70%, surpassing the typical range of 20% to 40% considered good for retail enterprises.

5. Brandini Toffee

Brandini Toffee is a family-operated company that excels in crafting artisanal toffee through time-honored techniques and top-notch ingredients. It wanted a loyalty program compatible with its tech infrastructure and operational model, requiring seamless integration, in-store and online.

Program purpose:

The loyalty program was meant to capture purchase behaviors and preferences, grow the database, and enable tailored rewards to enhance customer retention rates. This involves integrating data across all channels to ensure a seamless omnichannel experience for Brandini’s customers.

Program style:

Using Marsello, the company set up a simple, yet effective loyalty program system. Like certain brands on this list, Brandini Toffee offers customers 1 Brandini Point for every dollar spent. Bonus points can be earned on birthdays or by completing certain actions, such as sharing on social media.

Program results:

Brandini’s revenue doubled within the first eight months of implementing Marsello. Since then, it has experienced nearly triple revenue growth from 2019 to 2023.

6. TennisGear

Started by accountant and avid tennis player Mark, TennisGear is a tennis center that offers coaching, four tennis courts, and an attached retail store. The company needed the right tech for its multi-channel businesses and wanted to make shopping easier in stores and online. With Lightspeed POS and Marsello, it manages all its data in one spot, helping create customer groups.

Program purpose:

The loyalty program serves multiple purposes. It centralizes sales data from all channels into one platform, aligns transactions with customer profiles, and fosters a seamless omnichannel experience. 

Plus, it facilitates database growth and utilizes customer interaction data to enhance product offerings and marketing strategies.

Program style:

Tennis Gear created a points-based loyalty program. Every $1 spent earns customers 1 point. Reviews, social shares, and other actions earn bonus points. All are redeemable for discounts.

Program result:

TennisGear gains full sales visibility across all channels via multi-site reports and dashboards. On implementing Marsello’s prompts for Lightspeed POS, it saw a 2.5% increase in its customer database. Additionally, Marsello's automation tools efficiently recover abandoned carts and entice lost customers to return, alongside other effective campaigns.

7. HobbyTech Toys

Based in Perth, Western Australia, Hobbytech Toys specializes in radio control products. The brand has recently broadened its inventory to encompass toys, games, Lego sets, model kits, model trains, and more. It has also prioritized improving its online presence.

Program purpose:

Year after year, the business experienced rapid growth. About two years ago, they transitioned to a new ERP, leading to a new point-of-sale system. This prompted integration with Marcello to link Lightspeed and Shopify, enhancing the omnichannel experience.

Program style:

The store recently introduced a $5 discount voucher reward system, replacing the previous 1000-point threshold for a $10 voucher. See, many regular customers weren't reaching this threshold within 12 months due to their frequent but lower-spending visits.

Program results:

The $5 reward significantly boosted redemption rates, enhancing customer satisfaction and the store's reputation. The brand has also used its omnichannel data to improve its email marketing campaigns.

Final words

All the examples mentioned above demonstrate a crucial point — customer reward programs that fit the unique needs of small businesses can work wonders. 

Special loyalty programs, easy omnichannel shopping, and automation can help grow your business and keep customers happy. That’s why if you haven’t done so yet, it’s time to launch a loyalty program that helps you reach your marketing goals. 

To learn how Marsello can help, talk to one of our experts today.

Get advice from a loyalty expert and start driving repeat sales.

Read more: 7 Steps To Building A Profitable Loyalty & Rewards Program

Fun fact: a Statista survey recently found that 70% of consumers engage longer with a brand if they are members of its free or paid loyalty programs. 

So, if you’ve ever wondered — do loyalty programs work? — the stat above proves that focusing on customer retention through loyalty programs can boost customer engagement, and potentially, your business’s bottom line.

Customer loyalty programs (aka rewards programs) are marketing strategies that incentivize repeat business by rewarding customers for continuing to engage with a brand. These programs often offer discounts, points, or exclusive perks in exchange for the customer’s loyalty. 

The end goal? To foster long-term customer relationships and increase retention rates. Effective loyalty programs can help maintain a healthy customer base.

All that being said, the success of rewards programs will vary from one retailer to the next, and if you want to find out if your loyalty efforts are working you need to track and analyze their performance. 

This article takes an in-depth look at loyalty programs, why they work, and why some initiatives are more effective than others.

Understanding customer loyalty programs

Do rewards programs work?

The short answer is it depends. 

Loyalty programs help businesses encourage repeat purchases and promote a stronger brand connection. There are several different types of loyalty programs that you can choose to implement.

Points-based loyalty programs

Point-based loyalty programs are ubiquitous among retail and hospitality sectors for their simplicity and effectiveness. Operating on a straightforward premise — spend more, earn more — these programs incentivize customer spending. 

Points earned correlate with transaction value, redeemable for rewards like discounts or exclusive perks. Customers actively strive to accumulate points, driven by the desire to redeem rewards, which enhances their brand loyalty. 

For example, LEGO-certified stores in South Africa set up an effective point-based program with Marsello’s help that works seamlessly on in-store and online purchases. Customers accrue one point for every R 1.00 spent and get another 100 bonus points on their birthday. The company provides cash-back incentives plus an exclusive LEGO gift, which shoppers can redeem in-store.

Tiered loyalty programs

Tiered loyalty rewards are all about encouraging shoppers to level up their relationship with a brand. Customers accrue points with each purchase, which then enable them to advance different loyalty levels. The higher the tier, the greater the rewards, and this motivates customers to increase their loyalty and engagement with a brand.

Sephora’s Beauty Insider Program is an excellent example of a tiered loyalty program. Not only do customers earn points on all their purchases, they can also move up different loyalty levels based on their spending. 

For example, if a customer spends $350 in a calendar year, they get promoted to the Very Important Beauty Insider (VIB) status. On spending $1000, they will be upgraded to the Rouge status with even better rewards.

Spend-based loyalty programs

In these programs, customers earn loyalty credits corresponding to their spending with tbe business. 

The beauty of spend-based programs lies in their simplicity. The structure is easy to grasp and has proven highly effective in boosting order values and decreasing churn. 

Melbourne-based fashion label and Marsello client ALPHA60 implemented a very successful and simple spend-based program. In line with a customer-centric strategy, it opted for a straightforward loyalty program — spend $1000, earn 1000 points, and receive a $50 voucher.

In the words of its Brand Strategist Kelvin Janissen, “We try not to complicate it too much and add different things in, and that really works for us. I think it’s because it’s simple for people. It’s easy for customers to understand.”

VIP programs

A VIP program is a customer loyalty strategy wherein a business offers exclusive benefits like discounts, premium product access, and special rewards to a select customer segment. Participation in this program might require payment or meeting criteria like a particular purchase amount or engagement levels.

Run by the Pantaleo family, Pinjarra Bakery is the destination for Australia's finest meat pie, boasting over 700 state and national accolades to its name. The brand implemented a VIP loyalty program offering its loyal customers exclusive content as well as early access to new products.

SMS campaigns directed at its VIP members have been especially successful. Over three months in early 2022, just two SMS campaigns brought in 15% of its total revenue. Pinjarra Bakery's loyalty program accounts for one-third of all revenue attributed to marketing efforts.

Paid loyalty programs

A paid loyalty program is similar to a VIP program where certain groups of customers get special access and exclusive products. But as its name suggests, customers pay a fee to be part of a paid program.

It can be harder to implement a paid program as it requires customers to shell out more money — on top of their purchases — to join the loyalty program. The key to making this work is to provide tremendous value to your members, so they’re happy to pay just to be a part of the program.

Amazon Prime is perhaps the most well-known paid loyalty program. For an annual fee, members get access to other Amazon services such as Prime Video and Amazon Music. By subscribing to Amazon Prime, members also get free, priority, and early deliveries for purchases from their eCommerce store.

Economics perspective on customer loyalty programs

Customer loyalty programs change how we think about rewards and prices. They alter incentive frameworks and skew perceptions of price. In traditional economics, people are seen as making rational decisions to get what they want. Loyalty programs add something new by encouraging people to keep buying, which affects how they spend their money. 

These programs take advantage of what people find useful, offering them more than just the items they buy. This fits with the economics of how people make choices, showing how loyalty programs play upon rational decisions and how people actually behave when they shop.

The psychological aspect of customer loyalty programs

When it comes to loyalty program effectiveness, economics are just the tip of the iceberg. There’s also some psychology involved.

The most effective loyalty programs touch on certain psychological aspects that can drive spending and brand loyalty. 

This quote from the Journal of Consumer Psychology describes this phenomenon quite well:

“...‘true’ loyalty must move beyond special pricing “deals” and require some underlying psychological mechanism to increase the consumer's inherent preference for or propensity toward a brand or firm.”  Henderson et al (2011)

The psychological basis of customer loyalty delves into several key drivers. 

• Reciprocity: where customers feel obliged to return a favor, this fuels loyalty 
• Social proof: drawing from the herd mentality, social proof influences choices based on others' actions 
• Commitment: stems from a sense of obligation or attachment that solidifies brand allegiance 

Its also worth noting that customer loyalty isn't solely restricted to brands. It often extends to the identity and community (i.e., the people) associated with brands. 

Signaling theory suggests that loyalty signals one's values or status. So, by participating in loyalty programs, customers not only receive rewards but also signal to others that they are reliable supporters of a particular brand, which can reflect positively on their social image.

For example, if you have a lululemon membership, this could signal that you're a fitness person who wears high-quality, stylish clothes. 

Still on the topic of psychology, there is a concept called comparison theory which asserts that loyalty arises from favorable comparisons to others. This could explain the success of paid and tier-based loyalty programs such as Mecca's Beauty Loop.

Tiers in loyalty programs like Beauty Loop allow customers to compare their benefits and status with others, encouraging them to aspire to higher tiers. As customers see the exclusive perks and recognition that come with upper tiers, they feel motivated to elevate their status by engaging more with the brand and building a higher loyalty status.

According to Henderson et al (2011), the three key pillars of a successful loyalty program are:

1. Assigning status to consumers based on purchase frequency/loyalty: For example, in tiered loyalty programs, brands assign a particular status to customers based on their spending. 
2. Building habits: For example, brands must encourage customers to scan their loyalty card codes in-store.  
3. Developing relationships: Personalized marketing campaigns or automation based on specific customer actions can further enhance the effectiveness of your loyalty programs

Supposing you can implement all the above, what kind of benefits can you expect from a successful loyalty program?

• First, your monthly turnover could increase significantly. Our studies show that loyalty members spend an average of 58% more than non-members. To calculate the ROI of your loyalty programs, use Marsello’s free ROI calculator. 
• Second, it can enhance your customer lifetime value and promote repeat business. 
• Finally, it can provide valuable data and insights into customer preferences and behavior. This can help you implement targeted marketing strategies that further drive turnover. 

Case in point: Four Square, a local supermarket chain in New Zealand, had a store right across the street from its competitors. The owner was under the impression that its customers were mostly 35-60-year-old women and stocked the store accordingly. 

Working with Marsello to analyze loyalty data revealed that its customer base was mostly male. This helped the brand re-merchandize the store, which boosted average transaction values almost immediately. 

Listen to this case study, and others, in this loyalty masterclass:

Final words

Loyalty programs don’t just provide direct benefits such as increased turnover and customer lifetime value but also provide invaluable data insights. If you haven’t done so yet, consider launching a loyalty program that make your customers feel like VIPs.

Need help? Get advice from a loyalty expert and start driving repeat sales.

Read more: 7 Steps To Building A Profitable Loyalty & Rewards Program

Every business owner understands it’s easier to retain an existing customer than to acquire a new one. That’s why many merchants use loyalty programs to incentivize customers to come back and spend more with them. When done right, loyalty rewards, discounts, special early access, etc. can help to drive incremental revenue and maximize your customer lifetime value (CLV).

All that being said, it’s important to remember that loyalty or reward programs are long-term undertakings. Yes, they’re super beneficial to your company, but to reap those advantages, you need to periodically evaluate your loyalty program performance. Some consider loyalty programs to be money pits — and they can be if you don’t keep track of your loyalty program ROI.

So, let’s back up a bit: return on investment (ROI) is a financial metric that evaluates how profitable an investment is. To calculate the ROI, you need to divide the net profit by the cost of the investment, and express it as a percentage. The greater the ROI, the more profitable the investment.

To get a handle on your loyalty program’s success, you need to measure its ROI. The results will help you decide if your loyalty strategy is working or not. If it’s working, you can continue what you’re doing and double-down on your initiatives. On the flip side, you can rejuvenate poorly performing loyalty programs by optimizing offers, running referral programs, or getting customer feedback.

Listen to this post instead:

How do I calculate ROI for my loyalty program?

As with any business initiative, the success of a loyalty program can be measured by its ROI. The formula to calculate it is pretty straightforward.

Return on Investment = (Total Revenue - Total Cost of Running the Loyalty Program) / Total Cost

Loyalty program ROI calculation: A real-life example

Here's an example from a merchant we have been working closely with. I'm not going to share their name, but I can share their anonymized results so you can see how we assess the impact of their loyalty program.

Challenges in measuring loyalty program ROI

The formula for calculating your loyalty program ROI is simple enough to understand. However, there are a few challenges that can make it more difficult to accurately measure your ROI.

Attributing revenue to the right sources

One of the biggest challenges lies in capturing key metrics and pulling the necessary data from various sources — such as your marketing, sales, finance, tech teams, etc. You need to make sure that you’re attributing your revenue gains to the right sources.

For example, your regular customers are your most valuable ones, with or without a rewards program. How can you be sure their value is attributed to your loyalty program?

It can also be tricky to figure out if a purchase was triggered by loyalty program benefits or if it’s just a customer’s normal buying behavior. You need to have the right tracking mechanisms in place to be able to accurately calculate a loyalty program’s ROI. 

Some of the ways to do this include using robust loyalty apps (like Marsello), discount codes, coupons, etc. to track customer behavior that can only be attributed to loyalty programs.

With Marsello, you can track the metrics like change in repeat purchase rate and increase in turnover from loyalty members, as we've done above. This will get you a much more accurate picture of your return.

It takes time to see results

Not only will you need considerable time to gather the data required to calculate the ROI, but it may also take time for your points programs to show results. Customers must first be aware of such programs, engage with them, and rack up enough points on their loyalty cards. It may take months (or more) for your loyalty program to start paying off, so you won’t know your true ROI right away. 

💡 Pro tip: Rather than committing to a 3 month trial across all your sites, commit to one site for at least 1 year (expanding to other sites if you see results earlier). Starting with fewer sites but allowing for a longer time period will give you a much better indication of the impact of the program for your business.

Metrics to consider when measuring the impact of your loyalty programs

Beyond the ROI calculation above, there are many ways you can measure the impact of loyalty programs. You can look at how they affect your revenue, customer base growth, and engagement, among other things.  

You could choose to measure success purely based on financial returns or through KPIs such as engagement rate, brand awareness, etc. Here are some of the data points you may need to track.

• Transaction volume
• Average order value
• Total revenue
• Cost of loyalty program memberships
• Marketing cost
• Purchase frequency of members and non-members

The key is to track these over time. Remember, it takes time to build loyalty, so running a successful rewards program is a marathon, not a sprint. 

And before you calculate the ROI of your loyalty program, make sure you’re clear about your business objectives. What are your specific goals? Do you want to increase revenue by a certain percentage? Reduce your marketing expenditure while boosting sales? Grow your repeat customer base?

This will be essential for setting targets for your loyalty program and understanding its impact on your bottom line.

Direct ROI of loyalty programs

Direct loyalty program ROI can come in several forms, including:

Increased sales and revenue from repeat purchases

A loyalty program can significantly contribute to a business' goal of increasing revenue and profit. According to a 2023 report by Gitnux, the likelihood of selling to a new customer is less than 20%. Conversely, this probability rises to nearly 70% for an existing customer.

By enhancing customer satisfaction, fostering brand loyalty, attracting new customers, and gathering important customer data, your loyalty program can lead to tangible financial gains. You can also make informed decisions about product development and marketing strategies, further amplifying revenue.

Ultimately, loyalty programs serve as strategic tools for driving sales, revenue growth, and long-term profitability in any business endeavor.

Just ask Scotty’s Makeup & Beauty, which was looking for an email marketing solutions provider when it came across Marsello. Very quickly, the business realized the full potential of Marsello’s tools and decided to also set up loyalty programs. This resulted in Scotty’s Makeup & Beauty unlocking new audiences, increasing its customer engagement, and doubling its revenue.

Reduced marketing costs through targeted promotions

Acquiring new customers through marketing efforts and sales outreach can be resource-intensive, consuming both time and funds. Customer acquisition costs pile up especially when leads opt for competitors.

Since loyalty programs help drive sales from existing customers, they enable your brand to mitigate the expenses linked with customer acquisition.You spend less to drive sales, which leads to a higher bottom line.

Indirect ROI of loyalty programs

Now that we’ve covered the direct ways to measure ROI, here’s a look at the indirect metrics that you may want to track.

Improved customer retention

When customers feel valued and content, they are more inclined to remain loyal and make repeat purchases. Implementing a loyalty program can significantly contribute to this effect.

For instance, imagine being a long-term participant in a supermarket’s loyalty program, accumulating rewards for discounts or free items. Such incentives foster loyalty, encouraging folks to continue supporting your brand despite alternative options.

Enhanced brand loyalty and customer satisfaction

Loyalty programs enhance customer appreciation by rewarding purchases with discounts or complimentary items, fostering a sense of value. Tailoring rewards based on individual preferences demonstrates care and enhances the shopping experience.

This helps to elevate customer satisfaction levels. Satisfied customers are more likely to return, which just goes to show the role of customer loyalty programs in enhancing overall satisfaction and fostering repeat business.

Positive word-of-mouth and referrals

Referral marketing, aka word-of-mouth marketing is a highly effective and sought-after strategy for customer acquisition. Recommendations from friends and family, along with good reviews on social media carry more weight than brand messages.

This is one of the most significant gains from loyalty programs — devoted customers become brand advocates, sharing their positive experiences and benefits received from your business. Through their advocacy, your company can gain new customers organically, without incurring any additional costs.

Data collection and insights for better business decisions

Understanding customers is crucial for business success. Rewards programs offer valuable insights into loyal customers, including their personal details and preferences. This enables businesses to enhance customer experiences and satisfaction by tailoring their services to meet individual preferences.

Bonus points if your loyalty program works across multiple channels. Going omnichannel with your loyalty efforts means you can collect data from all customer touchpoints, while providing a seamless experience no matter where or how they’re shopping.

Fashion label ALPHA60 was looking to improve its customer-first marketing efforts by providing all its customers with the same great experience. ALPHA60 brought in in-store and online sales data into Klaviyo, allowing the brand to display points balances, segment customers, and send personalized emails, no matter how customers shop.

By using Marsello for loyalty and marketing, ALPHA60 was able to attain a repeat purchase rate of 70%, wildly surpassing what is considered to be a good repeat purchase rate in the industry (between 20% and 40%).

Tools to track your metrics

Loyalty program solutions like Marsello give you a whole host of tools required to track metrics related to loyalty programs. 

The platform's built in marketing analytics capabilities can shed light on which channels and strategies yield the best results. Plus, you can track your loyalty program performance overtime, so you can improve both in the short- and long-term. 

Final words

Loyalty programs can offer substantial returns on investment for your business. The right program can enhance customer satisfaction, drive repeat purchases, and boost retention rates. It also provides valuable data and insights for informed decision-making and optimized marketing strategies. 

That’s why it’s so important to invest in the right solution AND track your return on that investment. Measuring your loyalty program ROI helps you improve, so you can continue to delight customers and keep them coming back.

Need help doing just that? Check out our ROI Calculator to see how your loyalty programs are performing or talk to an expert to discuss opportunities for revenue growth.

Get advice from a loyalty expert and start driving repeat sales.

Read more: 7 Steps To Building A Profitable Loyalty & Rewards Program

Fun fact: 20% of customers stated that rewards programs influence their choice of where to shop. 

There are clear benefits to having a loyalty program. However, there are also some hard truths: Just because it’s driving customers doesn’t mean it’s making bank. Businesses that fail to recognize they’re overspending on rewards or misjudging their importance are more likely to suffer losses. 

To create a successful loyalty program, be sure to check whether its benefits outweigh the costs right from the outset. This means taking the time to calculate loyalty points accurately and making sure that you’re valuing your program’s points in line with your business goals and targets. 

This comprehensive guide will help you determine the optimal value for loyalty points. We’ll dive into essential pricing principles, effective strategies, real-world examples, and common challenges.

By the end of this guide, you'll be able to set yourself up to achieve consistent and lucrative returns from your loyalty marketing strategy.

What are loyalty rewards?

Loyalty rewards are incentives offered by businesses to encourage and reward repeat purchases by customers. They can come in the form of:

• points
• discounts
• exclusive benefits

…all of which are designed to build and maintain a strong, loyal customer base.

Think of it this way: loyalty rewards are the currency of customer appreciation, and that’s why some of the world’s most customer-centric brands — including Starbucks, Sephora, and Amazon — invest a great deal in their loyalty and rewards initiatives. 

These companies know that loyalty programs encourage repeat purchases while nurturing relationships with their customers. 

Rewards programs also have a tangible impact on sales metrics. Some programs require reaching a specific cash or credit card spending threshold for loyalty points. This encourages higher splurging in a single transaction to increase basket size and average transaction value. 

In fact, our research shows that on average, a loyalty member spends 72% more than an anonymous shopper.

Principles of pricing rewards

Pricing customer loyalty rewards requires a balance between attraction and sustainability to ensure immediate engagement and long-term profitability. Your rewards must be enticing enough to capture attention without compromising your profit margins or undervaluing your products.

You can achieve this balance by keeping the following in mind:

Considerations when pricing rewards

To calculate loyalty points more accurately, consider the following factors when designing your program.

1. Customer Lifetime Value (CLV)

CLV is the overall expected revenue from customers throughout their engagement. Thus, it helps you determine the maximum reward program investment while maintaining profitability.  

Customers with a CLV above your average CLV indicates that they are long-term customers who are engaged and loyal. You can offer them high-value rewards, such as VIP events, limited-edition products, or loftier monetary rewards. Conversely, lower CLV shoppers can enjoy modest rewards like free shipping on certain thresholds to encourage ongoing engagement while retaining positive ROI.

2. Cost of rewards

Cost of rewards is a key metric to avoid overspending. Your total loyalty point rewards cost mustn’t exceed the incremental benefits generated by increased customer spending. 

Note: Incremental benefits don’t only mean higher sales. It can also include non-monetary benefits like increased customer retention, improved brand loyalty, and more word-of-mouth referrals.

Add the product/service, fulfillment, and administrative expenses associated with granting rewards to get your total cost of rewards. Then, compare that against the benefits to analyze the potential return on investment for different reward options.

For example, if offering a free product as a reward incurs a direct cost of $5 to your business, you should ensure this cost is more than covered by the additional spending or engagement the reward generates.

3. Competitive positioning

This factor influences your offering’s perceived value relative to competitors. If your competitors offer similar rewards at a lower price point, you may need to tweak your pricing strategy to stay competitive. Otherwise, you can justify a premium price with unique, high-quality rewards.

You can even go a step further by identifying areas where competitors fall short and strategizing to fill those gaps. Conducting market research analysis can be helpful in such a case. 

"On average, transactions made by loyalty members are worth over 60% more than anonymous transactions. Imagine even just 5% of your customer-base joins your loyalty program, and spends 60% more per transaction. Think what that would do to your bottom line."

- Rory Moss, Loyalty Expert

4. Economic conditions

Economic conditions can intensify market competition. During downturns, shoppers become more price-conscious and seek value for money. You can choose to engage in price wars or offer aggressive pricing strategies (i.e., offering higher-than-normal loyalty points) to gain customers.

Since this external factor is inevitable, you can only mitigate their effects to some extent. Leverage predictive analytics to anticipate shifts in demand and adjust your pricing like you would for competitive positioning.

5. Market demand

Responding to market demand for loyalty program rewards involves monitoring purchasing patterns, survey results, and industry trends. Insights from these activities shed light on which reward types appeal the most to your customer base.

When market demand for exclusive events is high, customers perceive these offerings as valuable and are willing to pay premium prices for them. Thus, you can charge more for experiential rewards.

Pro-tip: Market demands fluctuate. Continuously monitor your pricing strategy’s performance and adjust it as needed.

Point structuring

Customers may perceive the program as less valuable if it doesn’t meet their expectations or if the loyalty point bonus takes too long to accumulate. It can lead to decreased participation and engagement. 

Here are two ways to structure a well-designed points system that serves your (and your customers’) needs:

Point Valuation

Set a monetary value for each loyalty point. It can be a fraction of the average profit margin per transaction or your CLV. 

For instance, if each loyalty point is valued at $1.00, the program becomes straightforward and highly perceivable in terms of value, making it easy for customers to understand how much they’re earning with each transaction.

It’s best to start with a conservative point value. After monitoring customer response and performance metrics, make adjustments to obtain the optimal point value.

Point-to-spend Ratio

Specify the number of loyalty points‌ customers will earn for every dollar spent on purchases. A higher ratio encourages more frequent purchases to accrue points faster. Meanwhile, a lower ratio delays point accumulation but helps reduce program expenses. 

Industry benchmarks are a good reference point, but maintain it in line with your objectives. For instance, if the goal is to increase customer retention, opt for a higher ratio to encourage repeat purchases and ongoing engagement.

Refer to these price structuring options when deciding on the reward types you’ll offer. But before we get into these, here are more strategies to calculate loyalty points more accurately.

4 steps to sustainable rewards pricing

Follow these practical strategies to optimize your reward pricing while keeping the loyalty program compelling and aligned with your financial goals.

1. Understand cost-based pricing vs. value-based pricing

Cost-based pricing focuses on covering loyalty program expenses and guaranteeing profitability, while value-based seeks to connect rewards with perceived customer value.

Cost-based pricing calculates the direct costs associated with providing rewards. It’s a safer option for startups or small businesses with limited resources. It sets prices based on tangible costs rather than uncertain market factors or vague perceived value. 

Here’s a simplified illustration without factoring in retention rates, seasonal fluctuations, competitor strategies, and other pricing factors. 

You’re running a loyalty program, costing you $22 per individual ($15 for reward product costs, $5 for marketing expenses, and $2 for administrative overhead). If you aim for a 20% profit margin, you should be earning $27.60 per customer enrolled ($22 total cost per customer / 0.8 profit margin).

Value-based pricing, on the other hand, doesn’t focus on cost recovery. You calculate loyalty points pricing based on its impact on customer satisfaction and loyalty. It’s ideal for businesses that value brand reputation, such as luxury goods and high-end technology.

For instance, you could offer personalized services or products not available to the general public. This approach enhances their perceived value and can justify a higher points requirement, encouraging more purchases and engagement from members.

2. Incorporate customer feedback and insights from your data

Feedback lets you understand what your customers truly value. Solicit their ideas through surveys, reviews, and direct communication channels. 

In addition, data analytics can help you see exactly what works and what falls flat in your program. It tracks key metrics like CLV, redemption rates, and engagement levels. Use these insights to tweak your offerings and personalize rewards based on each customer base’s behavior and preferences.

3. Define your objectives

Your loyalty program’s objectives ensure that each reward contributes to attaining your bigger goals. Specify your target goals, whether it’s increasing customer retention or boosting sales.

Review your current reward offerings and assess how well they support these goals. Suppose your initial objective is to boost customer retention, but you notice that reward redemption rates are low. You can adjust your reward structure to include more experiential rewards or exclusive perks to pique more interest.

4. Analzye competitors and position yourself strategically in-market

Your competitors can overlook market gaps — and that’s where you come in. Study their offerings, including their reward types, pricing strategies, and program features. Recognize their shortcomings and make them your strengths.

Let’s say your findings show competitors lack flexibility in redeeming rewards. In this instance, having multiple redemption channels (e.g., online, in-store, and mobile) can help make your program stand out in a crowded market.

3 examples of successful rewards pricing structures

Check out these three brands that have captivated customers and driven business growth through their loyalty programs. Here are their real-world success stories:

American Airlines

The American Airlines AAdvantage® program offers elite status to frequent flyers with exclusive privileges such as priority boarding, systemwide upgrades, and extra baggage allowance. AAdvantage members can also earn bonus miles with partner airlines with every purchase using any Citi®/AAdvantage® Aviator® credit card.

Anyone can enroll with no annual fee, suggesting that value-based pricing can be as profitable as cost-based pricing. The AAdvantage® program’s longevity speaks volumes about its success. The increased engagement and revenue from more airline bookings and card purchases outweigh the reward costs, resulting in a favorable bottom line.

Neal's Yard Remedies

After decades of successful sales, Neal's Yard Remedies wanted to take the next step. It was time to undergo a digital transformation to offer a truly omnichannel experience. Unfortunately, their old POS was complicated to use and lacked an open API. Neal’s Yard Remedies wanted to find a POS and loyalty solution that worked seamlessly with their ecommerce platform to deliver that omnichannel experience.

Now, Neal’s Yard Remedies run an easy-to-use loyalty program across all their sales channels. It’s clear how to earn points, and there are multiple ways to earn. For a purchase, their points to spend ratio is set at 5:1 (customers earn 5 points when they spend £1). They’ve opted for a simple framework for rewards too: 500 points are worth £5.

Alpha60 

Alpha60 takes a different approach. Brand Manager Kelvin explains that Alpha60's loyalty program is about 'surprise and delight', rather than a promotional tool used to incentivize sales.

As part of the customer-first approach, ALPHA60 decided to make the loyalty program as simple as possible. Spend a thousand dollars, get a thousand points (a 1:1 points-to-spend ratio), get a $50 voucher.

“We try not to complicate it too much and add different things in, and that really works for us. I think it’s because it’s simple for people. It’s easy for customers to understand.” Kelvin believes simplicity helps customers get more invested with their points: they always know when they have a voucher ready to redeem.

Challenges in pricing rewards

The most common types of loyalty rewards include:

• Percentage-based discounts
• Fixed dollar discounts
• Free shipping
• Free products
• VIP experiences

Each ​​loyalty program reward has its cost implications. For instance, percentage-based discounts work well with price-sensitive customers or low average order values. They encourage larger purchases or more frequent visits, although they could hurt your bottom line if applied to high-value items.

If shoppers mostly have higher and varying average order values, setting fixed dollar discounts on specific thresholds or repurchase intervals can make pricing predictable.

E-commerce and online businesses benefit from free shipping because it eliminates potential barriers to online purchases. But you’ll have to set an average order value before you hand it off to your customers. Otherwise, it’ll erode your profits.

Offering free products or samples can boost product discovery and your loyalty program's perceived value. But like free shipping, the total cost shouldn't exceed the incremental revenue or engagement they generate.

VIP access or experiential rewards are an excellent option for building a loyal customer base. It helps enhance brand trust and differentiation by fostering a sense of belonging among top-tier loyalty members. To ensure profitability, only offer this reward when increased engagement and CLV can justify the expenditure of delivering such experiences.

Here’s a table to simplify your comparison:

To minimize costs while maintaining attractive rewards, don’t put all your eggs in one basket. Spread your investment across multiple reward types to target diverse audience segments. It won’t alienate customers who may not prefer a particular reward type. If you still can’t decide, talk to an expert for tailored advice.

Free Download: PDF and calculator for structuring your points and rewards

For more loyalty program optimization insights and tools, download our new PDF and calculator on pricing points and rewards. 

Notable trends in loyalty rewards

60% of brands claim experiences are indispensable for their success. Consider delivering experiential loyalty program perks they can’t get elsewhere to drive stronger brand advocacy.

Cutting-edge AI and analytics tools are another innovation that can help refine your reward pricing strategies. With online shopping, AI algorithms can track the most viewed, added to cart, and purchased products. Understand these patterns to maximize your pricing strategy on popular items.

Businesses also gather and analyze customer data in real time, urging more personalization and dynamic pricing. That way, you can streamline the redemption process with reward recommendations or one-click redemption. Implementing dynamic pricing could mean offering personalized discounts or bonuses tailored to individual customer profiles.

With so many emerging trends, it can be difficult to know where to begin. So, start with investing in the right loyalty software to harness these innovations and create highly effective reward systems.

Optimize your loyalty program today

Well-priced rewards inspire more loyal customers, reduce churn rates, secure repeat business, and differentiate your brand. All these benefits rely on how you calculate loyalty points and manage reward offerings.

With smart loyalty software like Marsello, customer-centric rewards with consistently high ROI are now more feasible than ever. Here’s our detailed guide to building a loyalty program that resonates with your audience.

Get advice from a loyalty expert and start driving repeat sales.

Read more: 7 Steps To Building A Profitable Loyalty & Rewards Program

“Is the juice worth the squeeze?”

If you’re running a small- to medium-sized business, you may be asking yourself this question when calculating how much it costs to acquire and keep your customers. For retailers – where profit margins often run thin and every customer counts, increasing the Customer Lifetime Value (CLV) is one of many levers you can pull to create loyalty and ensure repeat business.

What is Customer Lifetime Value?

Customer Lifetime Value is the metric used to calculate how much revenue or profit your business will generate during the amount of time your customer shops with you (customer lifetime). 

How do I calculate Customer Lifetime Value?

While having a clear, single answer to this question would be great, there is more than one answer on how to calculate CLV, and methods range from the most foundational to more complex calculations. 

The simplest way to measure customer lifetime value is to subtract your lifetime customer costs from lifetime customer revenue. Here’s what the formula looks like:

CLV = Lifetime Customer Revenue - Lifetime Customer Costs

For instance, if a business has a subscription service charging $100 monthly, with customers staying for 3 years, the Lifetime Customer Revenue is $3600 ($100 * 36 months). Assuming Lifetime Customer Costs are $600, the CLV is calculated as:

$3600 - $600 = $3000

This means each customer's net value to the business over their lifetime is $3000.

There are other ways to measure customer lifetime value. So if you want more in-depth information on calculating CLV, check out this article and try our Customer Lifetime Value calculator.

How do I increase Customer Lifetime Value?

After you calculate your baseline CLV, it’s time to pull the levers to increase it. Here are some tips to do just that.

1. Enhance your customers' experience

Increasing customer retention requires understanding the customer journey and making personalized recommendations. Delivering a better customer experience than your competition is a surefire way to reduce your customer churn rate and build loyalty. 

There are critical metrics to gather regarding customer satisfaction, including your Net Promoter Score (NPS). This information highlights areas of opportunity and gives your team a chance to rectify poor experiences before they become bad reviews.

In addition, personalized marketing campaigns are important to increase customer engagement. That’s why segmentation is key. There are several ways to segment customers to better direct your marketing efforts, and understanding the customer journey, pain points, checkout experience, behavior, and other customer data metrics are the foundation of your customer segments. Consider how much your customer spends, their buying patterns, engagement with social channels, and more. 

Creating a community of long-term, loyal customers who organically spread word-of-mouth referrals is an effective way to increase CLV.

Marsello customer, Pace Athletic, created their community by focusing on customer relationships, having an inclusive and welcoming environment, hosting a regular running club, and implementing a loyalty program with a referral rewards program. This strategy creates more touchpoints, listens to and incorporates customer feedback, and leverages customer loyalty programs – all of which lead to more conversions.

2. Implement cross-selling and upselling tactics

Another way to increase customer lifetime value is to point shoppers to products or services that add value to their purchases. You can do this through upselling and cross-selling. When done right, these sales tactics boost customer spending and AOV, ultimately helping you increase customer lifetime value. 

The retailer Scotty's Makeup & Beauty, for example, has a section on their product page recommending similar or complementary items. That way, when you view one of their products, you are also presented with items that enhance your purchase. 

Aside from driving additional sales, this practice improves the overall shopping experience by making it easier for customers to find and acquire everything they need in one place.

3. Create a customer loyalty program to increase Customer Lifetime Value (CLV)

Offering incentives and perks in a customer loyalty program is often successful in reducing customer attrition, boosting repeat purchase rate, and creating long-term customers. The best loyalty program for you will depend on your pricing, business type, and if you are looking for omnichannel support.

There are four main types of loyalty programs: 

• points systems
• tiered programs
• punch cards
• community-based incentives 

With points systems, customers earn points for every dollar they spend, which can be redeemed for products or services. Tiered loyalty programs are based on engagement or spending; the higher the tier, the more exclusive the reward. With punch cards, customers receive punches or stamps for purchases, with a reward once the card is filled. Community-based incentives are based on activities that help grow your brand and include activities like social sharing.

When thoughtfully created, rewards and recognition for customer loyalty can make a significant impact on your bottom line. 

"On average, transactions made by loyalty members are worth over 60% more than anonymous transactions. Imagine even just 5% of your customer-base joins your loyalty program, and spends 60% more per transaction. Think what that would do to your bottom line."

- Rory Moss, Loyalty Expert

And if you’re implementing personalized marketing efforts, personalized rewards are the next logical step. A successful rewards program often drives repeat business with exclusive offers, like VIP tiers and omnichannel support to keep your customers coming back, referring others and thus increasing their CLV.

Once your loyalty program is created, the work is far from over. You have a wealth of data at your fingertips, and using those data-driven insights to adjust your program is key. Offering rewards that resonate with your customer’s preferences and shopping behaviors is the art and science of personalized marketing campaigns and loyalty programs – and our customers see great success in this holistic approach.

Marsello customer, TennisGear, now has complete visibility into their sales across all channels through multi-site reports and easy-to-use dashboards. TennisGear experienced a 2.5% increase in their customer database soon after implementing a point of sale system that prompts staff to add customers to the loyalty program.

But the work didn’t stop there. With Marsello’s automation capabilities, TennisGear is seeing success in recovering abandoned carts and incentivizing lost customers to return and complete their purchase. Together, Marsello works with TennisGear to create a loyalty program that sets them apart from the competition and seamlessly integrates with their other systems.

"I think Marsello is the only solution that we found that had a native integration between all the systems that we are using. Now we can really easily separate our in-store and our online customers. In terms of loyalty, campaigns, and everything, it's certainly the best solution that we found," highlights TennisGear Project Manager, Declan.

4. Send strategic email marketing campaigns

Your customers receive dozens of emails, if not more, every day, and rising above the noise requires strategic planning. To save small marketing teams from being bogged down by the complexity of email marketing, content marketing, and the like, automation is key and optimization is the goal.

From the initial welcome email onboarding process to abandoned cart emails and win-back campaigns, being intentional and targeted in your communication is key. Automated emails tailored to customer behavior and buying patterns helps nurture customer relationships. 

To do this, the aforementioned segmented email campaigns based on customer shopping patterns and preferences provide a customized feel and increase open rates, engagement and then ultimately, CLV. Depending on your business, mixing up personalized recommendations with related products, offering abandoned cart discounts, providing relevant content marketing materials with insights, tips, early access, etc., all work in tandem to create a strategic marketing campaign that works for you. 

At Scott’s Makeup & Beauty Supply, their brick-and-mortar and online store marketing efforts are tracked to view where they’re having success. Their pre-built automations help recover more abandoned carts, drive repeat purchases and win back lost customers. With Marsello, they can see their email campaigns generate 63% of all revenue attributed to marketing activities, delivering on the metrics that matter.

5. Proactively collect customer feedback—and act on the insights

One of the best ways to get customers to stay with your brand is showing them that you value their input. And to do that, you need to get better at collecting — and acting — on their feedback. 

Regularly send out surveys to glean insights into customer satisfaction. Ask shoppers what they love most about your brand, whether they would recommend you to their friends, and what you can do to serve them better. 

You should then use those insights to improve your products and services. For example, when customers told the apparel retailer Klassy Network that they wanted long sleeved tops with built-in bras, the brand listened and launched those styles. 

Klassy Network sent out an email with the subject line “You Asked… We Listened,” highlighting how customer feedback directly influenced their latest product offering.

As for how to collect feedback, the best way to do it is put the process on autopilot. Use marketing automation software to send out surveys and feedback requests after each purchase.

We can see this in action in the fashion store Katie Waltman, which uses Marsello to automate feedback collection. 

After loyal customers collect points, Katie Waltman's team sends an automated email to show their points balance and asks for feedback on their purchase experience through a simple survey.

Katie Waltman's customers are eager to give feedback, with the jewelry brand receiving a 97% positive rate, especially for product quality, customer service, and value.

6. Encourage subscriptions

Subscriptions turn one-time shoppers into long-term customers, which then increases CLV. Subscriptions can also stabilize your finances, because they create reliable and predictable revenue streams.

Businesses selling consumable goods like food and supplements lend themselves well to the subscription model. If you fall into this category, you can encourage subscriptions by offering discounts when customers opt for recurring purchases.

Boba Tea Protein, a site that sells fitness supplements, does exactly that. When you’re on their product page, you'll notice the one-time purchase price of their protein powder is $47.99, but if you choose a subscription, the price drops 10% to $43.19.

This approach prods people to consider subscribing, which then boosts customer retention and increases the likelihood of generating consistent revenue over time.

7. Focus on high value customers

Segment your customers based on their purchase activity, then identify those who spend the most. From there, consider creating personalized offers, rewards, and communications specifically for them to enhance their loyalty and encourage continued high spending.

This targeted approach not only maximizes your ROI from marketing and customer service, it also strengthens brand loyalty (and CLV) among your most valuable shoppers. Ultimately, concentrating on high-value customers leads to increased revenue, higher customer satisfaction, and a more sustainable business model.

8. Educate your customers on the value of your products 

People will continue buying from you for as long as they find value in your products and services. That’s why it pays to educate your customers and show them how they can get the most out of your products. 

One brand that does this well is GoPro. They have a special section on their website called “GoPro Tips,” where they provide extensive how-to videos, tips for capturing great footage, and advice on using their cameras to the fullest, helping customers maximize the potential of their products.

Final words

At Marsello, your customer success is our success – and calculating CLV is an important metric to help determine what is working and where improvement can be made. If you’re looking to achieve business growth, you need a trusted partner and a strategy in place to get where you’re headed.

Ready to learn how Marsello can contribute to your business growth goals? Get in touch to learn more.

Join a community of 5,000+ retailers building sales with Marsello's customer loyalty software

Read more: 7 Steps To Building A Profitable Loyalty & Rewards Program

Fact: Loyal customers are some of your most reliable income sources during uncertain times. 

We can see this in action in some of the top brands in the market.

Starbucks, for example, was one of the companies that quickly recovered after the Great Recession. Despite the economic downturn, Starbucks continued to invest in its loyalty program, enhancing its value proposition by offering free refills, free Wi-Fi, and special offers.

Or consider Sephora, which launched its rewards program, Beauty Insider, in 2007, and has since expanded and diversified the program to include personalized offers, exclusive events, and early access to new products. Today, the majority of Sephora’s sales come from Beauty Insider members. 

All this to say that rewards and loyalty programs can unlock lasting customer retention and revenue.

But there’s a catch: you’ll only achieve these benefits if your loyalty program stands out in an increasingly competitive landscape. 

In today’s crowded market, consumers are bombarded with them left and right. That’s why we’re big believers in customization—tailoring your program to meet your target audience’s preferences and needs.

In this article, you’ll learn how to build a loyalty program that puts your audience first. We also discuss strategies for creating a rewarding customer experience that secures repeat business.

Importance of customer insights in developing notable loyalty programs

Guesswork often influences strategies when developing loyalty programs. So before proceeding to launching or overhauling your loyalty program, make it a point to challenge your views.

Start with a hypothesis. Let’s say you assume your customers are motivated by discounts. Consider the variables that made you think this way. Is it based on sales performance? 

Next, look at your data and analyze your sales trends. What impact do discounts really have on your sales?

Maybe you discover that discounts do work, but not as much as they used to. Poring over customer insights may show you that many of your customers favor tangible freebies, such as complimentary samples.

In this instance, you may need to discard your original hypothesis. Markets adapt, and customer preferences shift. Use your assumptions as a framework, but refer to actual insights as you tailor your loyalty program accordingly.

Loyalty expert Rory Moss talks about getting data & survey results to customize your loyalty program and appeal to higher value customers.

Benefits of insight-driven customer loyalty programs

Learning to fine-tune your customer loyalty programs directly translates to concrete benefits for your business. These include.

• Higher customer engagement. By basing loyalty programs on real insights, you can design initiatives that resonate with your customer base. They’ll feel a deeper connection with the tailored rewards and incentives. The more relevant you are, the better your customer relationships will be.
• Better resource allocation. Insight-driven loyalty programs help your marketing team manage resources. You’ll avoid spending on generic incentives that may not align with customer expectations. Instead, you can direct the resources toward more enticing initiatives, maximizing the loyalty program’s long-term impact.

Customer insights ensure program success with strategic implementation. Here’s how to leverage this data to build customer loyalty programs that stand out and connect with your target demographic.

6 steps to develop a successful customer loyalty program

From getting customers on board to measuring performance, launching and managing loyalty programs take work. Follow these 6 steps below to start and gradually increase signups and engagement levels.

1. Conduct customer interviews

Shoppers stay loyal to brands that understand them. To get to know your customer base, conduct direct surveys and interviews. Talk to a sample of 10 to 20 customers in person or on the phone, varying between regulars and one time/new customers.

Regulars are the most engaged audience with repeat purchases. Use the interview to identify what they want from a loyalty program. 

One-time/new customers are not as engaged–at least not yet. Take the interview as an opportunity to learn their preferred incentives, offers, or experiences to keep them coming back

Keep the questions consistent across both groups to get a well-rounded perspective. Here’s a set of potential questions you can ask these individuals. 

• How often do you purchase from our store?

• On a scale of 1 to 10, how likely are you to participate in our loyalty program?

• What types of rewards or perks would motivate you to join the program? (e.g., discounts, freebies, cashback promos, special offers, exclusive event access, early access to sales)

• How important is it for you to feel valued and rewarded for your loyalty to us?

• Do you prefer tiered membership systems or ​​points-based loyalty programs? (i.e., point-based voucher amount vs. bronze, silver, and gold tiers with more valuable rewards as you progress)

• How likely will you recommend us to others if we offer reward/referral programs?

• Are there any specific products or categories you’d like to see in the loyalty program rewards?

• What communication channels do you prefer to receive loyalty program updates and offers? (e.g., email, SMS, social media, in-store notifications)

• How do you typically redeem loyalty rewards or benefits? (e.g., online, in-store, mobile app)

• Would you be more likely to participate if the program offered early access to new product releases or exclusive benefits?

• Do you have any concerns or reservations about joining a loyalty membership program?

• How likely will you continue shopping at our store with vs. without a loyalty program?

• What additional features or benefits do you want to see in our loyalty program?

Regular and one-time shoppers have distinct preferences, motivations, and expectations. Engage with both ends of the spectrum to know what drives each group from a 360-degree standpoint. 

Pro-tip: Gather contact details, such as email addresses and phone numbers, should you require a follow-up.

2. Collate survey and feedback responses

You can also use surveys to get more quantitative data on your customers. The goal here is to organize and analyze customer feedback to identify recurring patterns. 

You can do it in a formal, informal, or a hybrid approach.

Formal surveys are recommended for large-scale operations. Here are the approaches to implementing this method for a more thorough understanding of survey responses.

• Use advanced software to categorize feedback systematically. For instance, you can implement customer feedback management platforms that tag and sort responses based on common themes.
• Statistical analysis. If you have the resources, consider applying statistical methods to identify patterns quantitatively. It involves frequency calculation of particular keywords or sentiments expressed by customers.

Informal surveys are best for small businesses with limited resources. They’re more qualitative in nature and require first-hand assessment to understand your customers. 

• Manual review. Evaluate customer comments, emails, or survey responses. The goal is to absorb the qualitative aspects that may be overlooked in strictly quantitative analysis.
• Key learnings. As you review feedback, jot down a few bullet points that summarize key learnings. These could be recurring themes, noteworthy suggestions, or significant areas of concern raised by customers.

You can also combine formal and informal approaches (hybrid) to maximize both methods’ strengths. Doing so balances qualitative findings with objective insights in a more accessible yet scalable manner.

3. Review and act on the data

Knowing what appeals to new and existing customers helps ensure your loyalty program aligns with your overall brand identity. It helps craft your Unique Value Proposition (UVP), which you can use to reinforce your brand message and create a cohesive experience across all touchpoints.

Review the preferences and needs you’ve discovered from feedback responses. Then be sure to offer customers enticing rewards to meet those needs. 

Take Amazon Prime’s paid loyalty program, for example. Industry data shows that 71.8% of its loyalty program members find the $99 annual pricing worth it for all the shipping, shopping, streaming, and reading perks. 

How does Amazon know this? Simple. The company actively creates, distributes, and collects online survey responses.

Not many businesses have the same resources as Amazon. But it doesn’t mean you don’t have enough data to analyze in your hands. 

Sports retailer TennisGear actively observes their database to understand customer behavior. They grow and keep it accurate through complete visibility across their sales channels and prompts that reminds staff to update or add customer information.

Maintaining a continuous feedback loop with your customers is key to creating a loyalty program that resonates. Send out regular surveys or perform ongoing database analysis to stay current with changing preferences and market trends.

Additional tip: Look at review sites and Google Reviews to draw information about what customers might appreciate seeing more in your programs.

4. Design and optimize the program based on feedback

Now that you know your rewards and incentives, optimize your program’s structure and mechanics to incentivize customers to spend more. 

Choose between non-tiered and tiered programs. Non-tiered appeals to a broad audience, whereas a tiered point system suits a diverse customer base with varying spending levels.

Balance the program’s exclusivity and inclusivity if you opt for the latter. Introduce exclusive high-value perks for top-tier loyalty cardholders (e.g., premium rewards, VIP events) and accessible rewards for those in lower tiers (e.g., birthday discounts).

Lastly, decide if your customers prefer simple or gamified types of loyalty programs. Gamification adds interactive elements but often requires more resources in terms of design, development, and ongoing management. 

In Sephora’s Beauty Insider Challenges, for instance, members must first complete a series of tasks to earn rewards. Some tasks don’t involve a purchase but require active engagement. The first challenges include checking out online, picking up orders in-store, signing up for text alerts, and trying Sephora’s in-store shade-matching tool.

If you’re still testing the waters, a straightforward loyalty program can be equally lucrative. 

Melbourne-based fashion label ALPHA60 exemplifies this with a simple earn-and-redeem model: spend a thousand dollars, earn a thousand points, and receive a $50 voucher.

ALPHA60’s Brand Strategist, Kelvin, explained that ALPHA60 customers prefer simplicity. Just by understanding this tendency led to the brand enjoying a high repeat purchase rate.

Find what works best for your audience, and consistently seek feedback for future adjustments if needed.

5. Make communication personalized wherever possible

Before you roll out the loyalty program, establish customer-centric communication channels. Identify where they prefer to receive updates and redeem rewards. Do they prefer traditional in-store redemption like punch cards or through handy technology like an app or a digital card?

If customers raise concerns or suggestions, acknowledge and address these in your response. Show that you value their input and actively strive to improve their experience.

A one-size-fits-all approach in communication may alienate customers who seek tailored interactions. Don’t lose your regulars to more attentive competitors. Pay attention to customer behavior when launching or announcing loyalty program updates.

6. Choose technology to run the loyalty program

Invest in user-friendly technology to simplify the implementation process. It’ll help your staff to adjust fast, minimizing the learning curve and likelihood of errors.

Loyalty program software like Marsello features seamless integration with ecommerce and POS systems (e.g., Shopify, WooCommerce, Bigcommerce, and Lightspeed) to leverage data analytics.

Syncing in-store and online transactions generates insights to help you deliver consistent loyalty experiences. It’s a hands-off process you can leverage to offer custom-tailored promotions, point earning, and reward redemption across all platforms.

With the right tools, tracking your loyalty program’s performance becomes easy. Take note of the key metrics and indicators to measure in the next section.

How to Measure Your Program’s Success

Define key performance indicators (KPIs) that align with your goals to gauge initial success. Some KPIs to consider are customer retention, referral rates, average order values (including credit card transactions), and customer lifetime value. These metrics measure the program’s overall contribution to your revenue stream.

Tracking KPIs is more efficient with Marsello’s dashboards and automated reporting. These tools feature real-time updates with charts, graphs, and other visual elements to interpret complex data patterns. You can also set up predefined schedules to receive detailed reports.

Invest in technology to keep your efforts on track. Let your staff focus on refining your marketing strategy rather than spending significant hours on data gathering and reporting.

FAQs

How can small businesses with limited resources effectively compete with larger companies in offering attractive loyalty programs?

Small businesses can level the playing field with larger companies by focusing on personalized experiences and leveraging community ties. Even with smaller budgets, they can create loyalty programs that resonate deeply with their local customer base by offering unique, personalized rewards and experiences that big chains cannot. Using social media and local events for promotion can also enhance visibility and engagement without significant investment.

What are the common pitfalls or challenges businesses face when implementing loyalty programs, and how can they be overcome?

Common pitfalls in implementing loyalty programs include failing to understand customer needs, overcomplicating the rewards system, and lack of promotion. Businesses can overcome these challenges by conducting thorough market research, simplifying participation processes, and using multiple channels to inform customers about the program. Continuously gathering feedback and adjusting the program based on customer preferences ensures it remains relevant and appealing.

How do businesses ensure the long-term sustainability of their loyalty programs?

Ensuring the long-term sustainability of loyalty programs requires continuous adaptation and engagement strategies. Businesses should regularly review and update their loyalty programs to keep them fresh and aligned with evolving customer expectations. Incorporating customer feedback, analyzing participation data, and staying informed about industry trends can help businesses adjust their offerings. Creating a community around the brand and offering exclusive, time-sensitive rewards can also maintain interest and participation over time.

Streamlining Loyalty Programs with Marsello

The best customer loyalty program prioritizes the customer experience. So, rather than rushing to launch your rewards or loyalty program, take time to solicit shopper insights, analyze data, design a responsive program, personalize communication, and use technology wisely.

Loyalty programs shouldn’t remain static. Keep ongoing customer engagement by regularly evaluating and updating your program.

If you’re ready to reward customers on their next purchase, start with Marsello’s free trial. Build your loyalty program today while synchronizing your omnichannel strategy.

Join a community of 5,000+ retailers building sales with Marsello's customer loyalty software

Read more: 7 Steps To Building A Profitable Loyalty & Rewards Program

Fact: social media is a major part of the lives of today’s consumers. No matter what type of business you run or who your target market is, chances are you have customers using various social apps and platforms.

Social networks are so embedded in our daily lives that people are increasingly using apps like Instagram, Facebook, and TikTok to discover — and ultimately purchase — products. This is particularly true among younger consumers. Industry data shows that 55% of social media users ages 18 to 24 have purchased something through a social channel. 

Social media is clearly a solid vehicle for sales, and if you’re active on platforms like Instagram, TikTok, and Facebook, then you’re likely attracting customers and sales through these channels.

The question is, how many of your sales are actually coming from social media?

If you find yourself shrugging your shoulders to that question, keep reading. In this post, we’ll shed light on the key steps and best practices you must take to effectively track and measure sales you’ve generated via social media. 

By the end of this post, you’ll have a better understanding of the different ways to track sales on social, and you’ll walk away with tips and tools to do it right. 

Let’s dive in.

Quick Links:

• • • Why should you implement sales tracking on social media?
    • 5 tips for tracking sales on social media
    • Start with a plan
    • Track social media sales using a special promo code
    • Use special links and UTMs
    • Ask your customers
    • Use sales tracking tools
    • Bringing it all together
    • Marsello: All your social media marketing in one place
      
      
      

Why should you implement sales tracking on social media?

As the saying goes, you can’t improve what you don’t measure. Actively implementing sales tracking on social media enables you to improve in the following ways.

You can allocate resources more effectively

Running social media accounts can take a significant amount of resources. Even if you aren’t actively spending money on ads, you and your team likely devote quite a bit of time and energy planning your posts, creating content, and publishing said content on social platforms. 

Tracking your sales enables you to hone in on activities that are driving a positive ROI, so you can focus on doing more of what works. 

That way, you can ensure you’re spending more time (and money) on sales-generating activities.

It helps you refine your strategy

In addition to enabling you budget resources more effectively, tracking your sales on social media helps improve your overall marketing strategy. 

Let’s say you post a mix of Reels, Stories, and static photos on Instagram and notice that certain types of posts are better than others at generating sales. You can use that insight to create more content that resonates with your audience. 

Measuring your social media sales can also tell you which channels are effective at generating revenue. If you find that you’re getting better results on Instagram versus TikTok, for example, then you can start prioritizing Instagram in your sales campaigns.

You’ll grow your social media presence

All of the above benefits lead to a stronger social media presence overall. When you’re able to focus your efforts on the platforms and tactics that matter, you’ll naturally connect better with your audience and gain more fans and followers.

5 tips for tracking sales on social media

Now that we’ve covered the why behind social media sales tracking, let’s look at how you can go about it. Here are a handful of tips to ensure your sales tracking efforts are successful.

1. Start with a plan

It can be tempting to just start posting straight away and seeing if any sales come through, but a haphazard approach to social media tracking could lead to missed opportunities, inaccurate data, and wasted time. 

If you want to get the most out of your efforts, you need to lay the groundwork and plan accordingly. 

Here are some of the details you need to iron out before launching your social media campaigns. 

Time period. Map out the dates and times you’ll be running your campaign. This will make it easier to attribute sales that come through via social media. 

Products and assets involved in the sale. What items will you be promoting? Do you have photos and videos of those products? Make sure you have the necessary assets ready beforehand so you can launch you campaign without a hitch. 

Type of activities. Identify the specific activities or campaigns you’ll be running. Will you be working with influencers? Are you running an exclusive sale? Is it a “new arrival” type of campaign? The right method for tracking your sales will depend on the type of initiative that you’re running. 

Social networks involved. Get clear on the social network (or networks) that you’ll be using. If you’re leveraging multiple platforms, you’ll need to tailor your efforts accordingly. 

Resources spent. It also helps to track the time and money you’ve spent on your campaigns. Doing so will enable you to measure your social media ROI and determine whether or not the campaign is worth the effort and resources spent.

2.Track social media sales using a special promo code

A good way to measure social media sales is to use a dedicated promo code. This tactic is best used when you’re running a sale or partnering with an influencer to promote your products. 

To implement this tactic, come up with a promo code that’s unique to a particular campaign or influencer and make sure the code isn’t used on other channels. These codes should be fairly easy to generate and track if you have the right ecommerce platform or marketing solution. 

Once you launch your campaign, start looking out for transactions that contain the promo codes you created and use that data to track your sales. 

We can see this in action in Lakanto Monkfruit Sweetener, a company that makes sugar-free sweets. Lakanto teams up with influencers like Nicole Cogan (@nobread on Instagram) to promote its products. 

To attribute sales generated through this partnership, a specific promo code (i.e., “NOBREAD”) is used, and Nicole’s followers will get a discount when they enter the code at checkout. Meanwhile, Lakanto can track sales that resulted from the campaign by taking note of how many people entered the promo code on its website.

Promo codes are simple and easy to use (both for customers and the merchant). Just bear in mind that these codes also have some shortcomings. 

For starters, promo codes may not always paint an accurate picture of sales. 

If someone sees your product on social media but doesn’t use the code at checkout, then your system won’t be able to properly attribute that transaction. 

In addition, if one of your brand partners decides to share their promo code outside of social media (e.g., their blog or during an in-person interaction) then this may distort the data around social media attribution. 

Also, you can only use promo codes as a tracking tool if you’re running a sales or promotion. Customers typically expect discounts when entering a code at checkout, so if you aren’t running a sale, then you can’t really use promo codes as a tracking tool.

3.Use special links and UTMs

If you’re using Google Analytics to measure your web traffic, then UTMs (Urchin Traffic Monitor) can help you see which sources or campaigns are driving traffic to your site. 

UTMs make use of parameters like website source, medium, and campaign to pinpoint where your visitors are coming from. These UTMs come in the form of special tracking codes that you attach at the end of a URL.

They look something like this:

https://www.example.com?utm_source=social-media&utm_medium=instagram&utm_campaign=holiday-products

In the example above, the source of traffic is social media, the medium is Instagram, and the campaign is holiday products. 

When you log into Google Analytics, you’ll be able to drill down on how many visitors are attributed to these parameters. 

You can generate a UTM by heading to Google’s Campaign URL Builder. Just fill out the required fields and the tool will generate the link for you. You can then use that special URL in your corresponding campaigns and then start tracking.

If you aren’t using Google Analytics, you can opt for personalized social links instead. 

Marsello enables you to create a custom “link in bio” page that you can include in your social media profiles. You can then track the number of people who clicked on the link to determine how many followers visited your site.

Links and UTMs allow you to measure page visits without the use of a promo code, so they can be helpful tracking tools when you’re not running a promotion. 

However, one limitation of UTMs and links is they only track page visits, not sales or conversions. They can tell you how many people landed on a page and where they came from, but they won’t show you how many users completed a purchase — unless you’re using a tool like Marsello to track the entire buying journey.

4. Ask your customers

You can glean social media sales intel simply by asking your customers. At the checkout page, add a form field asking shoppers where they heard about you, and then have them select from a range of options. 

From there, tally up the number of people who selected social media (or a specific social network — i.e., Instagram, TikTok, Facebook, etc.) and use that information to track your sales.

This tactic is easy to implement, but it also has some downsides. For one thing, having an extra form field on the checkout page adds friction to the buying experience and may turn off some customers. 

Additionally, some shoppers may opt to skip the question, so won’t be able to capture all the data you need.

5. Use sales tracking tools

While you can certainly track sales manually — i.e., by counting promo codes or tallying survey results by hand — these processes are cumbersome and can lead to human error and inaccurate data. 

You’re far better off measuring social media sales with tools that can automate the process. Marsello, for example, streamlines social media sales tracking by connecting your POS and ecommerce sales data with your social media accounts. 

From there, Marsello attributes a percentage of your revenue to a social media post containing a tagged product, UTM, or promo code.

Here’s how it works:

• Connect your social media accounts to your POS or ecommerce platform.
• Create posts across Instagram, Facebook and TikTok then tag your products.
• Use Marsello track and measure sales for a given time period.

Bringing it all together

You and your team likely spend a great deal of time and energy on social media, so you must ensure your efforts are put to good use. The best way to do that is to actively track your social media sales, so you can refine your efforts accordingly. 

Need help doing just that? Marsello Social provides you with tools to easily publish social media content and track sales.

Black Friday and Cyber Monday (BFCM) weekend is coming up fast (just where did 2022 go?) It’s high time for brands to begin planning for this massive, revenue-generating shopping event.

179.8 million unique shoppers shopped in-store and online during the BFCM holiday weekend in 2021, despite the disruption caused by the COVID-19 pandemic.

With 2022 seeing record rates of inflation and more cautious consumer spending, brands will need to pull out all the stops to wow customers this holiday season.

Although still associated with shoppers streaming into store locations, BFCM weekend is becoming increasingly digital and mobile-first. According to Nosto, mobile outperformed desktop at 69% versus 31% when it came to product discovery and browsing, where social media emerges as a key channel. In fact, 54% of Gen Z shoppers and 58% of Millennials say that social platforms are better than online search for finding products and brands.

In sum, a robust social media strategy is now essential for a profitable BFCM weekend.

We’ve put together a list of the top social media planning practices your brand should follow to attract and retain customers this holiday season — and how Marsello’s brand-new social media toolkit can help.

Quick Links:

• • • Use data to inform your BFCM initiatives and planning
    • Iron out the BFCM promotions you’ll be running
    • Create compelling images
    • Use a calendar to track and schedule your BFCM content
    • Keep your marketing collateral organized
    • Keep your BFCM initiatives consistent across all platforms
    • Leverage built-in social selling features
    • Final words
    • Marsello: All your BCFM marketing in one place
      
      
      

1. Use data to inform your BFCM initiatives and planning

Not sure where to begin with your social media planning? A good place to start is to look into what strategies worked for your brand last year — and what didn’t. 

Social media metrics such as engagement, impressions, click-through rate, website traffic, and conversion rate will help you to gauge the performance of previous initiatives and where you can build on this success. Likewise, learning from past mistakes, such as posting at the wrong time of day for your audience, is one of the best ways to set yourself up for a profitable BFCM period.

Using Marsello, look back on what kinds of posts generated the most sales over past campaigns.

In addition to using your own data, don’t ignore the power of industry trends. Knowing what’s hot with social media users is a great way to stay innovative and serve up the content consumers want to see. 

For example, short-form video is gaining traction across all social platforms in 2022, with 26% of social media marketers investing more in short-form video than any other content format. If your target customer belongs to the Gen Z demographic, this should definitely be in your BFCM toolkit.

2. Iron out the BFCM promotions you’ll be running

Running seasonal promotions is an essential part of BFCM, and your followers will expect you offer some compelling deals and discounts throughout the weekend. To maximize engagement with your social content, make sure you’ve planned out all the core details of your promotions, such as:

The type of content. Are you using a single image, carousel, or video to publicize your promotion?

The type of promotion. The size of the discount/offer, what products are included/excluded, etc.

Length/timing of the promotion. How long the promotion is valid and whether you might extend it to increase conversions

However, be careful not to make your social media feeds too promotion-heavy. Constantly pushing discounts over BFCM weekend can become boring and repetitive for your followers. Consider mixing up your feed with other types of content and putting aside some time to plan out your content streams. This includes promotional offers, gift inspo, and user-generated content.

Starbucks is a great example of a brand that posts a careful mix of content during and in the lead-up to BFCM. In addition to posting about their seasonal drinks range and limited-edition holiday cup promotions, its social media feeds also include user-generated content and question prompts designed to encourage engagement.

3. Create compelling images

Consumers’ newsfeeds and inboxes are being inundated by promotions and discounts during BFCM weekend, trying to persuade them to drop everything and shop right now. But don’t join the race to the bottom by choosing the steepest discount possible; focus on creating eye-catching visuals that entice consumers to stop scrolling and check out your offer.

To tap into those short attention spans, your images need to have a “wow factor” that’s pleasing to look at and primes people to explore what you have to offer.

Known for its stunning social media feeds, Anthropologie does a great job at putting its followers in the mindset of holiday shopping ahead of BFCM. This fun visual swipe post allows Anthropologie fans to “turn on” the Christmas lights at one of their flagship stores — a clear sign of more holiday-themed content to come.

4. Use a calendar to track and schedule your BFCM content

It can be tempting to post all your social media content on the fly. But while there’s room for spontaneity in your content (for example, jumping on a trend while it’s still viral) you don’t want to leave your BFCM content to chance. 

Peak season is a busy time for brands, and it’s time-consuming and stressful to plan and post content as you go. More importantly, a scattergun approach also runs the risk of missing key promotional opportunities during Thanksgiving weekend.

Using a calendar tool is a great way to maintain control over your BCFM social media planning. Marsello allows you to add individual social posts to your calendar and add relevant information such as launch dates, copy, or associated promotions, ensuring that your team always knows what’s in the pipeline.

5. Keep your marketing collateral organized

BFCM is one of the biggest revenue-producing periods of the year for retailers, so your business is likely to be using more social media collateral in the form of graphics, videos, and product photography during this period to increase engagement. 

With so much revenue on the line, it’s vital to make sure your marketing team has a system to store and organize these assets. After all, nobody wants to lose a vital photo or video right before posting!

The Marsello media library is an excellent way to keep all of your BFCM collateral in one place where it’s easily accessible to your team. The media library connects seamlessly with all major storage systems, including Google Drive and Dropbox, so you can retrieve your assets as you need them for emails, social media, and other campaigns being run by Marsello.

6. Keep your BFCM initiatives consistent across all platforms

If you’re planning on running a big promotion (or several) over BFCM weekend, it makes little sense to only publicize your offer on a single platform. To drive as much traffic as possible to your website and storefronts, all of your marketing channels — including social media, email, and even your store signage — need to be working together in harmony. 

It’s easy to say that the more channels you use, the stronger your promotional strategy will be. But it’s not quite that simple; more channels also means more time spent making sure that your messaging stays consistent. 

Here is a great example from Sephora, which successfully reinforced last year’s Cyber Monday sale across email and social media by using the same graphic and messaging:

Marsello’s campaign calendar makes it easy to achieve coordinated campaigns like Sephora’s. Social media, SMS, and email can be planned within a single dashboard to streamline your social planning and ensure consistency across channels.

7. Optimize your BFCM social media accounts for sales by leveraging built-in social selling features

Social media is no longer simply a marketing channel designed to direct shoppers to where the action takes place. Thanks to the birth of social commerce, many platforms now boast a range of tools that enable users to purchase products directly within the app.

Social commerce has a range of benefits for both shoppers and brands during BFCM. If prospective customers see a great holiday gift option, they’re going to want to move fast. By shopping directly within an app, consumers only have to tap the product tag to be taken directly to the product page and checkout. Redirecting shoppers to your ecommerce website, where they’ll need to find the product themselves and place it in their cart, takes extra time and effort and may result in them abandoning the purchase.

In addition to speeding up the checkout process, social selling makes your product catalog easy and seamless to navigate. For example, Walmart has created a range of collections in its Instagram store to address different shopper needs:.

Collections have a ton of applications for BFCM weekend. Consider catalogs such as “‘Top holiday picks for under $30”’ or “‘red-hot Black Friday deals” to optimize your sales strategy and drive consumers toward high-value merchandise.

Final words

Black Friday and Cyber Monday are among one the most important holiday shopping weekends on the calendar, and brands need to begin their social media planning early to maximize the promotional opportunities available. By following the social media planning tips above and utilizing Marsello’s social media tools, you’ll be well-placed to make your BFCM 2022 the best yet.

There’s a popular saying that you’re only as good as your last performance, and this is certainly true for retail establishments.

Because of the COVID-19 pandemic, consumers have become more discerning about what businesses they support. With more information at their fingertips than ever before, shoppers spend more time researching different options.

Google Reviews have become a crucial tool for businesses to manage their reputations online. This blog will explore how businesses can manage Google Reviews and increase discovery opportunities in the search results – and how Marsello can help!

Quick Links:

• • • What are Google Reviews?
    • Why do Google Reviews matter?
    • How can retailers collect Google reviews?
    • The right way to request a Google Review
    • How should retailers respond to positive and negative reviews?
    • Final words

What are Google Reviews?

Google Reviews is a functionality embedded within Google Maps and Google My Business where consumers can publicly post reviews for establishments they’ve visited.

The purpose of Google Reviews is two-fold. They assist businesses with building a positive reputation amongst consumers while also helping individuals find suitable establishments in their local area. More than half of shoppers say they’ve used Google to discover new businesses.

Why do Google Reviews matter?

Here are some reasons you should consider leveling up your Google Reviews initiatives.

Improving your local search ranking

Google Reviews play a critical role in determining your business’s local search ranking. Local SEO helps Google match a person’s search with relevant nearby businesses (e.g., “Italian restaurants in New York City”). Ensuring a healthy supply of positive reviews increases the odds of your business coming up high in the search results.

Consumers trust online reviews as much as personal recommendations

Research shows that 84% of consumers trust reviews as much as recommendations from family or friends – this tells us that customers really do consider social proof in their purchasing decisions.

Giving customers the opportunity to provide feedback

Customers want to feel that their experiences matter. Giving them the opportunity to share what they love about your business on a public forum shows that you genuinely care and want to receive feedback – even if it isn’t always positive.

How can retailers collect Google reviews?

Are businesses allowed to ask customers for Google Reviews?

Yes, though there are some ground rules.

Google doesn’t allow businesses to pay customers for leaving reviews or “review gate” by discouraging customers from leaving negative reviews. Furthermore, you cannot use reviews left on Google for marketing purposes on other platforms, such as social media or your website.

Here are some actionable ways that your business can collect Google Reviews:

Email and SMS automated flows

It isn’t practical for your business to manually send out review requests to individual customers. Instead, you need a tool that allows you to contact customers in bulk at a time of your choosing. 

Marsello’s email and SMS automation tool enables brands to build custom email and message flows to request reviews. Marsello customer Harry & Her send automatically triggered email campaigns coupled with the Google Reviews Manager tool to build a solid review base and, in turn, boost their credibility as a retailer. Here's what they had to say about the tool:

At the POS/checkout directly after a sale

While the “right” time to ask for a review will depend on your business, products, and customers (more on this below), striking while the iron is hot is usually the best way to get customers to leave reviews. In-store visitors have the chance to form a relationship with sales associates during the shopping experience, which can make customers more responsive to review requests. Consider speeding up the process by having a QR code at the checkout that directs customers straight to your review page.

When a sale is completed during a promotion

It’s always a good idea to ask for reviews while your brand is hosting a sales promotion. When customers have gotten a great deal from your business, they’re more likely to have a favorable impression and leave a positive Google review.

For example, if your brand runs a flash sale for 24 - 48 hours, you can set up an automation flow that sends a review request to a specific segment of customers (i.e., those who placed an order during your flash sale). By using Marsello’s customer segmentation, your business can solicit reviews from customers who are most likely to engage and give glowing feedback.

When customers join the loyalty program or progress tiers

Loyalty reward programs can act as their own form of customer segmentation. The shoppers who join your program are usually those already loyal to your brand, meaning they’re also more likely to leave reviews.

Brands have multiple opportunities to target loyalty program customers, such as when they sign up, redeem a loyalty reward, or progress to a new loyalty tier. These touchpoints are a great time to ask for a Google Review and show members that you care about their experience.

You can also take this a step further like Marsello-powered pet boutique Smack Bang by offering loyalty points in exchange for leaving a product review on the product listing itself. With custom automations, it’s easy to create an automated campaign that is triggered when customers leave a positive product review. Product reviews provide a great opportunity to encourage your customers to leave a Google Review about your business.

Promote/encourage reviews on social media

Cross-channel promotion is a critical part of collecting Google Reviews. In addition to asking customers for reviews in-person or via email and SMS, you should put out a call on your social channels asking customers to share their experiences.

It’s important to note that Google does not allow you to use reviews as advertising collateral on other platforms. But there are some less direct ways to achieve this.

Thai restaurant Chat Thai has a collection of reviews on their Instagram account created from photos and videos they have been tagged in. Consider resharing user-generated review content to steer customers towards leaving Google Reviews.

Make your Google My Business page easy to find and direct customers there

Customers won’t leave Google Reviews if your Google My Business page is difficult to find. Some of your customers may never have left a Google Review before. When making review requests via email and SMS, ensure you provide a link to your Google My Business page. Also, consider adding a review page to your website so that you can direct customers to your Google listing.

The right way to request a Google Review

We’ve gone over some of the best ways to collect Google Reviews. But when is the best time to request a review?

It can be a tricky balance to get the timing of requesting reviews right. If you leave it too long, your customer’s experience will be less fresh, which could affect the quality of their review. But asking too soon risks annoying your customer, especially if their order hasn’t arrived yet.

You should also factor in different customer segments. Some of your loyal customers may be more eager to submit reviews straightaway, while those who are new to your business may need some time before they’re ready to leave feedback.

Marsello’s SMS and email automations allow businesses to automate the process, segment customers, and ensure communications are sent at the optimum time to encourage positive reviews.

It’s also easy to combine automated campaigns with other review collection methods. For example, a restaurant can prime diners by asking them in person to leave a review and following up by sending an automated email reminder the following day.

How should retailers respond to positive and negative reviews?

Managing positive reviews is simple enough – simply thank your customer for their feedback and say you hope you’ll see them again soon. But what if their experience was less than positive?

No business wants to receive a bad review. But the most important thing to remember about Google Reviews is whatever you say (or don’t say) is there for potential customers to see. How you respond affects the customer who left the review and onlookers who make decisions based on the reviews left about your business and how you choose to respond. 

If you receive a negative review, always thank the person for their review. Take the time to investigate the issue to find out what went wrong so you can explain in your response. Most importantly, tell your customer the steps you will take to ensure this doesn’t happen again. Consider offering them a discount for their next visit to encourage them to return and see the changes you’ve made; this puts the ball back in their court and shows onlookers that you have made a serious effort to resolve the issue.

In some cases, it may help get more information from the customer. In this case, you can respond by encouraging them to tell you more about their experience. As always, it’s best to stay courteous by thanking the customer for their feedback and empathizing with them. 

Check out this example from Romano's Macaroni Grill.

Final words

Google Reviews can feel like a business’s best friend or worst enemy. Using a tool like Marsello to support your Google Review strategy enables you to streamline Review management and ensure that you’re sending the right response at the right time to foster customer loyalty.

By taking a responsive and automated approach to Google Reviews, your business can proactively enhance its reputation and build stronger relationships with customers – one review at a time.

If you’re searching for a product or service online, do you read a review or two before clicking “book” or “purchase”? If so, you aren’t alone: 93% of consumers say that online reviews influence their purchasing decisions, while 70% of people will only use a business if it has a star rating of four stars or more.

But it’s no longer enough to list a review or two on your website and call it a day; today’s customers want to see a large amount of social proof before they trust a business. In fact, 54.7% of consumers read at least four product reviews before making a purchasing decision.

So, what does this mean for businesses?

It means that you need an ongoing source of positive Google customer reviews to maintain a strong customer acquisition rate. In this post, we’re going to explain how you can get more Google reviews with ease – with a little help from Marsello.

Quick Links:

• • • Why Google business reviews are essential for any business
    • Why frequent positive reviews are essential for good SEO
    • How Google My Business reviews work
    • How to use Marsello’s Google Reviews Manager
    • How to use Google Reviews to increase brand awareness
    • Final words
      
      

Why Google business reviews are essential for any business

With a whopping 92.6% of all search queries going through Google as of June 2021, it’s no secret that Google business reviews are some of the most valuable. 

When Google is the one-stop shop for consumers searching for everything from hairdressers to restaurants, you need to ensure that you’re at the top of those search results. Otherwise, your business is practically invisible to potential customers. And if they can’t see you, they’re not going to click through to your website.

By managing Google reviews more effectively, you can make your business more visible – all thanks to something called local SEO.

Why frequent positive reviews are essential for good SEO

Local SEO focuses on optimizing a business’s online presence to assist nearby consumers in finding it more easily in search. If a consumer is showing search intent for a particular product or service, Google’s algorithm matches that search query with relevant businesses close to where the person is located.

For example, if you’re a restaurant in Manhattan, your target audience is likely to be people who are living or visiting in that area. So, if a person searches for “best restaurants in Manhattan” you want your establishment to be as high as possible in those results. 

According to Moz’s State of Local SEO Industry Report 2020, 90% of search experts believe that review activity is “moderately important” or “very important” in determining local SEO, while 78% agree that Google has become the new homepage for businesses. As such, Google reviews are a fantastic tool to boost local search presence – if you do it right.

How Google My Business reviews work

To start collecting Google reviews, you need to either claim or set up a Google My Business listing. This is a free tool offered by Google that allows businesses to manage their presence on the search engine. In addition to reviews, Google My Business listings can also include information such as:

• • • Opening hours
    • Address/Contact details
    • Menus
    • Booking widgets 
    • Photos of your establishment

It’s important to make an effort to fill out as many parts of your profile as possible, as a comprehensive listing will help to boost your local ranking. 

Check out the listing of the restaurant Chat Thai, which has a number of locations across Australia. All of Chat Thai’s Google listings are fully populated; you can view key business details and contact info, as well as photos and reviews. There’s even an “Order Online” button that lets customers order straight from Google.

Once Google My Business is set up and optimized, you’re ready to start driving review activity.

This is where Marsello’s Google Reviews feature comes in.

How to use Marsello’s Google Reviews Manager

By integrating your Google My Business account with your Marsello marketing, you can easily generate new reviews through automated email and SMS campaigns. 

Here’s how it works: connect your Google My Business account to Marsello, then enable automated email or SMS flows to encourage people to leave a review. You can customize your email flow with segmentation rules to ensure that you’re engaging the right customers. For instance, you can configure the workflow to only ask your “Best” customers for a review after they purchase. 

Note that Google Reviews workflows will only be triggered after someone places an order, so you can guarantee the authenticity of your business reviews.

Finally, it’s easy to track the success of your review automations. And when you receive a review, you can respond to your customers in-app, reward them with loyalty points to say thank you, or email the customer directly – manage reviews your way! 

Get in touch with our team to book a demo and learn more.

How to use Google Reviews to increase brand awareness

Before the web existed, businesses and hospitality establishments had to rely on being as visible as possible to attract foot traffic. Everything from flyers and store signage to branded shopping bags have been valuable tools to help businesses increase brand awareness.

This principle is no different online. Your business needs to take up as much “space” as possible to become known and recognized by as many customers as possible in such a competitive environment. 

In a time where digital marketing can feel increasingly like a pay-to-play model where only the biggest budgets see results, Google reviews offer a way for less-established businesses to level the playing field. By getting more reviews on Google, you’ll stand out over bigger but less-reviewed competitors.

How to encourage customers to leave positive reviews

It’s easy to assume that customers will shout from the rooftops when they have a stellar experience at your establishment. But this isn’t the case in reality; less than 50% of customers (47%) say they don’t post negative or positive reviews online at all.

There are a variety of reasons for this. A lot of us are busy and forget to write a review. Many businesses don’t make it easy or intuitive to leave reviews. If we’ve written reviews in the past and haven’t gotten a response, we might decide it’s not worth the effort.

By this point, you’re probably asking: How can I get more Google reviews for my business? Continue the following top tips:

Prompt for reviews after purchases with automated emails and SMS

The first step to getting customers to leave reviews? Strike while the iron is hot.

Businesses want to create balance by asking for reviews while a customer’s experience is fresh – this can be tough to coordinate if your establishment asks for reviews manually. 

Moreover, sending out individually-written emails or SMS is a massive drain on your time. To make asking for reviews as painless as possible, consider investing in marketing automation software that can handle review requests on your behalf.

Marsello’s automated email and SMS campaign tool enables businesses to send and manage review requests via a straightforward interface. Set the ideal time for your messages to go out to customers and even automate the sending of follow-up messages to give you another shot at securing positive reviews.

Make an effort to respond to customer feedback

Getting more customers to leave reviews isn’t just about how you ask for them, but how you choose to respond when you receive them. 

In fact, 89% of consumers read a business’s responses to reviews during the consideration stage. Why? Because how an establishment engages with positive and negative reviews tells potential customers a great deal about how that business treats its patrons.

Suppose a customer leaves a negative Google review and that business makes no effort to respond; this could be interpreted as the company not caring about the quality of their customer’s experience, which is a massive red flag. 

Plus, if you aren’t in the habit of replying to reviews and showing that you’re listening to feedback, what incentive do customers have to put in the effort?

Restaurant and Bar, The Monday Room, has done a great job of replying to Google reviews, even thanking customers who write more detailed reviews and provide photos:

Use positive reinforcement, but don’t bribe customers

If you’re looking to shape consumer behavior in ways that are advantageous to your business, it might seem like a good idea to offer customers a discount on their next order in exchange for leaving a positive review. However, this isn’t a good long-term strategy for most businesses. 

Too many 5-star reviews on a business listing create suspicion, with studies finding that consumers were more likely to purchase a product or service when the rating is between 4.2 to 4.5 stars. You don’t want your efforts to come across as though your business is buying reviews or deleting negative Google reviews, which can cause potential customers to doubt their authenticity and can even result in your business being penalized by Google. 

It’s much better to reward customers after leaving a review to guarantee honest feedback. For example, lifestyle and clothing boutique Harry & Her rewards customers with loyalty points if they leave 4 or 5-star reviews, but they don’t actively promote this policy on any of their marketing channels. This practice increases customer satisfaction and ensures that all positive reviews are genuine. 

The team at Harry and Her was also one of the first to test Marsello's Google Reviews Manager and they've found that Google Reviews are an undeniable source of revenue growth for their business. So much so, they're not going back! Here's what they had to say about their review process and the response from customers:

"We use Marsello's Google Reviews feature to encourage customer reviews after they buy something from one of our stores. First, we send an automated SMS; then we follow that up with an email to those who have not seen the SMS campaign. It's also been exciting to see our customers respond with so many positive reviews – we now have a 5-star average across our stores!"

Final words

Managing online reviews can feel a bit overwhelming, especially if you have a brand-new Google My Business listing and gather reviews from scratch. But it’s well worth the effort to create a streamlined outreach strategy to build social proof for your business; when you have a long list of positive customer testimonials, you’re in a much stronger position to acquire new customers.

By taking advantage of SMS and email automation to coordinate review requests and communicating how feedback enhances the customer experience, you can build a lasting Google review strategy that acquires and retains loyal customers. Marsello’s Google Reviews Manager makes this easy! Book a demo to get started today.