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10 Ways to Increase Customer Loyalty Without a Points Program

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

Francesca Nicasio

Content Strategy Manager

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.”

Limited-Time-Pinjarra-Bakery-SMS-next-to-man-eating-a-pie-1

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.

the nordy club - loyalty example

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.

Marsello-Madame-Fancy-Pants-Customizable-Feedback-Survey

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.

TOMS initiatives - loyalty examples

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.

Speak to an expert

 


 

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

    Most Popular

    Recent Articles

    10 Ways to Increase Customer Loyalty Without a Points Program

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

    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.”

    Limited-Time-Pinjarra-Bakery-SMS-next-to-man-eating-a-pie-1

    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.

    the nordy club - loyalty example

    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.

    Marsello-Madame-Fancy-Pants-Customizable-Feedback-Survey

    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.

    TOMS initiatives - loyalty examples

    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.

    Speak to an expert

     


     

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

    Why FlyBuys Is Closing in 2024: A Farewell to an Iconic Loyalty Program

    ClockIcon  READ
    The closure of FlyBuys NZ in 2024 marks the end of an era in loyalty programs. Discover the evolution of loyalty programs, the impact on consumers and...

    It’s the end of an era in New Zealand’s retail landscape. FlyBuys NZ has announced its closure, effective October 2024, leaving around 90 staff members out of work. In a recent press release, the company stated, "After careful consideration and evaluation of our current business environment, we have made the difficult decision to close FlyBuys NZ. This decision was not taken lightly, and we are deeply grateful for the support of our employees, members, and partners over the years."

    FlyBuys NZ has been a household name since its inception, pioneering the concept of loyalty programs in New Zealand. For many of us, collecting FlyBuys points was a routine part of our shopping experience, and the rewards catalog was something we eagerly browsed. However, as technology and consumer behavior have evolved, the landscape of loyalty programs has shifted significantly.

    The evolution of loyalty programs

    Loyalty programs have come a long way from the days of physical punch cards and point collection systems. The advent of digital technology has revolutionized how brands engage with their customers. Platforms like Marsello have made it easier and more cost-effective for businesses to run their own loyalty programs. These platforms offer seamless integration with existing systems, real-time data analytics, and personalized marketing capabilities. Most importantly, they allow brands to own their data.

    In the past, brands relied on third-party loyalty programs like FlyBuys, which meant they didn’t have direct access to the valuable customer data generated through these programs. Today, owning customer data is crucial. It enables businesses to make informed marketing and business decisions based on customer preferences and purchase behavior.

    The economics of loyalty programs: for consumers

    Let’s take a moment to consider the cost of loyalty from the consumer's perspective. With FlyBuys, you had to spend $25 to earn one point. To redeem a hairdryer (RRP $99NZD), which costs 340 points, you would need to spend a whopping $8,500. That’s giving you back 1% of value, after you’ve spent months or even years making transactions with FlyBuys partners. This model made sense in the early days of loyalty programs, but in today’s fast-paced retail environment, consumers are looking for more immediate and tangible rewards.

    A brand's own loyalty program usually offers more generous rewards compared to coalition programs—you’re likely to get back 3-10% (sometimes even more) in value. Think about getting your tenth coffee free: that’s an 11% discount across the 10 purchases. And you could easily achieve that in a couple of weeks.

    The economics of loyalty programs: for retailers

    A loyalty program can play a pivotal role in achieving a business's revenue and profit goals. As highlighted in a 2023 report by Gitnux, the chance of selling to a new customer is less than 20%, whereas this likelihood increases to almost 70% for an existing customer.

    In terms of the return on investment, here’s an example from a merchant Marsello has been working with (anonymised as these are real results). In this case, you’ll see the merchant saw a return of $9.22 for every $1 they spent on running the program and rewarding customers.

    Real life example (1)

    By improving customer satisfaction, building brand loyalty, attracting new customers, and collecting valuable customer data, your loyalty program can yield significant financial benefits. Additionally, it enables informed decision-making regarding product development and marketing strategies, further boosting revenue.

    In essence, loyalty programs are strategic assets that drive sales, revenue growth, and long-term profitability for any business.

    The future of loyalty programs

    As we look to the future, loyalty programs are becoming more sophisticated and data-driven. Brands want to own their customer data and leverage artificial intelligence to gain insights into customer behavior. AI can analyze vast amounts of data to predict trends, personalize marketing efforts, and improve customer experiences.

    Data-backed decision making takes a lot of time. You have to understand where to find your data, how to organize it, then how to interpret it to glean insights. For most people, this is overwhelming—they don’t even know where to begin.

    The future? All that data is a knowledge base you can tap into whenever you have a question. You can simply type or speak your question or command in plain language, and the assistant will find you the answer or help you complete a task. AI can also offer you questions or insights you wouldn’t have thought of yourself—like suggesting a new database segment or loyalty incentive. This level of insight and personalization was not possible with traditional loyalty programs.

    Why this matters

    The overarching theme here is data ownership. By owning their data, brands can make smarter marketing and business decisions, tailor their offerings to meet customer needs, and ultimately drive growth. This shift towards data-driven decision-making is transforming the retail industry.

    FlyBuys NZ may be closing its doors, but its impact on the loyalty industry will be remembered. The program paved the way for modern loyalty strategies, and as we bid farewell, we also look forward to the exciting innovations that lie ahead. Thank you, FlyBuys, for your contribution to New Zealand’s retail history.


     

    Own your customer data. Start a branded loyalty program today and start driving repeat sales.

    Book a demo

     


     

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

    Multi-Channel Selling: Marketing Strategies For Data-Driven Merchants

    ClockIcon  READ
    Get an edge in your market with these multi-channel selling strategies. Learn how to wield your data, create revenue-generating campaigns, and drive...

    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.

    Alpha60 integrations-1

    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.

    new-release-email-campaign-bagsly-cin7

    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.

    hobbytech toys is an example of a multichannel retailer

    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.

    bagsly-winter-collection-email-campaign-targeting-loyal-customers

    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.

    Merrell-Form-1

    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.

    lumevo-email-automation-for-first-time-shoppers

    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:

    webinar - experts give advice on multi-channel marketing

    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.

    Book a demo

     


     

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

    7 Best Examples Of SMB Loyalty Programs [Retail & Hospitality]

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    This article dives into seven of the best SMB loyalty programs, showcasing innovative strategies that will inspire your own loyalty and 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.

    pinjarra-bakery-winning

    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.

    pinjarra bakery loyalty program

    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.

    scottys-makeup-and-beauty

    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.

    scottys makeup and beauty program

    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.

    pace athletic loyalty program and running club

    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.

     

    download free loyalty program roi calculator

     

    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.

    Alpha60 rewards

    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.

    Alpha60 rewards program

    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.

    brandini toffee rewards and loyalty program

    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.

    Tennis-Gears-Onichannel-Customer-Data-Lightspeed-Shopify

    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.

    TennisGear rewards

    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.

    hobbytech toys rewards

    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.

     

    Customer loyalty webinar (1)


    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.

    Book a demo

     


     

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

    Do Loyalty Programs Work? A Psychological and Economic Analysis

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

    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.

    download free loyalty program roi calculator

    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.

    lego_internalimage_widget_casestudy_marsello

    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.

    sephora loyalty program details

    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.

    pinjarra-bakery-image-bannerAsset 3

    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.

    meccas beauty loop instagram post

    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:

    Customer loyalty webinar

    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.

    Book a demo

     


     

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

    Loyalty Programs: What is the Return on Investment (ROI)?

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    Here's how to calculate the return on investment of your loyalty program. Calculate the expected ROI of your loyalty program, or your past ROI.

    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

    download free loyalty program roi calculator

    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.

    Real life example (1)

    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.

    download free loyalty program roi calculator

    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.

    scottys-makeup-and-beauty-discount

    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.

    Alpha60 earn options

    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.

    Frame 6 (4)download free loyalty program roi calculator


     

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

    Loyalty Programs: How Much Should Your Rewards & Points Be Worth?

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

    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.

    Giving back value in a loyalty program-1

    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. 

    Altering value perception

    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

    american airlines rewards program structure

    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

    Screenshot 2024-03-21 at 9.36.25 AM

    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 

    Screenshot 2024-03-21 at 9.43.24 AM

    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:

    Reward type

    What

    Good for

    Consider

    Percentage-Based Discounts

    Customers receive a certain percentage off their purchase.

    Businesses with a low average order value (AOV) or those selling commodity products where customers are price-sensitive. This can encourage larger purchases or more frequent visits.

    It might eat into margins if not carefully managed, especially for high-value items.

    Fixed Dollar Discounts

    Offers a fixed dollar amount off, which could be on the next purchase or once a certain points threshold is reached.

    Businesses with higher and varying AOVs, as it provides a predictable cost that doesn't fluctuate with the price of the cart. It's also appealing for businesses that want to encourage a minimum spend.

    Ensuring the discount threshold doesn't undercut profit margins is essential. It's also less enticing for low-value purchases.

    Free Shipping

    Free shipping on orders after reaching a certain points number or as a tiered benefit.

    E-commerce businesses or those with a significant online presence. It's particularly effective if shipping costs are a known barrier to purchase.

    Should be balanced with shipping costs to avoid eroding margins, especially for low-margin products or very distant shipping destinations.

    Free Products or Samples

    Offering free products or samples once customers reach a certain tier or points level.

    Retailers with high-margin items or those looking to introduce new products. It encourages exploration of your product range and can enhance the perceived value of the loyalty program.

    The cost of goods given away should be carefully considered against the incremental revenue or engagement they drive.

    VIP Access or Experiential Rewards

    Providing access to exclusive events, products, or experiences for top-tier loyalty members.

    Brands with a lifestyle component or those looking to build a community among their customers. Works well for businesses aiming to enhance brand loyalty and differentiation.

    The cost of creating these experiences should be justified by the increased engagement and customer lifetime value they generate.

    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. 

    Download ebook on structuring your loyalty program

    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.

    Book a demo

     


     

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

    How to Increase Customer Lifetime Value

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    Here are 8 tactics you can use to increase customer lifetime value — how much your customers spend at your store over time.

    “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.

    pace-athletic-discounts

    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.

    cross selling and upselling to increase clv

     

    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.

    tennisgear-available-rewards

    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.

    scottys-makeup-and-beauty-results

    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.

    email showing customer feedback being heard

    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.

    Marsello-Case-Study-Katie-Waltman

    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.

    subscriptions can increase clvThis 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.

    educate customers on the value of your products - gopro example

     

    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

     

    Start free trial

     


     

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

    From Feedback to Rewards: How to Build a Loyalty Program that Resonates with Your Audience

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    Learn how to build a loyalty program that puts your audience first. We also discuss strategies for creating a customer experience that secures repeat...

    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.

    amazon prime example

    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.

    Alpha60 earn options


    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.

    scottys-makeup-and-beauty-insights-dashboard

    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

     

    Start free trial

     


     

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

    10 Communities For Retail Business Owners To Join: Learn, Connect & Grow

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    Explore the top communities for small or independent retailers. Connect, learn, and grow together as you navigate the world of retail entrepreneurship.

    It can be a lonely journey being a business owner. Even with family, friends and staff around to support you, there are unique challenges we face as independent retailers and sometimes all you need is to connect with people who can relate.

    We've put together a list of communities, hubs, YouTube channels and online forums filled with experts and peers who can help and support you along the way. 

     


     

    The Boutique Hub

     

    The Boutique Hub home page


    The Boutique Hub is the world’s largest boutique industry community, connecting boutique retailers, eCommerce retailers, wholesale brands, product makers, and industry services and experts. The Hub provides daily connection, strategy, training, wholesale shopping, live events, and a voice for the boutique industry.

    The Boutique Hub has a paid community offering. As a member, you'll find over 7,500 peers to connect with. You'll access hundreds of trainings for all levels of business, daily content calendars, social media engagement libraries, and guest experts with live trainings weekly.

    But if you're not looking to pay, there is a wealth of free content on their website too. Plus, you can follow The Boutique Hub on YouTube for regular updates and tips.

     

    MeetUp groups

     

    Screenshot of a MeetUp search

    MeetUp groups are a great way to connect with other retailers and business owners. Use MeetUp to search for events and communities in your area, and join the groups that resonate with you! Some are structured — sponsored by retail service providers — others are more casual get-togethers with peers.

    Whatever kind of group you're looking for, especially if you're based near a large city, you're bound to find it here.

     

    RETAILMavens

     

    RETAILMavens home page


    If you're looking for training and 1-1 support, look no further than Cathy Donovan Wagner at RETAILMavens. As a former retailer, Cathy knows how much running a business can have you losing sleep... That's why her business focus is more profit, better sleep.

    While this is a more traditional consultation approach, RETAILMavens also has a YouTube channel and Facebook community for those more interested in learning from afar, or connecting with likeminded business owners.

     

    Start A Boutique

     

    Start A Boutique home page


    Are you a woman looking to start or scale your retail business? Raquel at Start A Boutique is dedicated to helping other women become successful boutique entrepreneurs.

    After working at a 9-5 that she wasn't passionate about, she started her first online boutique in 2006 (at the age of 23!) which quickly expanded into a brick + mortar location 6 months later and another location a year after that.

    Starting a new business is no small feat, and she's been through A LOT of trial and error (and money!) to get it right. So for the past 8 years, she has consolidated all her learnings and set up Start A Boutique to help others create their own thriving boutique business.

    Raquel has a YouTube channel, Facebook group and Instagram profile so you can dive right in.

     

    Reddit: r/smallbusiness

     

    Screenshot of the small business subreddit

    While not retail-specific, r/smallbusiness is a great place to go if you are looking for advice or guidance from other business owners. From employee Christmas gift ideas to lawsuits, other Redditors can share their experience or ideas with you and offer support.

    Reddit is anonymous (unless you choose to share identifying details of your business) so it's a great place to ask anything or just have a vent.

     

    How To Run A Retail Store

     

    How To Run A Retail Store home page

     

    Sara Stonecipher of How To Run A Retail Store has spent 20+ years growing, learning, failing, succeeding, and refining her retail skills. Now, she's on a mission to help other business owners work through all the challenges and delights of growing a business. 

    With all her changes over the years, her retail company has doubled in size and is making over a million dollars a year in revenue. She's focused on being an active participant in her local community, creating an immersive shopping experience for the people who live in her city.

    You can check out Sara's workshop and courses on her website, or follow her channel on Youtube.

     

    The Small Retailer Network

     

    Small Retailer Community home page

    The Small Retailer Network in Dubai is a free membership community that host coffee catch-ups, events and workshops for independent retailers. Whether you are an established retailer or just starting your business journey, their community is there to support and encourage you to succeed.

    If you're non-local, they also have a range of places you can ask questions, access support and get advice from the community, including a Whatsapp group chat, Instagram profile and Facebook page.

     

    WhizBang! Retail

     

    WhizBang home page

     

    WhizBang! Retail is all about practical, tactical, money-making ideas and customer-focused strategies.

    On their Youtube channel, retail experts Bob and Susan Negen offer weekly retail tips, world-class online training, business-building events, and transformational programs that help retailers create the wildly successful stores of their dreams.

    WhizBang! are definitely more focused on training and consultation, but they have a rich selection of content on the YouTube channel above, and you can follow them on Instagram and Facebook too.

     

    Retail Minded

     

    Retail Minded conference page

     

    Looking for more of an event or conference? Retail Minded has you covered with the Independent Retailer Conference. Attendees can expect to learn from industry leaders, retail decision makers, technology providers and more. Talks cover the latest must-know insights to help retailers, marketplace sellers, e-commerce operators and other industry professionals thrive.

    Beyond the conference, Retail Minded introduces retailers to leading industry resources, merchant specific news and timely education to help independent businesses – both online and offline – thrive in their unique retail goals.

     

    Retail Customer Experience

     

    Retail Customer Experience webinar

    Retail Customer Experience's on-demand, evergreen webinars cover a wide range of topics, from increasing holiday conversion rates to leveraging AI. Some are more relevant to larger retailers, but much of the content is suitable for any retailer.

    It's also worthwhile checking out their events around the US, especially if you're interested in technology and innovation in the retail and hospitality sector.

    Other communities and forums:

     

    United States

    National Retail Federation

    UK

    The Federation of Independent Retailers 

    British Independent Retailers Association

    Canada

    Retail Council of Canada

    Australia

    Australian Retailers Association

    Retail Leaders Forum

    New Zealand

    Retail Leaders Forum

     

    Have I missed one?

    Are you part of any communities, forums or networking groups that I've missed? Let me know at marketing@marsello.com.

     


     

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

     

    Start free trial

     


     

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

    Retail Outlook: Brick & Mortar Defies Odds, Surge Forecast For 2024

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    What's in store for retail in 2024? We analyze economists' forecasts, recent trends and the latest holiday sales data to look ahead at next year.

    A millennial born in the digital age, I grew up arrogantly thinking brick and mortar was on its last legs. Ecommerce was the way forward, and before we knew it, we’d be living in floating armchairs with everything we needed on a projected screen in front of us (think Wall-E).

    Turns out, things don’t move so linearly. And while technology might evolve exactly as quickly as you expect, human nature doesn’t quite match up in rate of change. We don’t want to live isolated from others, married to a holographic screen, consuming limitlessly.

    Maybe we don’t want mandated office days, but we do want to be in the office, around people, on our own terms. We want the option to shop online, but we also want to know we can head into the city to try those jeans on for size. We’ll make a day of it—see friends for coffee, go to the gym, or run some errands.

    Over COVID, we hedged our bets on direct-to-consumer commerce. Big Tech like Amazon went all-in on hires during the pandemic, then made massive staff cuts when eCommerce transactions tapered off earlier than expected.

    Retail giants also bet big on leisurewear—anticipating a pivot to work-from-home comfies to stick around. But it wasn’t long before they realized they’d over estimated demand. Shoppers reported seeing leisurewear littering Target shop floors, and sales abounded to move stock.

    Looking ahead, what can we expect from 2024? More of the same, or a shift for the better?

     


     

    Online Retail Sales: 2024 Outlook


    2022 saw a contraction in online sales worldwide, but 2023 has been back to growth again—around 7%. Now, even with the possibility of recession still hanging thick in the air (will it happen? will it not?), the consumer appears to be resilient.

    The Economist Intelligence Unit, EIU, is predicting online retail sales growth globally to head back into double-digit growth (10.5%).

    But the US and Western Europe will still be playing catch up, with more sluggish single digit growth than the global average. We’ll be seeing profitability pressures continue to restrict growth in the DTC space, with investors seeking better returns.

     

    Brick and Mortar Sales: 2024 Outlook


    If you’ve been following retail news, you’ll have seen Kohl’s has been suffering in eCommerce sales. Following other big brands, Kohl’s has committed to modernizing its physical presence, as well as providing offers and promotions consistently across all channels.

    Where SMB and mid-market retail can provide a more personal touch, retail giants are under pressure to supplement a lack of personalization with expensive tech and impressive fitouts. Consumers are voting with their wallets, demanding a slick, engaging experience of the bigger players. Think Mecca, IKEA, Apple and LEGO.

    Post-pandemic, consumers seem more likely to switch brands for a better product, deal or experience. We’re so used to buying online now, that after the lockdowns it feels like an experience in itself to wander the stores and physically touch what you intend to buy.

    Rory Moss, loyalty and retail expert weighs in: "While I believe we’re seeing a shift back to brick-and-mortar experiences, retailers are still feeling a lot of the lagging pressures they faced during the pandemic lockdowns, and they’ll still be navigating these effects during 2024."

    Pressures include staffing issues, stock delays and increasing supplier costs (a lot of which are driven by fuel prices and production delays from China).

    "These are all passed on to customers and inevitably eat up retail margin," Rory says, "so we’ll still see consumers considering ‘price’ at the checkouts until the later half of 2024."

    In saying that, EIU forecasts that brick and mortar sales will make up a whopping 85% of total retail sales in 2024. The businesses that have made it through high interest rates and rising costs will enjoy recovering foot traffic and a sales boost.

    “2024 will see the strongest pace of growth for offline retail since the post-pandemic rebound of 2021,” EIU predicts.

    This trend will be global. Beyond Kohls, other large retailers like Nordstrom (US) and Primark (Ireland) are planning store expansion in the US in 2024.

     

    Overall Outlook for Retail in 2024

     

    While the online sales forecast is still overcast, the clouds are clearing and a growth surge is on the horizon for brick and mortar.

    Black Friday / Cyber Monday 2023 proved that the consumer is ever-resilient. We also saw that loyal customers are a critical asset to retailers—brick and mortar in particular.

    Marsello’s latest data shows around half of eCommerce shoppers were repeat customers, and half new shoppers.

    For brick and mortar retailers, on the other hand, repeat customers made up 80% of BFCM sales. What's more, physical retailers grew their customer databases by around 22% over Black Friday in 2023.

    Loyalty programs and customer marketing will play a huge part in boosting 2024 brick and mortar sales.

    "All of this is good news for discount brands and fast-food chains, but if you’re not a price discount retailer, now is the time to utilise your customer data and deliver campaigns which deliver better experiences for your customers," Rory emphasizes. "It’s a great way to mitigate price perception and that’s really where loyalty programs shine."

     


     

    Start a free trial of Marsello, connect your eCommerce and POS platforms, and start syncing the last few months’ worth of sales!

    In 2024, it’s time to put all that data into motion… 

    Start free trial

     


     

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

    POS Integration: Connect Your Point-Of-Sale To Klaviyo [No Code Required]

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    Looking for a simple, no-code way to integrate your POS with Klaviyo? Look no further. Bring all your online and in-store data into Klaviyo with Marsello.

     

    Want to bring all your in-store sales data into Klaviyo?

    Want to connect all your bricks-and-mortar and eCommerce transactions to unique customer profiles?

    Want to segment your customers by their behavior, no matter where they’re shopping with you?

    Look no further.

    Marsello’s omnichannel loyalty program is your solution. Marsello integrates with point-of-sale (POS) apps as well as your eCommerce apps, and syncs all that data into Klaviyo.

    That means you get all your sales data in one place. Better yet, it’s all identifiable. So if your customers are shopping with you online and in-store, you can see a complete activity log of all their purchases.

    That means more complete data, and more marketing precision.

    Klaviyo Integration - How does it work - Banner

     


     

    Why do I need to use a loyalty program?

    A loyalty program is one of the only ways to de-anonymize in-person transactions.

    Without it, your customers can come in and shop without identifying themselves. Which means you’ve got regulars you can’t talk to, unless you’re actually speaking to them in the store!

    You can’t let them know about new products, you can’t email them discounts for their loyalty, you can’t tell how much they’re spending with you.

    With a loyalty program, you know your customers. They're motivated to self-identify, because they earn points on each purchase. Using Marsello, they simply scan their loyalty code or give sales staff their mobile number. This attaches the customer to the sale, and syncs all the order details through to their profile in Klaviyo.

    Plus, with Marsello, you get much more than just SKU and order data. You can see points balance, tier status, and repeat purchase rate in Klaviyo as well (and use these data points for segments and automations). This shows you how engaged your database is, and how incentivized they are to come back.


    See how Marsello's POS + Klaviyo integration works
    Book a call with an expert to connect your in-store and online sales data with Klaviyo.

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    Marsello Integrations

     




    How does the Klaviyo POS integration prevent marketing misfires?

    Marketing works best when it’s data-driven. But your automations won’t make any sense if they’re firing only on your eCommerce transactions.

    If your customers get a consistent brand experience when they shop online, but they’re not getting the same experience when they go in-store, it’s incoherent and jarring.

    For example, if Ronnie Regular gets a follow up email after he buys knitwear online, letting him know how to care for his new garment, that’s the experience he expects from his in-store purchases next winter too.

    By seamlessly linking your sales channels with Klaviyo (via Marsello), you can leverage your in-store loyalty and order data. This enables you to craft more impactful campaigns through Klaviyo. You can segment, automate, and communicate with all the necessary information at your fingertips.

     


     

    How does the Klaviyo POS integration work?

     

    Simply connect your POS, eCommerce and Klaviyo accounts to Marsello. Marsello then links up your in-store loyalty and order details with Klaviyo customer profiles.

    This makes Marsello your loyalty and sales hub, with all that customer data flowing through into Klaviyo for more efficient marketing.

    With the Klaviyo and POS integration, you will:

    • Share customer details with Klaviyo profiles: Sync customer details into Klaviyo, making customer profiles juicier with relevant data.
    • Share customer events with your Klaviyo account: Set up events to automatically send timely and targeted emails based on what your customers are doing – like their shopping habits, loyalty actions, or feedback. These events happen fast, almost in real-time. Share events like in-store and online orders, loyalty actions, and feedback.
    • Send your loyalty and order data to Klaviyo: Sync POS and eCommerce loyalty data and orders to Klaviyo customer profiles instantly. This gives you the full picture of how customers spend. You'll get to know your customers better – their habits and how they like to shop.
    • Create offers and coupon codes for Klaviyo campaigns: Whip up discount codes that work both in-store and online for your campaigns. Load them up against specific customer profiles so folks can enjoy discounts wherever they shop.
    • Build detailed customer segments for Klaviyo campaigns: Take advantage of both in-store and online data to create special customer segments in Klaviyo. These custom audiences help you run more personalized campaigns that go beyond just your VIP list.

    See Marsello's POS + Klaviyo integration in action
    Book a call with an expert to connect your in-store and online sales data with Klaviyo.

    Speak to an expert

     


     

    “Having something that worked across both [online and in-store] channels was really important. Marsello gives us the tools on that front ... It makes it very easy to talk to our customer in just one voice”.

    Will, Pace Athletic

     

     

    What's possible with the POS + Klaviyo integration

    Best integrations for klaviyo - retail

    When you connect Marsello and Klaviyo, you unlock a treasure trove of valuable loyalty and order data such as purchase site, order total, product selections, and more.

    Let’s learn more about the specific data sets that get synced to your Klaviyo profiles.

    POS and eCommerce orders

    By syncing your POS and eCommerce order events into Klaviyo, you can create a 360-degree view of your customers’ spending behavior with your business. With this data, you can create targeted segments and automations based on in-store and online orders, enabling further personalization of your email marketing efforts.

    Loyalty activities

    Using Marsello’s loyalty program, you can encourage customers to return by rewarding them with loyalty points for each purchase they make. Sync loyalty events into Klaviyo to create custom segments and automations based on loyalty program engagement, then use customers’ loyalty profile information to further personalized your marketing efforts. For example, when a customer claims a coupon but hasn’t redeemed it, you could send a follow-up email that recommends products and encourages them to shop.

    Feedback responses

    Finally, using Marsello’s customer feedback features enable you to measure customer satisfaction with their shopping experience, helping you keep track of what you’re doing well and how you can improve. Sync feedback responses to Klaviyo to help measure customer sentiment. Create segments and automate follow-up emails to help nurture customer relationships with your brand.

    And more! For a full list of what’s possible, visit the Help Center.

     


     

    How to connect Klaviyo to your POS with Marsello

    Now that you know how Marsello’s loyalty and order data can empower your email marketing campaigns, here's how to enable the Klaviyo integration within Marsello.

    In your Klaviyo account, you will need to generate a new API key with Full Access to Profiles. 

    To create an API in Klaviyo

    • Navigate to API keys under your profile settings
    • Enter “Marsello” as your Private API Key Name

    • Under Select Access Level, select Full Access Key
    • Click Create. This will generate your new API key.
    • Copy this key and keep it ready to paste into your Marsello add-on settings.

    If you haven’t already created a Klaviyo account, you can do so here.

    How to enable the Klaviyo integration in Marsello

    • First, log in to your Marsello account
    • In your Marsello admin, navigate to Integrations > Add-ons
    • Find Klaviyo in the list of add-ons and click Connect

    • Click Save. Your Marsello & Klaviyo accounts will now be connected.

    And that's it!

    No code, just a simple, seamless integration that only takes a minute.


     


     

    See Marsello and Klaviyo in action with your business
    Book a call with an expert to try Klaviyo and Marsello together.

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    Next read: 5 Klaviyo Integrations Every Retailer Should Be Using

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