We've all heard the saying that relationships take work. And while this line is often mentioned in the context of personal relationships, it also applies to brands and customers. Much like everyday relationships—which require people to invest time and effort—retailers also need to cultivate strong connections with customers and drive loyalty.
This is why having a loyalty program can be such a game-changer. When used properly, loyalty programs enable retailers to keep their brand at the top of customers' minds, so they keep coming back.
And who better to share insights about effective loyalty programs than the retailers who've seen success firsthand?
Marsello and Klaviyo recently held a panel discussion featuring Olivia Parker, Marketing Manager at Serafina, and Jordan Hepburn, Owner at Hobbytech Toys.
Serafina and Hobbytech Toys have both found success in their loyalty programs, each leveraging different strategies that align with their respective customer bases and business models.
Take a look at what they had to say.
About Serafina and Hobbytech Toys
First things first—let's get to know our retailers.
Serafina is a women's clothing brand geared towards middle-aged women. It's known for its elevated, everyday looks. Olivia says that while ecommerce is the brand's primary network, the brand also has a solid offline presence with seven stores in South Australia.
Serafina's loyalty program is critical to the brand's marketing strategy. Serafina releases new collections frequently, and its loyalty initiatives play a significant role in encouraging repeat purchases.
"We are a fast fashion brand, so we launch collections every month...loyalty is super important to us," says Olivia.
HobbyTech Toys is a mass-market hobby store that sells products like radio-controlled cars and model kits. The company has both a physical shop and an online store. HobbyTech Toys caters to passionate hobbyists looking for personalized advice and services for their projects.
Jordan emphasizes that customer retention is vital in their niche market, where the audience is relatively limited but highly engaged. HobbyTech Toys' loyalty program incentivizes frequent purchases and keeps customers returning for the latest products and expert guidance.
As Jordan puts it, "For us, competing in a fairly niche industry where not everybody is a hobbyist... our retention is everything."
When is someone considered a loyal customer? (Hint: It depends on the business)
Watch the full panel discussion here
There's no one-size-fits-all definition of a loyal customer, as this would depend on your business.
Over at HobbyTech Toys, a loyal customer is defined as someone who shops with the brand more than three times a month.
"Our industry is full of consumable items like glues, paints, and bits and pieces that customers use all the time and run out of all the time. So we just use the metric on how many times they shop with us," says Jordan. "Three or more times a month, we define them as a very loyal customer to us."
Meanwhile, Serafina views loyal customers as those who return multiple times throughout the year, aligning with their seasonal collection drops.
"We're very much seasonal shoppers at Serafina, so we find that people do their big shops at the start of the season. For us, loyalty is anything between four to six times a year," explains Olivia.
This goes to show that loyalty looks different depending on the industry and shopping behaviors. When determining your own definition of customer loyalty, be sure to align it with your customers' buying patterns and the nature of your products or services.
Loyalty program structure
Serafina and HobbyTech Toys use points-based rewards where customers earn one point for each dollar spent. Customers can also earn points for non-purchase activities, including referrals, social media shares, product reviews, and more.
Members of Serafina's program earn $10 for every 200 points, which they can redeem on their next purchase. This approach encourages them to make repeat purchases while feeling rewarded for their ongoing loyalty.
"Our clothing is that middle-range price... it kind of tips them over to purchase a little bit more because they get more rewards as they spend more," explains Olivia.
HobbyTech Toys, on the other hand, rewards customers with $5 off for every 500 points earned. The brand also emphasizes urgency with its incentives by offering a $10 referral reward that must be used within a set timeframe. In doing so, they motivate quicker conversions and keep customers engaged.
Loyalty initiatives that positively impact customer behavior
How do Serafina and HobbyTech Toys encourage spending and earning points? Well, they use two key communication channels—email and SMS—to create personalized, timely touchpoints that drive action.
Let's take a closer look at their strategies.
Win-back flows coupled with free shipping
According to Olivia, one of Serafina's most successful flows is the win-back flow, which re-engages customers who have fallen outside their typical purchasing cycle.
"We have a purchase cycle of 60 days on average with our customers, and that's what we classify as someone loyal. So we have a win-back flow that triggers after 90 days if they haven't purchased," she remarks.
Interestingly, Serafina doesn't offer huge discounts to tempt customers to make a purchase. Instead, the brand focuses on personalized product recommendations that resonate with the customer's previous shopping experience.
"Within this flow, we don't put any incentives in there. It's more personalization, putting in products similar to what they previously purchased. So we make them feel special that it's not just some generic email."
That said, Serafina's customers enjoy free shipping with their orders, which works with the company's margins and is a valuable perk that doesn't erode profitability.
"Free shipping works really well for us. We do have a high free shipping threshold already, and our product pricing can allow for that. It doesn't hit the bottom line too hard at all. So I think it depends on your business and your profit margins."
Automated post-purchase emails with personalized recommendations
HobbyTech Toys has a slightly different approach. According to Jordan, the company's most successful email flows are the post-purchase emails that keep the conversation going and nudge shoppers toward their next purchase.
"Our most successful ones are our post-purchase flows telling customers how many points they've earned from their last order. It's got some tailored recommendations at the bottom of that email on other products they may be interested in."
Jordan continues, "Then, a few days after that happens, we send them a product review request so they can tell us about that product—if there's any issues with it or if they're happy with their purchase. We've found that those two automations and flows are our most productive and profitable ones because we have a very high conversion rate from them while the customers are still engaged in that first purchase."
He also acknowledges that customer behavior in their industry is different from that of other retail sectors, which impacts their approach to retention.
"Our customers' purchase frequency is a lot higher than Serafina's. We generally find that customers shop between three and eight times a month with us, so it's a bit of a different industry."
Being more targeted with SMS for greater impact
Serafina and HobbyTech Toys also leverage SMS marketing. Both brands recognize the power of SMS but are cautious about overusing it. Olivia and Jordan agree it's best to keep SMS communications more selective and purposeful.
Serafina, for example, sends SMS campaigns once a month, which is a more restrained approach than emails, which they send 2-3 times a month.
"SMS is primarily around when we have key sales or promotions going on. We find a massive uptick in sales when we do SMS," says Olivia.
"We tested SMS once a month—whether it be a new product drop or promotion—and we found that we had a quite high unsubscribe rate. I think customers just want to know the key things when it comes to SMS."
"Customers almost expect to have two or three emails hit their inbox from a brand, whereas with SMS, they get a little bit more frustrated, and they don't want to be spammed," she adds.
Jordan agrees and says that they've had similar experiences with SMS frequency.
"We use SMS for flash sales and quick in-and-out events that we need to push across the line. But we do find a lot of unsubscribes from it. We get a much higher conversion rate with emails that are very targeted, specific, and full of information relevant to customers' previous purchases or interests. So we use both tools but for different purposes."
Parting advice from our retail experts
When asked what advice she would give to other retailers, Olivia's parting words were about investing the time to properly set up a loyalty program. While it takes some effort at first, the long-term payoff is well worth it.
"Loyalty marketing has been game-changing for our business here at Serafina. The initial part is time-consuming and getting it off the ground. But we've been doing this for two years now—this rewards point system with our in-store and online—and it's been so seamless. It's something that runs in the background. It's always working and happening, and customers love it."
Jordan weighs in and advises brands to keep their program simple, especially in the beginning.
"Don't come up with any complicated terms and conditions to be in the program. Don't make your points earning complicated. Keep it as simple as you can so it's easy for everybody to understand."
And, of course, strive to market the heck out of your loyalty program.
"We found that once we ran a few fairly aggressive social media campaigns about our rewards program, as well as a lot of posters and branding in-store about what the customers gain from it, that's when it really started to kick off," Jordan says. "People were coming to check out in the store and actually saying, 'Hey, I want to be part of the rewards program,' which is great for us."
Final words
When thoughtfully designed and effectively marketed, loyalty programs can do wonders for your customer relationships. The key is to understand your shoppers, provide value, and get your timing right.
You should also automate your efforts to scale your impact without losing that personal touch. Once you nail your strategy and automation, you'll find that loyal customers stick around longer and spend more—while you spend less.
Take it from Jordan, who says, "Maintaining that customer, no matter what we have to do, is the cheapest thing we can do in business."
Ready to see these results for yourself? Explore how Marsello can help you build a loyalty program that keeps your customers coming back for more.
Get advice from a loyalty expert.
Read more: 7 Steps To Building A Profitable Loyalty & Rewards Program
