Looking for a way to increase revenue and reward your loyalty program customers? Referral program incentives are the answer! 

A referral program, also known as an affiliate program, encourages existing customers to share your brand with their friends in exchange for loyalty points or rewards. They work because people are as much as 4x more likely to make a purchase when referred by a friend. 

Keep reading to find out how a referral program works, why they are so effective, and the steps you need to take to successfully run a referral program in your own business.

Quick Links:

• • • How does a referral program work
    • Why is it important to choose referral incentives
    • 3 steps to choosing your rewards incentives
    • Creating demand for your referral program
    • Examples of successful referral programs from existing brands
    • Final words

How does a referral program work

Retail referral programs reward existing loyal customers for bringing new customers to your brand. 

They work by incentivizing existing customers to tell their friends about your business by offering them points, discounts, or other rewards in return. Referral rewards programs also make the ‘KnowLike Trust’ (KLT) factor easier because loyal customers reduce barriers on your behalf and their positive relationships with your store and subsequent promotion of it help their referred friends to feel confident and inclined to shop.

If you set it up correctly, it is a win-win-win strategy for growing your business.

Firstly, your existing loyal customers see instant benefits because when they refer new customers, those referred shoppers use a unique customer code tied to your original customer. In return for each successful referral (tracked by their unique customer code) they receive tangible rewards. 

Secondly, the new customers reap the rewards. They receive rewards or discounts for their purchase, as well as a good retail recommendation from someone they know and trust. 

Lastly, your business sees huge growth in revenue and in customer loyalty. Did you know that referred customers are actually much more likely to stick around too? Let’s dive into why referral marketing is an important addition to your marketing strategy.

Why is it important to choose referral incentives

Customer referral programs are one of the best forms of marketing you can run. The numbers speak for themselves:

• • • Customers acquired through referral programs have a 37% higher retention rate.
    • In general, referred customers increase profits by about 16%.
    • Referral programs mean that loyal customers are marketing your brand for you – 83% of customers trust recommendations from people they know. 
    • 65% of a company’s revenue comes from existing customers, so incentivizing loyal customers will always be beneficial to your bottom line. 

Not only this, but a referral program also encourages new customers to sign up. This means that instead of losing potential sales, you can target your marketing and follow up on abandoned carts to increase conversions. 

Creating a rewards program is worth the investment!

3 steps to choosing your rewards incentives

No matter what referral incentives you choose, there is one question to keep in mind: “are we giving our customers the best possible experience?”

Yes, you benefit greatly from referred customers (they have a lifetime value of about 25% more than other customers). However, your referral incentives should always have the customer experience at the center.  

Whether your incentive structure rewards existing customers, new customers, or both, this step-by-step guide will show you which structure is best for your brand.  

• • • Step 1: Choose the right incentive structure 
    • Step 2: Choose the type of reward you want to give 
    • Step 3: Set the terms and conditions of your referral program. 
      
      

Step 1: Choose the right incentive structure

Your incentive structure will depend on your business and customer experience goals. 

Integrated loyalty programs are one of the easiest ways to set up referral incentives. This allows for several different referral programs: 

• • 1. Incentives for your existing customers (one-sided incentive)
    2. Incentives for the new customer when they sign up (one-sided incentive)
    3. Incentives for both existing and new customers (two-sided incentives)

Let's explore these in a little more detail:

1. One-sided incentives for existing customers

The first incentive structure is rewarding the customer that refers people to you. 

Rewarding your existing loyal customers is always a successful marketing strategy. With a loyalty points program, you can easily award customers points when they refer friends to your brand. 

For example, Bulo Shoes’ loyalty program lets customers earn points even when they’re not making a purchase. Customers are encouraged to share Bulo’s channels on social media, complete their profile and follow Bulo on social media so they can earn points that they can spend in-store.

2. One-sided incentives for the new customer

You could also set up a one-sided incentive that rewards the new customer. 

This could look like:

• • • A discount for their first purchase
    • Automatically earning points when they sign up to your loyalty club 
    • A free shipping discount for first purchases only 

As a referral program, this might look like giving loyal customers discount codes to share with their friends. For example, you could let people share a code for free shipping on their first purchase with you.

One-sided incentives might work for extremely loyal customers, however, it will always work best when you reward existing customers for their efforts. This particular structure works better with influencers who are already receiving incentives in other ways (e.g. Use Code AMANDA10 for 10% off).

3. Two-sided referral incentives: rewarding both customers

Rewarding both customers is the best option for optimum referral program results. This is the standard program for Marsello referral programs. 

In this setup, you reward your existing customers for bringing in referrals, as well as making a great first impression on your new customers. This strategy is win-win-win.

Step 2: Choose the type of reward you want to give

Now that you know who you are rewarding, you need to choose what you are going to offer them. 

The best referral incentives both encourage existing customers to rave about your brand as well as boost your sales and brand image. 

1. Discounts

When an existing customer refers a new person, sweeten the deal by offering a referral discount off their first purchase. This gives them a positive first experience and lets them try out your brand without committing at full price. 

An example of a referral discount is the successful jewelry and women’s wear brand, Katie Waltman. They have a two-sided incentive structure. 

The team at Katie Waltman has not only boosted customer retention with their generous loyalty program, but they've also added a referral program for their customers. The referred friend is incentivized with 10% off their first order and the existing customer earns 200 points when their referred friend makes their first purchase. 

As a result of their creative loyalty program marketing, Katie Waltman has seen 100% customer engagement rate with their omnichannel loyalty program, and a 75% reward redemption rate!

2. Cash / Cash-back

Another referral award is a cash-back program. This more closely resembles an affiliate or commission program than a loyalty rewards program. 

In this setup, customers get a cash reward or percentage of the new customer’s purchase. For example, customers could get $5 every time someone uses their unique code for a purchase of $30 or more. 

For an effective cash-back program, you need to make sure that the minimum purchase amount is more than the cash-back reward. 

Take another look at Katie Waltman’s loyalty program!

The KW loyalty offering includes a “5% back on all purchases for creating an account.” With an offer like this, Katie Waltman not only incentivizes customers to join their loyalty program, they really make it worth the customer’s journey from window shopper to a loyal customer. 

3. Store credit

Earning store credit or loyalty points is a great way to reward customer referrals. That way loyal customers can enjoy your brand even more, and money keeps coming back into your business. 

NZ streetwear brand, Federation +, is a great example of using customer referrals to earn store points. 

With a customer referral program in place, Federation + encourages their current customers to refer friends and earn loyalty points as they do so. This way, the brand grows their customer database, while also improving customer loyalty. 

4. Gift cards

Gift card rewards are similar to store credit incentives. 

A study from First Data shows that on average, U.S. consumers spend around $59 more than the value of a gift card. You could give gift cards to either the new customer,  your existing customer (as a referral reward), or both!  

Combined with a loyalty program, automatic upselling, and investment in customer experience, gift card rewards can be an effective way to boost your average cart value (as well as rewarding referrals). 

6. Free subscription period

Offering a free or reduced subscription lets new customers “try before they buy”. This is most effective for businesses that have a long-lifetime or recurring product. Crealunch is a good example, where customers would be buying meals on an ongoing basis. 

Once they have crossed the threshold, your automatic email marketing can step in and keep them convinced! 

Step 3: Set the conditions for your referral program

The last step for effectively incentivizing referrals is to establish parameters. You don’t want to accidentally encourage referral program abuse or suddenly be out of pocket! 

Posting referral program terms and conditions clearly will mean you get the sales benefits without the headaches. 

Here are some questions to ask yourself when setting conditions.

When will the referral reward be given? 

Decide on a timeframe for giving out rewards. This might look different depending on what reward type you choose. 

Here are a few things to consider: 

• • • Do new customers automatically get a discount or only after they sign up? 
    • For cashback, do they get it immediately after the purchase has been made or each month? 
    • Do existing customers only get rewards when friends actually make a purchase?
    • Is there a time limit on the discount code once new customers sign up? 

Thinking about these conditions early on will mean you make money from referrals rather than lose it. 

Should you use a tiered reward structure? 

A tiered reward program is a customer incentive strategy that rewards people the more they spend. 

Consumers who engage with high-performing loyalty programs are 78% more likely to spend a premium. So the more you reward people, the more loyal they will be!

A referral program rewards your most loyal customers for advocating on your behalf. If you use a tiered reward structure, your referrals could increase as customers move up the levels. A tiered system gives more rewards to people higher up to encourage loyalty and higher spending.

Let's look again at modern streetwear brand Federation +. Their loyalty program features three loyalty tiers: silver, gold, and platinum. With an 88% reward redemption rate and 20% repeat purchase rate, it’s no wonder that they have seen almost a 10% revenue boost from loyalty marketing alone.

Creating demand for your referral program 

You don’t need to reinvent the wheel to have a successful reward program. Marsello customers see the best results when they keep it simple! However, there are a few things you can do to make your referral program incentives more desirable or effective.

• • • Create scarcity: Add a limited timeframe for coupons. This creates scarcity and encourages people to spend now
    • Reward loyal customers: If you are a new brand you might consider offering a slightly bigger reward for your existing customers to increase loyalty. For example, if sign-ups receive 20 points, you could make referrals 25 points
    • Run a seasonal campaign: To give your referral program a boost you could give double points for a limited time 
    • Create multiple referrals: instead of giving out store points, you could give people free gifts after a certain number of referrals
    • Make an ambassador program: This is like a loyalty program except exclusively for referrals. This lets your most loyal customers feel like they are “in the club” and are rewarded with raving about you 

Examples of successful referral programs from existing brands

Still not convinced that a referral rewards program is the way to boost sales and build customer loyalty on autopilot? Take a look at these examples of successful referral programs and how simple they can be! 

Merrell NZ

Merrell NZ is a footwear brand that helps people get into the great outdoors. Their loyalty program has a 15% repeat purchase rate and an average purchase frequency of 3.5x, showing that Merrell NZ’s customers are already proven loyal regulars. Customers can earn 100 points to spend in-store when they refer a friend.

Smack Bang 

Smack Bang is a New Zealand-based merchant that specializes in locally-made pet accessories, gifts, and treats. The gorgeous pet boutique also has a lovely loyalty program that’s paying dividends; these loyalty initiatives have generated a 100% loyalty engagement rate, and a reward redemption rate of 38%. Using their adorable, branded widget, customers can earn 10 points when they refer a friend which they can see immediately on their dashboard. 

Carolina Lifestyle 

Carolina Lifestyle also rewards customers who successfully refer their friends. Members get 100 points (equivalent to $10) for every successful referral – and those customers immediately get $20 simply by joining!

All these initiatives, combined with Carolina Lifestyle’s exquisite and unique products, help to ensure that shoppers keep coming back. And it works – the company’s average customer lifetime value (CLV) is $716.94, and about a third of Carolina Lifestyle's customers return to shop again within two months.

CROSBY by Mollie Burch 

CROSBY by Mollie Burch is an eclectic, modern fashion brand. Their loyalty program, The Crosby Collectors, lets customers earn Pink Points. Their referral program is a good example of setting conditions for rewards. For example, customers receive points for referring a friend which can then be spent in store on orders over a certain amount.

Final words

Offering your new and loyal customers referral program incentives is a win-win-win sales strategy. Whether you are offering limited-time discounts, points to spend in-store, or other fun freebies, a referral program is sure to keep your customers (and bank accounts) happy.

Customer advocacy starts by creating a rewarding and engaging experience no matter how your customers choose to shop. Marsello makes it easy to launch a bespoke loyalty and referral program that is proven to increase customer lifetime value and maximize ROI.

Watch the Loyalty Marketing Masterclass

In this Cin7 Masterclass, Marsello CRO Rory Moss dives into the how-to of successful loyalty marketing.

Quick Links:

• • • What is customer loyalty?
    • Why deploy a loyalty or rewards program?
    • Why focus on repeat customers?
    • Checklist: How to develop a successful loyalty program
    • How to measure the success of your loyalty program
    • Segment and delight customers with RFM analysis
    • Success Story: Merrell NZ
    • Key takeaways

What is customer loyalty?

Are you part of a loyalty program? Your answer is probably “yes”. But does it make you more loyal to that brand? According to CRO Rory Moss, it actually doesn’t.

Customer loyalty is all about customer relationships with your business. The positive interactions you have with customers every day and the relationships those interactions build create measurable value that you can continue to grow.

And customer loyalty is not necessarily transactional; it’s about the experience your customer has when they walk into your store, shop online, read an email, or have any other interaction with your brand.

For a loyalty program to work...

• • • Your product/offering must be consistent.

    • Your product/offering must be valuable.

You don’t need a loyalty program to differentiate and compete.

You do need a deeper understanding of your customer base and a reason for your customers to keep coming back.

Why deploy a loyalty or rewards program?

There are lots of ways to give customers a good experience and keep them coming back - loyalty marketing is just one. Before you make the call, make sure a loyalty program is right for you and your business objectives.

So, why would you choose to deploy a loyalty program?

• • • Gain a deeper understanding of your customer base to augment your marketing mix. The data you collect will empower your marketing team to deliver more personalized, targeted customer experiences.
    • Mitigate price perception and influence perceived value. Smaller brands can’t compete with more prominent enterprise brands on price alone. Loyalty programs are one way to attract customers from your larger competitors.
    • Formation of customer ‘clubs’ which reflect your brand values. Your loyalty program is an extension of your brand. You can tailor your rewards to your customer and personalize automations to augment your brand experience.
    • Steal market share from existing programs. For example, fuel retailers use loyalty marketing to attract customers from competitors. Fuel retailers don’t make their money on fuel, but they do make money on people walking in and buying products in-store.
    • Enhance the customer experience with personalization. Birthday messages, post-purchase automations, data-driven product recommendations, merge tags within campaigns – adding personalization to your marketing will improve your customer’s experience with your brand and help you build long-lasting relationships.
    • Surprise and ‘delight’ with personalized moments. Keep your rewards program up-to-date. Don’t do one big launch then set and forget it – plan campaigns, add new rewards or run competitions. Give your customers new things to engage with (see more ideas in the checklist below).

Ultimately, data is all about retention. But smaller retailers can’t shell out for expensive coalitions or big agency-led research projects. Loyalty programs make it much cheaper and easier to get that data yourself.

Why focus on repeat customers?

Did you know 61% of retailers cite customer retention as their biggest obstacle, and a 5% increase in customer loyalty can increase the average profit per customer by 25% – 100%? (Source: Invespcro.com)

Developing customer loyalty is critical to long-term customer retention and loyalty programs can be a great marketing tool to really strengthen those feelings of brand loyalty.

Checklist: How to develop a successful loyalty program

So what questions do you need to be asking and what steps do you need to take to help you develop a loyalty program that your customers love and that sees long-term success?

Ask: do I need a loyalty program?

• Analyze your NPS or CSAT scoring. Are customers satisfied with your offering? 
• Would deploying a rewards program diminish your brand or enhance the experience and value proposition? 
• Understand your customer’s needs, their values and ask them about their rewards preferences. 

Any brand can deploy a rewards system, but it needs to complement your offering to be successful. Make sure you know your problem and make sure loyalty marketing is the right solution. Sometimes, it might be a marketing problem; other times it could be a problem with product-market fit. Deploying loyalty marketing is not always the right solution.

Study your competitors

Look towards your competition, and distinguish whether loyalty tactics would steal market share – a common tactic in Fuel Retail. 

If all of your top competitors have implemented loyalty programs, this could be a good indication that they believe loyalty marketing will increase their market share. Of course, that does not necessarily mean it’s right for your brand! 

Alternatively, if you can’t see any of your competitors doing it, maybe there’s a reason why. Again, this is not conclusive evidence – your brand could be ahead of the curve, which could be a very rewarding opportunity to increase your market share.

Do your loyalty platform research

Custom-built loyalty marketing tech can be costly. While some brands have implemented custom-built programs really well (for example, Mecca’s Beauty Loop), we recommend choosing a platform that integrates with both your POS and eCommerce platforms and enables easy set-up straight off the bat.

Ensure your chosen platform works across your tech stack and don’t invest in programs that don’t scale with your customer database growth. Make sure you provide an omnichannel experience – customers expect to redeem online.

Set up a pilot store

Before any go-live, ensure you’ve set up a single site to test and measure your loyalty program success. Are customers responding to your program and the points values you’ve set?

Keep it simple

Too many earn rules result in a term called ‘loyalty confusion’, where your customers don’t understand what they get in return.

Look at your data and adjust your program accordingly

Once you’re transacting and issuing points, measure sign-up rates and ‘point breakage’ (the % of points earned and spent) monthly. Your point breakage rate will tell you pretty quickly whether or not the rewards program is working.

If your customers aren’t spending their points, they’re not engaging in your program. Customer engagement is essential if you want to build long-term customer relationships that result in growth.

Start small and introduce new campaigns quarterly

Keep your program fresh by introducing new rewards, double points days, or VIP tiers. You want to ensure your marketing team has a constant stream of new things to shout about!

How to measure the success of your loyalty program

•  
  • • Customer Feedback
      Are your customers engaging with your loyalty program?
    • Point Breakage
      Are customers spending their points? Track your Point Breakage rate monthly.
    • Loyalty program Return on Investment (ROI)
      Cost of the loyalty program vs. increased revenue since implementation.
    • Customer Lifetime Value (CLV)
      How much, on average, your customers are worth to your business throughout their relationship with your store.
    • Repurchase Rate
      The % of your customers who complete more than one purchase.
    • Average Purchase Frequency
      The average rate at which customers shop with your store.
   
•  

Segment and delight customers with RFM analysis

Smart retailers use RFM analysis: Recency, Frequency, and Monetary value.

Segment your customers into different buckets – a new customer has very different needs from a regular or loyal customer. Treat each customer’s needs differently, rather than applying a standard experience in one broad stroke. Incentivize each segment to come back and reward those who do.

These days, people expect this kind of brand experience.

Success Story: Merrell NZ 

When COVID hit, Merrell NZ knew they needed to grow their eCommerce presence and encourage customer engagement. To do this, they began testing automated campaigns, one-off emails, and a detailed loyalty program that was designed to attract their in-store customers to shop online.

By ensuring their marketing changes were recognizable, appealing, and informed from customer data, they were able to grow their customer loyalty program and VIP memberships, improve conversion rates, and increase repeat purchase rates. So far, they’ve seen an ROI of 969x – for every $1 they’ve spent on their marketing initiatives, they’ve earned $969 back.

“[…] the Merrell Rewards program means a lot to us – it gives us the opportunity to link customers from our retail and web stores, work around customer retention and automate email marketing flows in a really clever way.” - Merrell NZ

Key takeaways

• • • Deploying a loyalty program won’t lead to loyal customers, but it will help you develop loyalty program tactics.
    • Loyalty programs mitigate price perception.
    • Use personalization and automation to delight customers.
    • Be consistent across your sales channels and marketing.
    • Prioritize memorable customer experiences.
    • Start small and build on your program.
      
      

Retailers need to know the tech they invest in will meet their needs and help their businesses grow while also adapting to current trends. In response to changing customer shopping trends, 2021 saw more retailers than ever move into the eCommerce space, and the importance of creating a cohesive shopping experience across in-store and online locations was highlighted again and again. To master this, retailers have needed faster websites, smarter tools, and better connectivity between their different store types.

To meet the growing needs of omnichannel retailers, Shopify released several exciting changes in the last 12 months – from Themes 2.0 to Shopify Flow. To build on these additions and create more and more marketing opportunities for Marsello x Shopify retailers, we released several complementary features that are helping retailers make the most of their retail toolkit.

Let’s dive in and discover Marsello’s latest features and biggest updates for Shopify users.

What features has Marsello released for Shopify users?

The last year saw the development of several stand-out features, and many of these were designed specifically for Shopify powered-retailers looking to grow their business with smart marketing. 

Introducing Marsello’s  biggest releases of 2021 and a sneak peek of what’s to come very soon:

Shopify Theme Extension – Product Recommendations:

The announcement of Themes 2.0 at the Shopify Unite 2021 conference was a cause for a flurry of excitement. With some sources calling it Shopify’s biggest investment in their platform to date, Themes 2.0 opened up a world of opportunities for retailers looking to create their perfect online store, edit and customize themes, and prioritize user experience. 

To meet the needs of fast-growing retailers who need smart, data-driven marketing tools, we developed a product recommendations extension for Shopify Themes 2.0 users. With this tool, users can add personalized product recommendations to their eCommerce store to encourage bigger cart sizes, improve customers’ online purchase experience, and help customers find products they’ll love.

Marsello’s product recommendations are powered by our purpose-built, data-driven product recommendations engine that recommends products based on buyer behavior and purchase history. And the potential doesn’t stop with data-driven recommendations either. Retailers can also select specific products to implant into the recommendations block and encourage sales of specific products. 

Learn more about our Shopify Theme extension – Product recommendations.

Marketing Extensions:

Shopify’s extensions feature allows merchants to integrate tools and apps into their Shopify admin almost as if they were in-built. There are countless options to choose from merchandising to stock management; however, none would allow you to create loyalty points campaigns designed to multiply customers’ loyalty points on purchases automatically – this is where Marsello’s Marketing Extension for Shopify comes in.

Shopify Marketing Extensions users can now create points campaigns in their Shopify admin with the Marsello marketing extension, reducing steps to creating and managing loyalty points campaigns that boost customer loyalty. For example, to increase customers’ motivation to make purchases, you can easily create campaigns where customers earn double loyalty points during a set promotional period directly from the Shopify admin. 

Loyalty points promotion campaigns are a great tool to help promote and encourage engagement with your store's loyalty program.  You not only give customers an extra reason to shop and increase their cart size, but points campaigns are a great alternative to running a sale or discount and help your customers to feel appreciated and respected.

Marsello’s Shopify Flow connector:

2021 was a big year for marketing automation – in fact, one study found that 51% of companies were reportedly moved to or were already using marketing automation in some way by 2021. This increased demand for automated marketing capabilities saw the perfect opportunity for Shopify to release Shopify Flows for their Shopify Plus users - in our opinion, one of the most exciting features released in 2021. 

To help Shopify Flow users tie their loyalty program to customer activities, we released a Shopify Flow connector designed to augment the potential for loyalty marketing. Customers can now earn loyalty points for actions like leaving Google or social media reviews, purchasing specific products, or even purchasing at a particular store location through carefully crafted flows and triggers. 

Learn more about Marsello’s Shopify Flows connector in our launch blog.

Google Reviews:

Do you request Google Business reviews from your customers? Do you manage and respond to the reviews left about your business? 

Google Reviews are integral to helping business owners improve their Google ranking and appear higher in search results, which, in turn, plays a huge role in influencing customers’ purchasing decisions.

To help you collect, manage and respond to reviews, we’ve developed a Marsello-powered Google Reviews marketing feature. A soon-to-be-released addition to the Marsello toolkit, consider this your sneak preview into our latest tool for retailers who want to increase their presence through local SEO and Google recommendations. 

Marsello’s Google Reviews feature will make it easy to automate the review process and create a consistent flow of quality reviews that increase online visibility and help to acquire new customers. 

With email and SMS automations built into your Marsello admin, it’s easy to promote and generate Google reviews as soon as a customer makes a purchase (when their experience is fresh in their minds). You can then easily track, manage and respond to reviews directly from your Marsello admin. Subscribe to our blog and emails to stay up to date with each new release as it happens.

What’s changed for the Marsello platform?

One of Marsello’s biggest updates within the last year has been to implement a new look and feel for our existing app. Since June 2021, we’ve been launching a variety of improvements to the Marsello admin to save you time and make your life easier. With a cleaner design and faster tech, new-look Marsello will now launch universally in April 2022, and we can’t wait to hear what you think.

Can't wait? Get access to new-look Marsello now. 

How can Shopify merchants make the most of their Marsello marketing?

Hopefully, you're familiar with Marsello’s core features. If not, let’s recap quickly with just a few bullet points:

• • • Customer loyalty marketing – use a branded loyalty program, automated notification emails, varied reward types, and achievable earn options to garner customer support and engagement. And you can build customer relationships that span a lifetime with VIP tiers that segment your loyal customers based on their purchase history. Learn more here.  

• • • Marketing automation – delight customers by communicating with them how they’d prefer. With Marsello’s email & SMS campaigns, you can create one-off campaigns from scratch or choose from a library of professionally designed email campaigns developed to get results. And once you’ve sent your campaigns, it’s easy to monitor their success, create new campaigns, or even boost your original with a new subject line for those who didn’t open the first. Learn more here.  
      
    • Email & SMS campaigns – delight customers by communicating with them in the way they’d prefer. With Marsello’s email & SMS campaigns, you can create one-off campaigns from scratch, or you can choose from a library of professionally designed email campaigns developed to get results. And once you’ve sent your campaigns, it’s easy to monitor their success, create new campaigns, or even boost your original with a new subject line for those who didn’t open the first. Learn more here. 
      
      
    • Marketing lists – Use forms, landing pages, and marketing opt-ins to grow your customer database and your return on investment. You create marketing opportunities with new customers by capturing customer information at your POS and eCommerce site. Marsello also automatically segments your customers based on their shopping history, making it easy for you to leverage your customer database and target specific customer groups through email, SMS, or even Facebook ad targeting. Learn more here.  
      
      
    • Feedback surveys – Gather customer feedback to understand their shopping experiences and create memorable shopping experiences that they adore. By adding feedback surveys to your communications (for example, a points-earned email that is sent when a customer has just made a purchase), you get confidential, real-time insight into what it’s like to shop at your store. Monitor your growth, see how your business improves, and celebrate your success by measuring customer satisfaction and feedback. Learn more here. 

And Marsello has much more to offer our Shopify users too – just think of the combination of possibilities! What if you were to create a custom Shopify Flow that rewarded your customers with loyalty points when they leave a 4-5 star review? Or, if customers shopped during an annual secret sale, you could reward points to purchases over a set price! Get creative and start delighting your customers in all-new ways with all new experiences. 

Get in touch with our team to learn about Marsello’s full product offering for Shopify.

Final words

The last two years have seen tremendous growth for retail and eCommerce technologies – and that growth doesn't seem to be slowing down. That's why meeting the growing needs of retailers in the retail and eCommerce market is at the forefront of platform and tech providers like Shopify (and Marsello). 

To help our Shopify-powered retailers achieve their goals, grow their business, and stay ahead of the competition, we needed to continue to innovate with Shopify's product offering in mind. And we don't plan on stopping in 2022. 

From automated campaigns and complete customization to set-and-forget style flows and fully integrated customer loyalty programs, the future is looking bright for Marsello x Shopify retailers. Book a demo today to grow your business with Marsello.

Quick Links:

• • • How do Loyalty coupons work?
    • How does a POS system increase customer loyalty?
    • Different ways customers can redeem loyalty coupons through a POS system
    • Final words on redeeming loyalty coupons through a POS system
      
      
      

On average, 65% of your revenue comes from your most loyal customers. Integrating loyalty coupons into your existing POS system lets you serve your best customers and reap the revenue rewards with ease! 

Loyalty coupons are one of the best ways to encourage repeat buyers, increase the lifetime value of customers, and build the loyalty of your already happy customers. Customer loyalty strategies pay for themselves.

By combining loyalty coupons and your eCommerce or POS system, you can target your marketing, identify your best customers, award coupons and turn your business into a loyalty-building machine. 

How do Loyalty coupons work?

Loyalty coupons, also known as customer coupons, are effective at driving repeat and loyal customers. Repeat customers spend 33% more than other customers, so it is worth focusing your marketing efforts on them specifically. 

So how do they work? 

Simple. Loyalty coupons encourage already loyal customers to be even better customers by improving their shopping experience. You can either set up customer accounts to add points and vouchers or give people discounts automatically when they meet certain criteria. 

The easiest way to start giving loyalty coupons or rewards points is to integrate it with your existing Point of Service (POS) system.

For example, ethical toy company Evermore Toys has customers that buy online and in stores. To simplify their loyalty program, they integrated Marsello directly into their POS systems (Shopify and Cin7) so customers can redeem points no matter where they shop. Using Marsello, their simple loyalty program resulted in a 156x ROI and a 738.87% increase in revenue.

You don’t need to reinvent the wheel to integrate loyalty coupons into your business!

How does a POS system increase customer loyalty?

A POS system increases loyalty because you can use customer details to personalize their shopping experience. An all-in-one system makes it easy for customers to use loyalty coupons no matter where they shop with you and therefore improves user experience and loyalty over time.

1. By collecting customer data

One of the main functions of a POS system is to collect customer data. This allows you to create targeted marketing campaigns, personalize customer experiences, and identify your most loyal customers.

Your POS system is an opportunity to collect online eCommerce and in-store visitor details and turn them into repeat customers. The best way to collect details is in exchange for something valuable like in-store points and loyalty coupons.

For example, Merrell NZ cleverly maximizes every opportunity to encourage customer engagement with their brand. Their website has a simple pop-up form that encourages shoppers to leave their name, email, and date of birth in exchange for promotions and exclusive discounts. 

This pop-up has a sign-up rate of 25%, a customer engagement rate that you miss out on if you don’t collect customer details with a POS system!

2. By providing personalized promotion

Once you have customer details in your POS system, you can create personalized promotions. The details you collect when a customer signs up mean that you can segment your marketing based on their behavior. 

This behavioral segmentation is known as RFM segmentation, which stands for 

• • • Recency – When the customer last purchased from you.
    • Frequency – How often they buy. 
    • Monetary – The amount they’ve spent.

In other words, you can maximize your marketing ROI and increase loyalty by knowing more about them. 

Modern streetwear brand Federation + shows this in action with their segmented email campaigns.

When shoppers first create a customer account with Federation +, they immediately receive the “WELCOME TO THE FAMILY” automated email campaign. The eye-catching email offers customers 10% off their first purchase and uses a product recommendations email block to suggest current top-selling products. 

This campaign has seen a 19% conversion rate in just over 5 months, and almost 50% of the total revenue generated by their automated campaigns is directly attributable to their welcome automation! 

3. By identifying VIP customers and rewarding them

75% of consumers say that they favor companies that offer rewards. Integrating a rewards program with your POS system will make it easy to identify and reward your already-loyal customers. 

VIP programs are effective because they target customers who already have buy-in with your brand. Our Bralette Club runs an effective rewards program that makes this process extremely easy.

Through their all-in-one system, customers can sign up, earn rewards and in-store loyalty points and be part of the Peach Party community. The Our Bralette Club VIP loyalty program has an impressive reward redemption rate of 71% (in 2020) and has resulted in a 278% increase in revenue.  

4. By providing a convenient customer experience

According to a study by eMarketer, the only thing online shoppers like more than customer reward coupons is a quick and easy checkout process. 83% of shoppers marked this as their top priority for loyalty. 

This is why your POS system is so important for building customer loyalty! It doesn’t matter how good your discounts and loyalty program is if the user experience doesn’t deliver.

Different ways customers can redeem loyalty coupons through a POS system

Your POS system can encourage loyalty in many different ways. From in-store points to purchase order value increase, there is a loyalty coupon system to suit every business. 

1. Through a points-based system

A points-based system is one of the most common types of loyalty coupons for retailers. 

A rewards point loyalty program encourages certain customer behaviors. They can earn points for things like 

• • • Signing up for your loyalty program 
    • For every dollar they spend 
    • Sharing your brand on social media
    • On their birthday

For example, boutique dog brand SmackBang has an on-brand widget for their loyalty program. It seamlessly integrates with their POS system and lets customers see how many points they have and how they can earn more. 

Their points system has generated $8,200+ for the brand, sees a 100% loyalty engagement rate, and a reward redemption rate of 38%.

Building loyalty with points systems works best when it benefits your customer as much as your business. Rewards create loyalty when you give your best rewards to your best customers. 

2. Through an automatic voucher system

An automatic voucher system is where customers automatically qualify for a voucher when they meet certain requirements. 90% of consumers use coupons so it is an effective way to increase loyalty and amount per spend. 

For example, you could add an automatic voucher when someone has made a purchase, reached a certain threshold, or joined your loyalty program. 

If you are going to use an automatic voucher system, it is best to do this directly through your POS system. Physical vouchers incur production and distribution costs, whereas POS systems allow customers to easily access vouchers without delay

3. By providing discount vouchers

Everybody loves a good deal! Discount vouchers can be a great way to entice new customers, reward existing ones, and boost revenues for a short period. 

However, offering discount vouchers too often can actually have the opposite effect. It can make it seem like you are a discounted brand.

For effective discounts, vouchers should:

• • • Have a time limit or expiry 
    • Be combined with personalized or targeted marketing campaigns (e.g. for first-time customers) 
    • Be easy to use online or in-person (i.e. integrated with your eCommerce and POS system)

Instead of just discounting prices you could also add value.

For example, skincare retailer Sigi Skin ran an email campaign for Mother’s Day where instead of slashing prices they added a free makeup pouch. Their email campaign had an impressive open rate of 37% and a conversion rate of 19%, and, in the first 7 days since it was sent, the campaign saw a revenue increase on their usual daily sales of +48%.

4. By purchase order value

Loyalty coupons for purchase order value is a system where customers can qualify for rewards when they reach a certain amount in their cart or in-store. 

24% of consumers would spend more to qualify for bonuses like free shipping. This benefits them as much as your revenue! 

There are several ways you can use purchase order value as a loyalty reward:

• • • • $ amount off total cart
      • % off total cart 
      • $ or % off a specific item 
      • Get a free product 
      • Get free shipping 

The best part? All of these loyalty rewards can be integrated directly into your eCommerce or POS system with Marsello!

5. Through promotions

Running a points promotion is a great way to get a boost in loyalty points and sign-ups. Even your best customers need a little encouragement sometimes! 

Your POS system will allow customers to easily earn and redeem points earned during your promotion. This positive user experience maintains a positive relationship over time. 

An example of a points promotion was the double points promotion run by bCode. This shoe brand started a loyalty program for their existing business and wanted as many people to sign up as possible when it launched.

When they launched the online version of their loyalty program, they ran a points promo called “Double Perks weekend” which enabled members to earn double points on all purchases over a three-day period.

This resulted in a 94% increase in loyalty points spent by both new and existing loyalty club members.

Final words on redeeming loyalty coupons through a POS system

Loyalty coupons give your best customers even more reasons to rave about your brand. Whether you choose rewards points, loyalty programs, discount vouchers, or promotions, customer coupons will benefit your customers and increase your overall revenue. 

Marsello lets you integrate simple, on-brand loyalty coupons and reward points directly into your existing eCommerce and POS system. Whether you sell online, in person, or a mixture of both, you can easily reward your most loyal customers with Marsello integrations!

Quick Links:

• • • What is customer segmentation?
    • Why segment your customers?
    • What are the benefits of customer segmentation?
    • Defining your customer segments
    • How to keep each of these customer segments coming back
    • Final words
      
      

Have you ever wondered why marketers talk about why you should segment customers so much? 

It’s because it can seriously boost your bottom line! 

One of the best ways to help you segment your customers is with an engaging loyalty program. With detailed customer data pulled from your customer loyalty software, you can target different customer groups based on your marketing goals and individual campaigns. From your most loyal customers to infrequent shoppers who are at risk of leaving your brand community, you can develop a targeted, personalized marketing campaign for each customer group. 

Personalization using segments drives sales and boosts loyalty. 

A survey by Segment has shown that 49% of respondents have purchased a product they weren't planning to buy because of tailored suggestions, and 44% said they would become repeat buyers after experiencing tailored shopping experiences.

If you’re ready to see why customer segmentation is so beneficial, what segments you should be targeting and how to keep customers coming back using loyalty programs, then keep reading. 

What is customer segmentation?

Customer segmentation, specifically behavioral segmentation, automatically groups shoppers based on their shopping habits. It shows you who your best customers are, which shoppers are more likely to make repeat purchases, which ones are slipping away, and more.

By using behavioral segmentation, your brand can easily identify your most valuable customers and focus promotional efforts on those most likely to purchase again. This is commonly referred to as RFM, which stands for:

Recency – When the customer last purchased from you. 

Frequency – How often they buy. 

Monetary – The amount they’ve spent.

Put simply, RFM looks at the overlap between when a customer last shopped with you, how often, and how much they spent. This allows you to target your best customers with greater accuracy.

The most common segments are:

• Best
• Loyal
• Promising
• New
• At-risk
• Lost 

Once you identify which category your customer is in, you can strategically market to them and increase the chance of them converting. 

Want to know even more about what RFM is? Read this in-depth guide to customer segmentation with Marsello.

Why segment your customers?

One of the main benefits of customer segmentation is that you can put your marketing budget where it matters: your existing loyal customers. 

Depending on what industry you are in, acquiring a new customer can be anywhere from five to 25 times more expensive than keeping an existing one. As Forbes put it, “acquiring new customers is important, but retaining them accelerates profitable growth.”

As well as targeting loyal customers and rewarding them, you can capitalize on less engaged customers. By sending marketing campaigns at optimized moments in their journey, you can reduce customer churn rate and improve marketing ROI. 

If you’re still wondering why you should segment, those results are just the beginning. 

What are the benefits of customer segmentation?

You will quickly learn that the benefits of customer segmentation positively affect your customer as well as your business. 

Firstly, it is the easiest way to personalize their shopping experience.

A Segment survey found that 71% of customers are frustrated that their online experience wasn’t more personalized. Consumers are craving connection and an elevated shopping experience, and segmentation does this for you automatically.

Not only does segmentation improve customer experience through personalization; it improves your revenue. 

Take sustainable European shoe brand Yuccs. They use Marsello to create powerful email marketing campaigns that engage different customer segments and increase conversions. In just a year and a half of targeting different segments, Yuccs increased email marketing revenue by a whopping 1,733% (yes, really). 

Those benefits speak for themselves!

Defining your customer segments

The first step of successful customer segmentation is defining your customers. Where are your customers in their buyer journey and what do they want? This will help you to personalize their experience and maximize the effect of segmentation.

1. VIP Customers

You can probably already identify your VIP customer segmentation. 

Creating a VIP loyalty program not only rewards your best customers; it also makes it easy to segment them. 

Carolina Lifestyle is a perfect example of targeting loyal customers. They are a lifestyle and fashion brand with an incredibly generous loyalty program (members automatically get 200 points just for signing up!). 

Because they have a loyalty program that defines their most loyal customers automatically, they can send targeted campaigns. They send customers emails relating to their loyalty program, as well as beautifully designed One-off Campaigns to keep their customers up-to-date. 

And it works – the company’s average customer lifetime value (CLV) is $716.94, and about a third of Carolina Lifestyle's customers return to shop again within two months.

If you haven’t started segmenting your loyalty program members and other customer groups, this is your sign to start now.

2. At-risk customers

At-risk customers are your customers who haven't purchased recently. They are at risk of “slipping away” and forgetting about you. 

Because they have already purchased from you (i.e. you are not acquiring a new customer) it is worth your time and money to target this group specifically. 

Identifying at-risk customers is also important because it is easier to win them back now rather than wait for them to become “lost” customers. 

You can identify this segment by a few factors:

• They have made a purchase before but you haven’t seen them in a while
• They visit your website a lot but don’t actually make a purchase
• They abandon cart more than once 

This can be frustrating, but not all is lost! We will show you below how you can get these customers coming back.

3. Lost customers

Lost customers are people that made a purchase but have completely fallen off your radar. 

Firstly, don’t feel bad. Churn rates in the retail industry are about five to seven percent per year. Some customers will naturally fall off. 

However, it is still more cost-effective to win this customer segment back than bring in new ones. 

This particular segment can be tricky. It’s not like a new customer who saw your product and it wasn’t what they wanted. If they have purchased in the past and aren’t now, it might mean that you are no longer meeting their expectation in some way!

Like all customer-focused strategies, you need to put their needs first when you are trying to win them back.

How to keep each of these customer segments coming back

The best part about customer segmentation is that it encourages customers to come back. Repeat customers spend 33%, so these strategies are worth the effort. 

1. Include tiered loyalty for VIP customers

One of the best customer segmentation strategies is to leverage your loyalty program. You should always be rewarding the customers who already know, like, trust and rave about you! 

A tiered loyalty program matched with segmented marketing is the ultimate combination for targeting engaged customers. 

Let’s look at an example of VIP customer segmentation. 

T.C. Elli’s uses segmented SMS marketing to target their Best, Loyal, Promising, New, and At-Risk customers. However, they take it one step further and segment their loyalty program customers called “TCE Honeys”.

The T.C.E team ran a promotion that allowed shoppers to get a free item with select purchases. They sent a promotional text to their “Best,” “Loyal,” and “Promising” segments to ensure that their top customers would be some of the first people who can take advantage of the deal. 

Combined with their in-store promotions and stunning email marketing, they saw a 51x ROI from their initiatives. 

Rewarding your best customers is a sure-fire way to keep them coming back.

2. Connect with at-risk customers with email marketing

Email marketing remains one of the highest-converting forms of marketing. You can make the most of your at-risk segment by speaking to them directly.

The trick is to send them a non-invasive email that gives them a good, time-sensitive incentive to come back. We promise this strategy pays off! 

For example, Yuccs shoe brand segmented their customers based on their purchase history and behavior for a Black Friday sale. Those who hadn’t purchased in a while received a different message than those who have joined the Yuccs mailing list but are yet to make a purchase. 

This strategy enabled Yuccs to connect to subscribers which engaged them in unique and compelling ways while maximizing conversions and sales. 

And Yuccs’ efforts paid off. During the week of the Black Friday campaign, the brand saw a 38% revenue boost!

3. Win back lost customers with rewards and offers

Winning back lost customers can be difficult, but not impossible. 

Like your at-risk customers, you can target this segment with a no-pressure incentive to come back.

One way to win back a lost customer is to offer them in-store points in exchange for a simple feedback survey. 

This achieves several things. 

Firstly, you can get feedback on why you might have lost them! This helps you improve your customer service. Secondly, it reminds them that you exist and that they can use points in-store. Thirdly, you can get back on their radar without asking them to make a purchase.

Final words

This is your sign to segment your customers. Not only does it increase conversion rates, but it also boosts revenue, rewards your loyal customers, and optimizes your marketing strategy by targeting existing and previous customers. 

The best part? Marsello can automatically group your customers based on their purchasing history and behavior, so shoppers are already segmented automatically, making it easy to create these targeted campaigns. There’s no time like the present to boost your revenue and loyalty programs!

Quick Links:

• • • What are the benefits of free shipping for businesses?
    • Guide for business to provide free shipping while boosting revenue
    • Final words
      
      

Free shipping rewards can be a fantastic strategy for boosting revenue in your eCommerce business. 

According to Metapak, 47% of respondents ranked free shipping as their #1 consideration for most online purchases. In comparison, 60% of shoppers abandon their carts when extra costs are added, including shipping. 

Offering shipping rewards removes friction for people that have already made the decision to purchase something. 

We’re giving you the low down on why free shipping can boost revenue and customer loyalty, the benefits of free shipping for online businesses, and the pros and cons of the different types of shipping rewards you can offer.

What are the benefits of free shipping for businesses?

Free shipping benefits are endless- if you have a strategic system for it. 

Firstly, it could end up being more cost-effective than charging for shipping. Shippit research explains why free shipping could actually save you money: 

“...offering free shipping could actually save you money. Think about it; free shipping could increase traffic to your site, lower your cost per acquisition and increase the quality of your customer; creating higher customer lifetime value…

...Or to put it another way, you will see 15-30% improvement in net profit.”

Secondly, it boosts customer loyalty. Customers love to be appreciated and surprised. Adding free shipping to your customer loyalty program or as a special bonus for your best customers will only create more loyalty to your brand. 

Other benefits of free shipping include:

• Increasing per-purchase order price by up to 90% when setting a spending threshold 
• Reducing the number of lost conversions due to “unacceptable shipping costs” 
• Motivating 9 out of 10 shoppers to shop online when free shipping is offered  

Keeping customers happy- 73% of customers want to see free shipping at checkout!

Guide for businesses to provide free shipping while boosting revenue

To create a free shipping program, there are a few things you need to be successful. If you offer it too liberally, you will lose revenue. However if you don’t offer it enough, you lose opportunities to reward loyal customers. Here’s what you need to do instead! 

1. Set a minimum purchase amount

A strategy you have probably seen is to offer free shipping on orders over a certain amount. 

Red Door research shows that orders increased by 90% when a free shipping threshold was offered (e.g. “free shipping on orders over $75”). 

This works for several reasons. 

Firstly, you are targeting customers who are already in the process of buying from you. If they put something in the cart and then see a pop-up that tells them they are X dollars away from free shipping, you will see amazing conversions (like the Red Door study above). 

Secondly, you can usually absorb the cost of shipping because the cart value increases significantly. 

The pro of this approach is that it is super effective for increasing cart values. The potential downside is that free shipping is not considered an exclusive reward for loyalty. 

2. Offer free shipping with an annual loyalty membership

The best thing about rewarding loyal customers is that they become even more loyal. So why not offer eCommerce free shipping with your online loyalty memberships? 

If you have a loyalty program, there are several ways you could offer this. For example, it could be an exclusive reward for your top-tier members (i.e. customers who have a certain number of points). It could also be available to anyone who is in your membership. 

Smack Bang is a dog treat boutique where you can see this in action. They have a list of rewards that members can earn, including up to 20% off and generous free shipping.

Shoppers clearly love participating in the program. Smack Bang has a 100% loyalty engagement rate and so far members have collectively earned over 300,000 points!

3. Provide free shipping tiered approach which provides rewards based on purchase value

One way to give out shipping rewards is to create customer tiers based on how much they spend. This both rewards your most loyal customers and makes free shipping exclusive. 

The simplest way to do this is to implement a loyalty program. Loyalty programs are a powerful customer retention tool, and you can create a top-tier customer experience for your biggest spenders. 

A prime example is the streetwear brand, Federation +. Their online and in-store loyalty program creates an inviting and easy way for customers to earn points and incentivizes customers to shop more by offering generous loyalty tiers.

Customers can easily exchange points for free shipping rewards (and other amazing bonuses like discounts and free products!). They have silver, gold, and platinum tiers that all encourage customers to remain loyal and take advantage of free shipping and other bonuses.

The clear positive of this strategy is that it makes your most loyal customers feel appreciated. Meanwhile, the con is that you need to have a certain revenue threshold to absorb the shipping costs. 

4. To continue engagement offer limited-time free shipping

To boost revenue fast, you could run a limited offer on free shipping. 

Human psychology shows us that urgent situations force us to make decisions instantly. You can use this to your advantage with free shipping offers.

For example, Merrell NZ celebrated the global brand’s 40th birthday by offering free shipping on all orders for a limited time. With a 15% repeat purchase rate and an average purchase frequency of 3.5x, you know that they must be doing something right with their email marketing! 

Limited time offers are also great for at-risk customers. 

These are customers that have already purchased but you haven’t seen them in a while. Offering something great like free shipping for a limited time can be enough to entice them back. 

One of the downsides to the limited timeframe of this approach is that you only get a cash injection, not long-term benefits. But on the plus side, it demands action from your customers!

5. Increase signups with free shipping on first order

Incentivizing email newsletters and loyalty membership sign-ups is invaluable for increasing customer lifetime value. You can use free shipping as a way to increase these signups.

This is a super simple way to win over people who need to cross the know-like-trust threshold. 

Pros of free shipping on sign-up: You can grow your list of new customers and then segment them once they have made a purchase with free shipping. You are also rewarding them off the bat. Cons? You have to absorb the cost and these customers might not have as much buy-in as customers who buy without the free shipping incentive. 

6. Build trust with free returns

Offering free returns can help build trust with your customers. According to UPS, 68% of online shoppers check your return policy before buying. 

Good return policies are usually a good indication of good customer service. It shows your customers that you care about them and believe in the quality of your product and their experience. 

If you are going to offer free returns, there are a few things you should remember: 

• Make your returns policy super clear for people when they are purchasing 
• Create an FAQ page 
• Decide what your guidelines are for free returns- is it no questions asked? Is it exchanges only? 

The drawback of this policy is that there is always the potential for customers to take unnecessary advantage of it. However, the positive side is that you build trust and credibility, and remove a big hesitation for someone shopping online. 

Final words

This is your sign to segment your customers. Not only does it increase conversion rates, but it also boosts revenue, rewards your loyal customers, and optimizes your marketing strategy by targeting existing and previous customers. 

The best part? Marsello can automatically group your customers based on their purchasing history and behavior, so shoppers are already segmented automatically, making it easy to create these targeted campaigns. There’s no time like the present to boost your revenue and loyalty programs!

Quick Links:

• • Common traits of brands with best loyalty programs
  • Examples of brands with stand-out customer loyalty programs
  • Final words
    
    

Ever wondered how other brands are killing it with successful loyalty programs? Don’t worry; we hear that all the time. 

Customer loyalty programs are ingenious marketing strategies that help businesses increase customer retention and boost revenue creatively. They mix rewards with brand interaction which improves the customer experience overall. 

Successful loyalty programs serve both customers and your business margins. Win-win! 

We’ve done the research, and there are a few common traits that all the best loyalty programs have. Want to be one of them? Keep reading

Common traits of brands with best loyalty programs

The most successful loyalty programs all feature similar traits while simultaneously managing to stand out to their customers. Let's dive in and break down some of these.

1. Simplicity for customers
One essential trait of a good customer loyalty program is simplicity. 

57% of internet users will not recommend a business if the website is poorly designed. The same applies to your digital loyalty program!

The aim of using customer loyalty software is ultimately to help the customer. If you prioritize being clever over clear, you will lose people along the way. 

Design features you might want to think about for your loyalty program include:

• • Seamless integration between your online and physical stores/POS so customers can redeem rewards no matter where they shop
  • Single Sign-On option so returning customers can quickly log in from any device
  • Apply discounts automatically if they qualify (e.g., discount for spending a certain amount) 
  • Make your website or app extremely mobile responsive (85% of adults think that a company’s mobile website should be as good or better than desktop). 
    
    

2. Desirable mix of great experience and good rewards

Reward programs provide a huge benefit to your sales. However, the top loyalty programs prioritize excellent customer experience and great rewards. 

You want your customers to be EXCITED to shop with you! You want to motivate specific customer behaviors by automatically rewarding points for purchases, referrals, product reviews, and social media activity. 

Any time they shop or interact with your brand should be an opportunity to connect.

For example, the size-inclusive lingerie brand Our Bralette Club (OBC) offers both discounts and freebies with their loyalty program. OBC’s customers can use their rewards to score great deals (like $10 or 20% off entire purchases), or they can opt to get cool freebies like pocket mirrors and tote bags. 

The results speak for themselves. By creating little enjoyable moments with freebies and discounts, OBC increased their revenue by 278% through their program members alone.

3. They have an emotional connection with the brand

Inviting customers to connect to your brand emotionally is a powerful marketing strategy. Not only does it add to the customer experience, but it also creates customer buy-in. They want to support you and tell everyone about you. That kind of referral is every business owner’s dream!

And psychology backs this up. According to PsychologyToday, customers are more likely to connect with the emotional parts of ads than the written parts. The most effective emotions to use are things like happiness, the feeling of friendship or inclusion, and inspiration.

Big-name brands like Nike are stand-out examples of businesses using an emotional connection to appeal to shoppers. Nike uses cleverly developed phrases to connect to customers’ feelings of pride and leadership with slogans such as “the first ones” and “just do it”.

One clever way to create emotional buy-in is to name your loyalty program members. It makes people feel like they are “part of the club”. For example, Our Bralette Club uses a play on slang to playfully name their program the Peach Party, and international outdoor-wear brand Northface calls its loyal customers the VIPeaks.

How can you use a loyalty program to create a sense of connection and inclusion?

4. Strong communication with the customers

One of the loyalty traits for top customer programs is to stay in touch.

To be top of mind, you need communication to be timely and straightforward. A great marketing strategy will communicate the following with customers:

• • when there is an exciting event or sale on
  • when they have just bought something
  • to stay in touch and add value.

A combination of all three will mean you can stay in their minds.

In action, communication with your loyal customers might look like this:

1. You send out an email to promote a special members-only sale and remind members that they can use their loyalty points.
2. Once they have bought something, send another email to thank them and update them on how many points they earned with their recent purchase (the best time to touch base is right after they have purchased).
3. Send them an update with their total points balance and add more value to the message by including deals such as a new member-only product or an exciting email related to your niche.

Did you know that you can seamlessly automate all of your customer touchpoints, email campaigns, and loyalty notifications with Marsello?

5. Digital optimization is at the forefront of their strategy

You need to optimize your online presence now more than ever. 

A clunky mobile browsing experience could be hurting your business more than you know. No matter how good your product, business, or marketing strategy is, you could lose up to 80% of shoppers who leave bad mobile sites. Remember, consistent branding and good user experience matter!

Successful customer loyalty programs focus on user experience as well as product development and sales.

For example, New Zealand-based dog treat boutique Smack Bang has a beautiful brick-and-mortar store. However, they also use Marsello for their simple, eye-catching customer loyalty widget. It is easy to use, encourages customer behavior by telling them exactly how to earn points, and is 100% on brand with their colors. 

Customers can easily spend points online and in-store, and Smack Bang sees 100% engagement with their loyalty program. By ensuring that they have a loyalty program connected to their eCommerce and brick-and-mortar stores, the team at Smack Bang can provide their customers with a consistent, rewarding shopping experience no matter where they shop. And that bonus of earning seamlessly across all sales channels also helps protect Smack Bang Big-name in the event of more lockdowns as customers reap the benefits even while shopping from home.

6. They do not treat customer interactions as transactional

Customer loyalty programs do precisely that – they build loyalty. They help foster interactions with customers that aren’t just transactional. That’s what sets successful loyalty programs apart. 

So how do you do this on an individual level while still scaling? Doesn’t it cost a lot to put a lot of time into customers individually? 

Actually, improving customer service and experience might be MAKING you money. There are a lot of long-term benefits of growing lifetime loyalty and adding extra touchpoints to make sure your customers feel appreciated. 

For example, Forbes suggests that to improve interactions, you should be personalizing experiences wherever possible. They also suggest letting customers define how they want to interact with you rather than pushing it on them. 

Instead of pressuring people to join your loyalty program, create something fun and desirable that invites them in. This is all part of creating a thriving community around your brand!

Examples of brands with stand-out customer loyalty programs

Let's take a look at a few established brands that have really found their feet with loyalty marketing.

1. Merrell NZ’s loyalty program builds long-term relationships with customers

Internationally renowned outdoors brand, Merrell, has a strong presence in New Zealand, with the NZ chapter of their business operating as the longest-running distributor of Merrell’s products. In the wake of COVID-19, Merrell NZ’s marketing team knew they needed to bolster eCommerce sales and maximize customer loyalty. 

After creating a solid foundation using Marsello to power their email marketing strategy, Merrell NZ developed a tiered loyalty program to elevate customer experience, build meaningful relationships with shoppers, and foster a team of brand ambassadors. 

With three tiers, emails promoting their loyalty program, and inviting earn and rewards options, Merrell NZ’s customers have welcomed the loyalty program eagerly. 

José, sales and marketing manager at Merrell NZ, had this to say about their new loyalty program:

“[…] the Merrell Rewards program powered by Marsello means a lot to us – it gives us the opportunity to link customers from our retail and web stores, work around customer retention and automate email marketing flows in a really clever way.”

In the first month since launching the Merrell NZ VIP loyalty program, they saw their VIP customer list grow to 123 members! Customers are also turning around a 15% repeat purchase rate and an average purchase frequency of 3.5x, which just goes to show that Merrell NZ’s customers are already proven loyal regulars.

It’s no wonder that Merrell’s customers feel welcomed into the brand’s community; their loyalty is rewarded with enticing rewards and engaging communications about causes that interest them!

Read their whole story to learn more about Merrell NZ’s marketing.

2. LEGO Certified Store’s customer-centric approach to loyalty rewards

When looking for loyalty program inspiration and reward development, look no further than LEGO Certified Stores (based in South Africa).

Whether shopping in-store or online, customers earn 1 point for every R 1.00 spent. They can then redeem their points for cash-back and exclusive gifts that encourage customers to shop time and time again!

It’s no secret that the LEGO community is internationally dedicated! With somewhat of a cult following, LEGO is no longer considered just for children, and LEGO Certified Stores’ loyalty program helps them build customer relationships for the long term.

Through combining their loyalty program and other marketing efforts, LEGO Certified Stores build a community around their brand and connect their customers through LEGO.

One thing has remained essential for the LEGO Certified Stores team: seamless customer experience no matter where they shop. They had this to say about their Marsello-powered loyalty connected across both their Shopify and Vend-powered stores.

"Marsello offers a single integration into our POS and online store for our email database. The nature of our retail offering revolves heavily around our loyalty program and the exclusive gifts that customers can redeem from us. Marsello made the most sense as it offers a single loyalty program that extends to customers online and in-store. We have many customers that shop with us in both channels and expect a seamless loyalty and marketing experience."

Read LEGO’s full customer story here to learn more.

3. bCODE’s point promotion campaigns encourage customer engagement and buy-in

When looking for a stand-out loyalty promotion strategy, look no further than Nigerian shoe brand bCODE!

The launch of any marketing campaign can feel like a daunting task when so much often hinges on its success. When bCODE expanded their loyalty program from just their brick-and-mortar store and launched it online, they knew they needed to do so with a bang!

What better way to do this than offering customers double points over launch weekend and promoting the offer through emails and social media?

With a spend threshold and a set time frame, bCODE (then known as THE BCODE) encouraged increased sales, loyalty program sign-ups, reward redemptions, and more! In fact, just before they sent the above email (with a captivating GIF included), bCODE encouraged customer sign-ups by sending an email campaign that detailed how shoppers could sign up to the newly expanded loyalty program and earn points in the lead-up to the weekend’s promotion. 

After launching their double points campaign, bCODE saw an astounding 94% increase in loyalty points spent, and over one year later, their loyalty program is thriving both in-store and online!

Read bCODE’s customer success story.

4. Anna Beck’s inviting loyalty program entices all types of customers

The team behind well-loved designer jewelry brand Anna Beck knows that a low barrier to entry is one of the fastest ways to encourage loyalty program sign-ups and grow customer loyalty. When they developed their loyalty program, they kept it simple, beautifully on-brand, and undeniably enticing. 

As soon as customers join, they are rewarded with a 10% discount. And within their next shop, they can earn their next reward – a free cleaning cloth. By generously rewarding customers early into their brand experience, Anna Beck creates gratifying customer experiences that build loyalty from the earliest stages. Those customers are then much more likely to remain loyal and even become vocal brand ambassadors.
 

“​​Through the data, we’ve found that we have incredibly loyal customers. Once they make their second purchase, they are highly likely to be lifelong customers. Marsello allows us to easily reward those loyal customers for sticking around; it was a no-brainer. Anna Beck has only been an online retail brand for a handful of years, and a loyalty program was the natural next step.”

We’ll let you in on a secret, too: Anna Beck experimented with including tiers into their loyalty program but decided that keeping it simple was best for their brand. Experimenting, looking at the data, and then drawing data-driven conclusions that best benefit your business is an essential part of marketing success. There’s no one-size-fits-all approach to customer loyalty, and we love that Anna Beck was able to find a loyalty program design that suits their business and delights their customers. 

Interested in learning more about Anna Beck’s marketing?

Final words

The number one similarity between successful loyalty programs is a customer-first approach. Keeping it simple, branded, and customer-centric will naturally benefit your revenue as much as your customers. Put them first and you will reap the rewards organically.

Looking for an easy way to reward your customers? Marsello is the all-in-one software for simple in-store and eCommerce loyalty programs! 

Quick Links:

• • • Why is it important for businesses to build brand awareness
    • How to drive brand awareness with customer loyalty
    • Final words
      
      

Building brand awareness online is harder than ever. How can you stand out in all the noise? Easy.

You get your loyal customers to build brand awareness for you.

Referral marketing has a conversion rate 3-5 x higher than any other form of marketing. If you are not leveraging customer loyalty software to drive referrals, reviews and bonuses, you are leaving money on the table.

Using a combination of content marketing and investing in your biggest fans will help your brand awareness skyrocket.

Why is it important for businesses to build brand awareness

It is easier to sell to people that already trust your brand. They have already crossed that first threshold, experienced your products, and enjoyed the journey they’ve had with your store so far! Brand awareness builds this trust faster, encourages connectivity, and increases ROI.

Let’s break this down with the following concepts:

1. Brand awareness builds customer trust

All you are doing is building familiarity. If someone is choosing which brand to buy, they are more likely to choose something they recognize and know something about. 

You can build that trust and brand awareness by 

• • • Having a consistent presence online and in-person
    • Putting a face on your brand or product 
    • Telling your brand story 

Using social proof from existing customers (people trust other people for reviews over you!)

2. Brand awareness helps your audience to associate and relate to your brand

Brand association is when people can easily bring your business and its traits to mind. This is powerful in growing your brand awareness because ultimately people associate this with high-quality, go-to brands. 

Think of Apple products for example. When you think about their brand, some of the traits you might associate with them are:

• • • Innovation 
    • Sleek
    • High quality/exclusive 
    • Favored by creatives

This is the power of positioning. How customers feel when they think of your brand is just as important as sales and marketing strategies. This is why brand awareness is important for your business growth as a whole.

3. Brand awareness builds brand equity

Brand equity is the increased revenue a business makes when it has a recognizable name or value. 

You probably already know what brand equity is in practice. 

Say you are in a hurry in the supermarket. Brand equity is the reason you automatically choose Pantene shampoo over something name-brand even if it costs a lot more. You associate the brand with salon-quality and shiny hair (you know the kind of ad we are talking about!). 

Building brand awareness is directly tied to brand equity. It increases brand loyalty over competitors. 

There are three components of brand equity that you should consider when building brand awareness: 

• • • Brand perception - This is what customers believe about you, not what your marketing says. Is it luxury? Fun? Accepting? Worth the price? This comes down to branding and positioning  
    • Positive or Negative Effects - Whatever customers believe will either help or harm your bottom line. Does their perception make them excited to spend money with you? Are you tracking Net Promoter Scores?
    • Value - Positive effects will bring value to your business. This is both in the form of revenue, as well as further positive brand perception.

In other words, brand perception + positive effect = value for your business.

Those three components determine whether revenue is going up because customers are choosing you over other companies due to your perceived higher value.

How to drive brand awareness with customer loyalty

So how do you ensure that your customer loyalty program will continue to drive brand awareness and business growth? 

1. Reward existing customers for referrals

The best way to market your online business is to get raving fans to do it for you. That’s why a referral rewards program can be so effective in raising brand awareness! 

You don’t necessarily have to run an affiliate program or use influencers. A simple points reward system can be just as effective. 

Our Bralette Club showcases this beautifully. Their Peach Party members can earn points even when they aren’t purchasing anything. By simply referring a friend, they can earn more points to spend in the store. As well as this, they encourage social media engagement and sharing which deepens brand ambassador relationships even further.

The best part is that it is not just beneficial to reward existing loyal customers. The people they refer to you? They are 18% more loyal than customers you get from any other type of marketing.

2. Leverage the benefits of social media

Social media might feel overwhelming and saturated, but it is still the best way to build brand awareness.

A Clutch survey also showed that 58% of customers agreed that they would choose to share their positive brand experiences on social media. A brand awareness strategy would be encouraging them to tag you!

Leveraging social media allows you to entertain and interact with customers. It helps to create a community around your brand. Don’t forget, customers remember the way your brand makes them feel. Being present on social media gives you a platform to position yourself in their minds. 

Tips for building brand awareness using social media:

• • • Use a consistent branding “voice” 
    • Show PEOPLE - customers using your product, staff doing work behind the scenes, use people in your product photography 
    • Engage with followers, don’t just ignore messages or content they share. Set up a loyalty program or giveaway that rewards them for sharing and engaging on social media  
    • Have a team member that is dedicated to customer service. Make it easy for people to ask questions - sometimes, that means answering a few direct messages on social media instead of the help desk.

3. Use content marketing in your brand awareness program

Effective brand awareness isn’t just about telling people to “buy this thing”.

It’s about community building. It’s about interacting with customers and their interests.

That is why content marketing is so important.

There is currently a huge shift towards video marketing and “infotainment”, especially on social media platforms. This is where businesses are getting in front of customers in a way that both entertains and educates them about their product or niche.

Say you had a business that sells candles and homeware. You wouldn’t just tell people to buy a candle.

Using content marketing (and a deep understanding of your audience), you could create content like how to make a magazine-worthy lounge, and how to reuse old candle holders. A vegan protein powder business might share recipes for healthy protein cookies and smoothies.

It lets your customers interact with you even when they’re not buying.

To build even better brand awareness, encourage user-generated content (UGC). UGC is any photo or review of your product in action. It doubles as social proof because new customers can see other people using your product. 

4. Encourage customers to provide reviews about your brand

The hard truth about marketing? Your customers will do it better than you ever will. 

That’s why reviews and social proof are so important in brand awareness. 

Luckily there are ways that you can organically encourage customers to provide reviews about your brand:

• • • Make it part of your loyalty program where they can earn points for writing reviews
    • Set up automatic email campaigns that ask them for reviews right after they purchase (directly after purchase it is a valuable window!)
    • Be active on social media and encourage people to tag you when they use or talk about your products so you can share them on your platforms 
    • Set up a referral or affiliate program that rewards them for telling people they know.

5. Surprise your loyal customers

Want a fail-proof customer loyalty strategy? Surprise your most loyal customers. 

Let them know that you appreciate them and their loyalty. 

One way is to use the “Taylor Swift” strategy. Even though she has hundreds of thousands of fans, she will often respond to requests to sing at weddings for example. Does she make money from this? No! But her fans are obsessed. 

Here are a few creative ideas to surprise your loyal customers:

• • • Send handwritten thank-you notes 
    • Create a secret branded product just for them and send it out with orders for free (e.g. shirt, stickers)
    • Over-deliver so that they want to talk about your brand even more 
    • Take note of the little things - do they have a favorite tea brand? Have you had a conversation with them about what product they would love to see in your store next? 
    • Share their content even if they’re not paid influencers 
    • Send birthday notes and bonuses (super easy if you have customer loyalty software like Marsello).

Find ways to budget in rewards for your most loyal customers. 

6. Increase the brand reach and awareness with advertising

If you have a product-based business, you will probably run paid advertising at some point in your marketing strategy. Advertising, especially on social media, has the potential for huge reach to new audiences and customers.

Again, it is about building familiarity. That way when your target market eventually goes to buy, and your brand pops up as an option, they are already aware that you exist.

Tips for online and social media advertising for brand awareness

• • • Make sure you have a product that converts before throwing money into social media advertising 
    • Pair it with an organic social media and evergreen content marketing strategy 
    • Run awareness campaigns first to gather target market pixel data before selling directly.
      
      

Advertising can support an already amazing loyalty program strategy. For example, when outdoor apparel brand Merrell NZ launched their loyalty program, they used their omnichannel loyalty program to promote their new rewards system through emails. They announced how they planned to give back to existing amazing customers and how people could become part of the community.

Using a combination of email marketing, social media and paid advertising can all skyrocket your customer loyalty and awareness.

7. Give your brand a personality

To build brand awareness you need to connect emotionally with your audience. Giving your brand a personality can solidify your brand in their minds!

A great example of a brand personality is the Australian health-food brand Botanika Blends. 

Not only do they have high-quality products, but they also have colorful, playful wizard motifs that are worked into all of their branding. Their wizard is extremely recognizable and pops up everywhere on their website, marketing, and even order confirmation emails. 

Examples of giving your brand a personality to build brand awareness: 

• • • Naming your customers/audience/community 
    • Branding your loyalty program 
    • Have an engaging social media presence that people want to tag you in
    • Share content that isn’t just about selling products 

Take advantage of using real people in your content- people are more likely to remember faces than brand names so use people to stand out!

8. Continually measure your brand awareness progress

Building a memorable brand is continuous. You can’t just “do it once” and expect results! 

That’s why it is important to use some form of brand awareness measurement. 

• • • Are you tracking loyalty member sign-ups? 
    • Do you have a referral or affiliate program that loyal customers can market for you? 
    • Do you have a centralized platform that automatically tracks campaign progress?

Successful loyalty programs are in it for the long haul. 

Final words

Building brand awareness builds trust, loyalty, and a business that customers can connect with emotionally. Not only does it increase customer loyalty, but it will encourage customers to refer people they know and drastically increase your marketing ROI. 

Marsello’s customer loyalty software and marketing automation make brand awareness effortless for retail and hospitality businesses. Start building brand awareness and customer loyalty with Marsello’s all-in-one marketing platform.

Quick links:

• • • How do loyal customers help with business growth

    • Why is it important to have a strong VIP program

    • How to convert your regular customers to VIP’s

    • How to create repeat customers with a loyalty program

    • Final words

A rewards program is anything that you use to motivate customer behavior. A VIP loyalty program elevates that strategy by making customers feel special! 

Rewarding your customers is the fastest way to build brand awareness. Loyal customers contribute to the most sales, refer more new customers than any other type of customer, and actively market your brand for you. 

A VIP loyalty program gives your business a structured way to reward loyal customers. Using strategies like outstanding customer service, personalizing your marketing segments, and connecting with your customers, you can give back to your most dedicated fans and drive profitable repeat sales.

How do loyal customers help with business growth

Loyal customers grow your business because of something called the Pareto Principle. Also known as the Law of the Vital Few, this theory states that80% of your sales generally come from 20% of your customers. That 20% are usually your most loyal and regular customers. 

From a simple ROI perspective, this is where you want to put your money. 

Not only do your top 20% of customers contribute to 80% of your revenue, they also drive referrals. 

A 2015 study showed that 83% of people would trust a recommendation from people they know. As well as this, shoppers who existing loyal customers have successfully referred have a 37% higher customer retention rate and have a 25% higher lifetime value than other customers. 

Investing in your loyal fans with some kind of VIP program is invaluable. 

Why is it important to have a strong VIP program

Building a VIP program into your sales strategy is the easiest way to reward loyal customers. 

It is also a great way to create NEW loyal customers. That’s because you are making a direct correlation between people engaging with your business or product and getting a positive reward. You are incentivizing actions that are typical of loyal customers. 

Successful VIP programs:

• • • Are simple to join 
    • Are easy to understand (i.e., customers know exactly how to earn points or move between tiers) 
    • Have a branded community built around it with branded tiers in the loyalty program 

How to convert your regular customers to VIP’s

So how do you strengthen your customer relationships enough to create vocal brand advocates and lasting loyalty?

1. Deliver outstanding customer service

The best VIP rewards in the world won’t drive repeat customers if you have terrible customer service. 

In fact, according to Microsoft, 54% of consumers globally say that they have higher customer service expectations than they did in 2020. 

If you have to choose where to spend your yearly budget, you could put just about all of it into customer service for your most loyal customers. A person with a positive Net Promoter Score (i.,e. they would promote your business to their friends) has a lifetime value of up to 1400% more than someone who wouldn’t promote your business. 

2. Identify your customers that provide value

Your long-term business strategy should obviously include bringing in new customers. However, identifying your Most Valuable Customers (MVCs) is just as important. 

Your MVCs are the ones who order frequently and have a higher value per order. In other words, your loyal customers. You probably know that it is more cost-effective to retain customers than acquire new ones. Who are your existing VIPs? 

Here’s what bespoke jewelry brand Anna Beck had to say about finding their MVCs: 

“Through the data, we’ve found that we have incredibly loyal customers. Once they make their second purchase, they are highly likely to be lifelong customers. Marsello allows us to easily reward those loyal customers for sticking around, it was a no-brainer. Anna Beck has only been an online retail brand for a handful of years, and a loyalty program was the natural next step.”

Some of the ways you can identify your Most Valuable Customers: 

• • • How often do they purchase 
    • How much they purchase in each order compared to your average customer 
    • What their overall lifetime value is- you’re looking for people that spend the most overtime, not a one-time big hit, and then never come back 
      
      

3. Use hyper-personalization for your target users

Marketing automation is the fastest way to personalize customer experience while still scaling. Research from Accenture showed that “33% of customers who abandoned a business last year did so because personalization was lacking”. 

Ways that you can start personalizing your VIP customer experience: 

• • • Create an automatic email sequence for new members 
    • Send product recommendations based on their previous purchases using segmentation 
    • Send VIP members special surprises or freebies on their birthday
    • Save abandoned carts 
    • Run a tiered loyalty program that lets them unlock exclusive rewards 

The best part? All of this can be done through the Marsello platform! 

Hyper-personalization makes it even easier to target VIP customers who are most likely to buy anyway. 

How to create repeat customers with a loyalty program

The cornerstone of loyalty success is repeat customers – so how do you keep your customers coming back time and time again, and how do you reduce that repeat purchase cycle?

1. Give something in return to your customers

You can start driving repeat customers by giving them something in return. 

The easiest way to start? Create a reward points system. This is where customers earn 1 point for every $1 they spend (as a simple example). Once they reach a certain threshold, they can exchange it for a reward. Consider building a VIP loyalty program model into your loyalty program too; this way loyalty members can accumulate points or spend thresholds to move up to the next tier and see increased value with each engagement with your store. 

For example, the Evermore Toys loyalty program gives their customers $10 for every $100 they spend. This simple yet elegant system of giving back to customers resulted in 156x ROI.

No matter what your VIP rewards program is, it must be customer-centric. 

2. Connect with your customers beyond purchase

Connecting with your customers looks like community building, strategic email marketing, and content marketing. This achieves two things (besides giving you more small opportunities to engage with customers online). 

Firstly, it increases brand awareness. 

Content marketing and email workflows keep you top of mind even if you are not selling directly. Your online presence also contributes to the feeling of a community, especially if you refer to your VIP members specifically. 

Secondly, it encourages repeat customers. 

For example, signing up for your VIP program might trigger an automatic email marketing sequence. If product recommendations in the first email don’t motivate a purchase, automatically follow it up with an exclusive discount just for them.

Footwear brand Merrell NZ does exactly this. 

They aim to create community through the communications they produce by linking their loyalty members and email marketing list to local events, thought leadership articles, and engaging topics. 

They also communicate through social media to further develop these relationships and encourage customer engagement in events that are particularly relevant to the likes of hiking, outdoors, sustainability, and socially progressive causes.

By combining their loyalty program with an effective email marketing strategy, they developed brand awareness, loyalty, and customer buy-in. 

3. Turn your customers into brand advocates

Turning existing customers into brand advocates increases revenue without increasing your marketing budget. So how do you get people to talk about you? 

Running a VIP program makes customers feel seen and appreciated. That’s the first step for creating brand advocates. You can even give them store points in exchange for sharing or engaging on social media. 

Next, create excitement around launches or events. This gives them things to talk about on social media or in their network. 

If you have an active social media presence, make sure to share content that they tag you in! User-generated content is excellent social proof for curious followers.

Lastly, provide an outstanding product or service. Customers will be thankful to have a product they can count on and will naturally want to shout about it. 

Want an impressive example of customer engagement? Go check out what Our Bralette Club is doing with their community. 

Not only did they have a reward redemption rate of 71% in 2020, but they are also extremely active on social media to deepen relationships with their biggest fans. That’s how you turn customers into advocates. 

4. Provide opportunities to incentivize your customers

Incentivizing isn’t just about buying more. You can create multiple opportunities for customer incentives. 

That’s because loyalty programs are all about motivating particular behaviors that grow your business. 

Examples of ways you can incentivize your customers by rewarding points:

• • • Sharing or tagging you on social media
    • Referring a friend or family member 
    • Signing up to be a member
    • Signing up to your email list 
    • Following you on social media 
    • Surprise them with points on their birthday. 

The lingerie brand, Our Bralette Club lets customers earn basically every time they interact with them. Join the club? Reward. Make a purchase? Points. Collect 1800 points? Enjoy 15% automatically! 

This is a stand-out approach that helps to keep OBC’s loyalty program fresh and engaging. 

5. Provide rewards in the form of experiences

You don’t just have to give VIP members discounts or points. You can also use experiential customer rewards. 

Experiential rewards are just that- they give customers something they can experience. It creates a long-lasting emotional connection, creates life-long brand advocates, and rewards your high-spending, loyal customers. 

For example, Sephora’s Beauty Insider Community is a tiered loyalty program. If you are in their “Rouge” top tier, you don’t just get discounts and free shipping. You also get first access to new products, free samples, exclusive beauty events, and meetups. 

Experiential rewards help you go above and beyond for loyal customers. 

Final words

Building a VIP loyalty program creates a feeling of community, rewards your loyal customers, and builds brand awareness. If you are looking to improve your marketing ROI and lifelong customer loyalty, use Marsello to create a VIP loyalty program that benefits both you and your customers. Marsello is the ultimate all-in-one loyalty program software, perfect for eCommerce, in-person stores (or both!).

Quick links:

• What is a tiered customer loyalty program?
• What are the benefits of a tiered loyalty program
• Strategies to create a successful tiered loyalty program
• Tips for an effective tiered loyalty program
• Final words

Loyalty programs keep customers coming back using rewards and referrals. But what about tiered loyalty programs? What makes them so uniquely effective for engaging customers and boosting revenue? 

Tiers prove value to customers throughout their entire customer journey which means that you are consistently enticing customers back.

Consumers who engage with high-performing loyalty programs are 78% more likely to spend a premium. So the more you reward people, the more loyal they will be! 

Let’s dive into what a tiered customer loyalty program is, why it is so effective, and tips for implementing a tiered system in your own business. 

What is a tiered customer loyalty program?

A tiered customer loyalty program is a customer incentive strategy that rewards people the more they spend. Once a customer spends a certain amount or earns a certain amount of points, they move up a level. 

This could look like a “bronze, silver, or gold” membership, or something like a regular membership versus VIP membership. 

But how does a tiered loyalty program work? 

You have probably seen examples of this with airline frequent flyer programs. The more customers spend with a single airline, the more points they accumulate. When they move up, they are then rewarded with bonuses like access to lounges and priority boarding. 

A tiered system gives more rewards to people higher up to encourage loyalty and higher spending. 

You may not have a VIP airport lounge, but your business can still take advantage of a tiered loyalty program!

What are the benefits of a tiered loyalty program

You might be wondering if there are benefits to using a loyalty tier instead of regular rewards. 

There are a couple of benefits of rewarding loyal customers in this way. 

Firstly,  it encourages brand loyalty because the more loyal they are, the more rewards they get. It is beneficial and exciting for them to keep purchasing from you over competitors because their customer experience is only going to improve over time. 

Look at loyalty programs like Amazon Prime. Premium members spend about double what non-members spend and shop twice as much in a 12 month period. 

The second benefit is that it encourages higher spending. When people have free “points” to use, they will come back. A gift-card study found that 59% of people spent more than they had on their gift cards. 

Incentivizing people with points and rewards means they are more likely to spend more than they intended.

Lastly, you can increase the value of the rewards incrementally. Lower tiers still have points and rewards, however, higher levels (i.e. people who spend the most with you!) could have experiential rewards as well as points. 

For example, beauty brand Mecca runs a loyalty program called the Beauty Loop. Their top-tier members get experiential rewards like surprise gifts 3 times a year, access to exclusive beauty events, and dibs on limited edition products.

Strategies to create a successful tiered loyalty program

Getting started can feel like the most daunting part of planning your customer loyalty program or adding tiers. Give yourself a good grounding knowledge with these strategies:

1. Provide clear value to customers at every level

One of the obvious benefits of customer tiers is that nobody misses out on benefits. It just gets better over time! A successful tiered loyalty program will provide value at every level.

Using the airline example again, a bronze customer might get complimentary food and drink. A silver customer might get priority boarding and free luggage allowance. A gold member might get lounge access, priority boarding, double luggage allowance, and first-class seating. 

Each tier is rewarded, which improves customer experience, which then encourages more spending and loyalty. There are clear benefits at each level that make loyal customers feel special.

2. Keep it simple for the customers

If you want higher engagement with your tiered loyalty program, you have to keep it simple. Your customers should know exactly what they need to do to qualify.

How can you creatively simplify your loyalty program? Here are some ideas 

• • • Have a visual loading bar that shows them how much they need to spend to get to the next level 
    • Display the different tiers side by side and show the different value levels
    • Don’t have too many conditions to move up each level – make it worth their time too! 
      
      

An example of a simple loyalty customer is jewelry boutique Anna Beck. Customers automatically receive 100 points just for joining their rewards program!  Since starting their points system, Anna Beck has experienced a 728.33% increase in revenue, directly attributable to their loyalty program.

Simplicity is a good rule of thumb no matter what loyalty program design you have. 

3. Brand your tiered levels

As well as having a branded community, consider having branded customer tiering.

Each level should differentiate customers and reward them for their loyalty and engagement.

You can keep it simple with a gold-silver-bronze model, or push the creative boundaries like inclusive-lingerie brand Our Bralette Club.

Our Bralette Club has a branded loyalty program called the Peach Party. That means that all customers get to be part of the community. However, they take it to the next level with their different tiers. 

They have a simple spend threshold system that unlocks new and exciting benefits for customers. Instead of just 1-2-3, they are called “Seed”, “Bloom”, and “Peach”. 

Their tiers are 100% on brand and invite customers into a fun, inclusive community.

4. Use experiential rewards for your customers

Experiential rewards are bonuses that go beyond the transaction. The goal is to exceed their expectations and give them a customer experience they won’t find anywhere else.

Online competition is fierce for loyalty programs. 44% of consumers aren’t happy with rewards programs because the bonuses feel “irrelevant”.

It’s not enough to just add discounts for something your loyal customers would probably buy anyway.  Adding experiences to your loyalty rewards program will help you stand out. 

Experiential rewards you could use for your VIP customers could be things like: 

• • • Giving access to fun, exclusive events run by your brand
    • Sending freebies on their birthday 
    • Running giveaways/competitions for similar interests 
    • Gamifying their points to spend on things other than products.

5. Blend gamification into rewards

Gamification is an excellent strategy for increasing engagement with your loyalty program. Loyalty program gamification is when you take fun, game-like elements and integrate them into the user experience.

Examples of gamification are things like earning points, random bonuses or prizes, unlocking surprise rewards, and lottery-type strategies where anyone could win if they purchased in a certain time frame. 

BCode is a great example of loyalty program gamification. After launching their double points campaign, bCODE saw exactly the kinds of results they could hope for, including a 94% increase in loyalty points spent! 

Gamification engages your customers and differentiates you from other businesses wanting their attention.

Tips for an effective tiered loyalty program

If you are going to run a tiered loyalty reward program in your own business, there are a few things you need to implement to be successful.

1. Customers come first

Of course, loyalty programs benefit your business – loyal customers, referrals, and improved customer experience all contribute to increased spend per customer.

However, if you want real engagement with your customers, they need to come first.

It may be tempting to create a tiered loyalty program that only encourages people to spend more. We promise that you will be a lot more successful and they will love buying your products if you prioritize their experience over revenue.

2. Regularly monitor results

You can’t “set and forget” customer loyalty building!

Part of putting your customer first is to regularly monitor engagement and results and make changes if they aren’t responding. A good loyalty program will have high engagement because people ENJOY spending money with you. 

To analyze customer experience and run a truly successful rewards program, you should invest in UX analysis and loyalty program software that tracks results automatically.

3. Effectively communicate with your customers

Building a loyalty program involves actually building loyalty. To do this you need to communicate with customers at every touchpoint.

This can be either passive communication or direct communication. 

Passive communication is how clearly your loyalty program is set out. 

• • • Do customers know exactly how to join?
    • Is it obvious how many points they need to get to the next level?
    • Are they aware of the benefits of moving up a level?

Take pet boutique Smack Bang for example.

When customers log in to their easy-to-read interface, it is obvious how customers can earn more points.

Direct communication is when they interact or make a purchase. 

• • • Do you send follow-up emails to ask about their experience?
    • Are you gathering feedback?
    • Do you use language that makes them feel “part of the club” and thanks customers for being loyal? 
    • Could you surprise them even if they haven’t made a purchase recently? 

The Pareto Principle (also known as the Law of the Vital Few) states that 80% of all sales come from just 20% of your customers and that 20% are usually loyal, returning customers. 

Make sure you are communicating with your “Vital Few”.

4. Have a single view of all your campaign progress

The last tip for an effective tiered loyalty program is to centralize your data. You should be able to see your campaign progress at a glance.

This is especially important if you have both online and in-store rewards. Don’t make it difficult for customers to spend points with you!

Loyalty programs can improve marketing ROI, drastically increase revenue, create lifetime loyal customers and drive brand awareness. However, you can’t take advantage of all those great benefits if you can’t easily track your campaign progress.

Final Words

A tiered loyalty program is a clever way to reward customers who spend the most. Using strategies such as gamification, effective and timely communication, and branding your tiers will guarantee higher engagement. Ultimately, giving your customer the VIP treatment will benefit your business! 

To track your campaign progress, increase ROI, and reward loyalty points with ease, try building your loyalty program with Marsello! 

Quick links:

• • • What is a rewards system?
    • 6 tips for designing a points reward system for your business
    • FAQs
    • Final words
      
      

The ultimate goal with a reward points system is to motivate customer behavior that grows your business. However, it is also a good way to build brand loyalty and reward your most loyal customers. 

The Pareto Principle (also known as the Law of the Vital Few) states that 80% of all sales come from just 20% of your customers and that 20% are usually loyal, returning customers. 

Creating a rewards program lets you focus on that valuable 20%!

If you have ever wondered 

• What a reward points system is, 
• How to set up a simple rewards program for loyal customers, and 
• How you can increase your revenue with a loyalty program

Then you are in the right place.

Related: How Mecca Built One Of The World's Best Loyalty Programs

What is a reward points system?

According to Shopify, rewarding points is the most common type of customer loyalty program. A reward points system is an incentivization strategy that increases spending through earning in-store points or credits. 

Customers earn points on their account when they purchase. They can then redeem points the next time they shop or use them for other freebies and perks. Some loyalty programs also let customers accumulate points and move from a “regular” member to a “VIP” member in a tiered program. 

Evermore Toys is a great example of a simple points rewards system. Their mission is to create high-quality toys for their customers, and they implemented an elegant customer loyalty program that increased their revenue by 738.87%.

Customers earn 1 point for every $1 they spend; when they reach 100 points they get $10 off their next purchase. Evermore Toys saw a 95% per month increase in loyalty points over a one-year period, showing that you don’t need a complicated loyalty program to get results.

6 tips for designing a points reward system for your business

To implement a reward points system for customers, there are a few key systems you need. Your business and your customers are unique. 44% of consumers aren’t happy with rewards programs because the bonuses feel “irrelevant”. So it’s worth a bit of creative strategy! 

The most successful loyalty programs are specific to your brand community and are extremely customer-focused. 

Related: 7 Steps To Building A Profitable Loyalty & Rewards Program

1. Identify the main goals of your customer loyalty program

Obviously, your loyalty points system benefits your revenue potential. However, you can do so much more with it! So the first step to a successful points system is to identify what you want to achieve with it. 

Here are a few questions you can ask yourself: 

• • • Do you want to build brand loyalty by creating a unique community?
    • Do you want to reward your MOST loyal customers by creating a tiered reward system? 
    • Do you want to delight customers with unexpected surprises? 
    • Do you want to encourage more spending or points accumulation? 
    • Do you want people to share your business on social media or get people to refer their friends? 
    • Are you going to run “points promotions” to encourage higher spending in sales? 

All loyalty programs motivate particular behaviors. When you are starting out it is best to choose just one or two goals so that you can track their progress and then build from there.

2. Determine how customers will earn the rewards

Next, you will need to determine HOW customers actually get rewards. 

You might want to keep it simple like the Evermore Toys example above. They spend a dollar, they earn a point. There’s nothing wrong with avoiding complications.

Loyalty programs also offer points for customer behavior such as

• • • Sharing on social media 
    • Earning freebies on your birthday 
    • Giving product reviews
    • Referring a friend

Take Our Bralette Club as an example. Their loyalty program members can earn points when they make a purchase, for every friend they refer, for Tweeting about the brand, and even just for getting a year older on their birthday.

Other models include tiered rewards systems. This is where members can move from regular member to VIP status once they cross a spend threshold. VIP customers could have benefits such as Double Points (every dollar is 2 points) or other bonuses like automatic free shipping. 

You will also need to consider online versus in-person shopping. Can customers earn and spend points no matter where they shop with you? Using a points reward software like Marsello makes loyalty programs completely seamless across eCommerce and POS.

3. Determine how these rewards will be awarded to the customers

Once customers have earned their points, it’s time to reward them! Do you have a system for how they can claim points? 

Firstly it is important to have a login for members where they can easily see their points program total. Seamless integration with your eCommerce checkout and POS is critical for a successful loyalty program. Don’t make your customers work for it! 

Next, identify the timeline. Can they redeem points as soon as they earn them? Will they receive a coupon or code for their next purchase? Will you send them something for free? 

Lastly, consider what form their rewards will be in. It doesn’t just have to be points they can spend in-store. 

Here are a few ways you could reward your customers in a points program:

• • • Offer secret sales for people with  a certain number of points 
    • Collaborate with other businesses to do giveaways with similar products 
    • Give away freebies when they buy multiple items 
    • Do live in-person events for your most loyal customers 
    • Offer other bonuses like free shipping or first access to new products 
    • Set up an affiliate program where they can make actual money for referring new customers 

Nigerian shoe brand bCODE has an outstanding loyalty program strategy. When they first launched their online rewards, they created a double-point promotion as well as a spend threshold. 

With their email marketing and social media campaign, they encouraged increased sales, loyalty program sign-ups, reward redemptions, and more! They also encouraged bCode customers to sign-up by sending an email campaign that detailed how shoppers could sign up to the newly expanded loyalty program and earn points in the lead-up to the weekend’s promotion.

With a 94% increase in loyalty points spent, you know they are rewarding loyalty right! 

4. Identify the value of your rewards

If customers earn points-per-dollar, you will need to identify the value of your rewards. You can categorize rewards from low to high value based on how loyal customers are. 

Will they get a discount voucher? Do their points add up to free shipping? Can they move up a membership level if they reach a spend threshold? 

If you have a tiered loyalty program, the value of the rewards can go up with each level. 

For example, a first-tier member could earn points that add up to a discount voucher. A second-tier member could earn double points. A third tier, VIP member could have free shipping, triple points, and access to exclusive events. 

Remember, your most loyal customers bring in the most amount of revenue. It is worth going above and beyond to improve their experience with higher value rewards.

Look at outdoor apparel & footwear brand Merrell NZ. As soon as you sign up for their rewards program you can start moving up the tiers. Their silver and gold tier members enjoy generous discounts when they earn a certain number of points. Merrell NZ makes it simple for members to earn points with amazing rewards and a simple loyalty program widget.

5. Associate a name/brand to your loyalty program

No matter how amazing your product is, you are facing a huge amount of competition. Your customers are probably being asked to join a huge number of other loyalty programs. 

To make your customer reward system stand out, we recommend branding it. 

How can you make your loyal customers feel like they are part of a special community? This is where customer experience comes into play for modern business. It’s not enough to simply sell to your customers. Associating a brand name with your loyalty program makes you memorable. 

For example, Marsello user Our Bralette Club has a membership loyalty program called the Peach Party. Peach Party members enjoy generous discounts and free products, and most importantly the branded name makes them feel part of the club!

6. Promote your rewards point program

Finally, you need a system for promoting your points reward program. You can’t reward customers if they don’t know it exists! Don’t be afraid to promote it everywhere online and in stores. 

This isn’t just for new customers or new business. When Evermore Toys rebranded, they used a clever email marketing campaign to encourage existing loyalty members to engage with the newly branded store and earn more rewards.

We have a few tips for promoting your rewards system online:

• • • Let people register for an account at the checkout and remind them to sign in
    • Have a banner on your website telling people about the benefits of becoming a member and earning points 
    • Let customers know on your social media platforms 
    • Use an omnichannel marketing platform that combines your reward system online with your POS 
    • Automate your email marketing strategy to communicate effectively with new and existing members- you need to promote at the right times to ensure high engagement!

Your loyalty program is all about serving your customers even more. Shout its benefits from the rooftops!

FAQs

How do businesses track the cost-effectiveness of their points system to ensure it's generating a positive return on investment?

Businesses can track the cost-effectiveness of their points system by analyzing customer engagement metrics, such as increased purchase frequency, higher average order value, and the redemption rate of points. Comparing these metrics against the program's operational costs provides insights into its return on investment (ROI).

Can you provide examples of challenges businesses might face when integrating a new points system with their existing CRM or sales systems?

Integrating a new points system with existing CRM or sales systems can present challenges like data sync issues, software compatibility problems, and the need for employee training to manage the new system effectively.

What are some strategies for re-engaging customers who have accumulated points but have not redeemed them for a long time?

To re-engage customers with dormant points, businesses could implement targeted marketing strategies such as personalized email campaigns reminding them of their points balance and its value, limited-time offers to boost points redemption, or introducing new, attractive rewards. Add urgency by expiring points and tiers — let customers know they have limited time remaining to cash in and receive their rewards.

Final words

A reward points system is an effective way to increase your revenue. It rewards your most valuable customers and goes beyond a transactional relationship. By branding your loyalty club, designing an easy-to-follow system, and promoting it for every new and returning customer, you will see incredible ROI on your rewards program. 

If you are looking for the easiest way to set up a loyalty program for your eCommerce or in-person store, you’ve already found it. Marsello makes it simple to set up, market and run a successful point system for rewards. Start rewarding your customers with Marsello!

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

From the humble coffee card to 2-for-1 deals, the hospitality industry is no stranger to a loyalty-focused marketing strategy. But things have progressed rapidly from physical loyalty cards – the future of hospitality is digital, even when it’s brick-and-mortar.

The possibilities for digital hospitality don’t just stop at loyalty programs either! From adaptable real-time menus and online QR table-ordering to increased upselling with less work from staff, the digitalized hospitality experience is paving the way for personalized, data-driven dining experiences that automatically drive customer loyalty and retention.

And Bopple is here to bring that to you by integrating with Lightspeed POS for restaurants and Marsello – the perfect omnichannel partnership!

What is Omnichannel Hospitality

The gap between physical stores and online channels is lessening – in fact, they’re becoming one and the same experience. And the hospitality sector is no different! From online wine tastings to contactless ordering with QR codes, the way we indulge in dining is tightly integrated with the way digest digitally. 

Creating a seamless experience that enhances each and every customer touchpoint is at the heart of an omnichannel strategy, but it’s so much more than that! With a multi-channel approach, you’re able to capture valuable customer information that empowers smart, data-driven, customer-centric business decisions, ensuring you get results from your investments and see a trackable return on investment.

With, Lightspeed Ordering powered by Bopple and Marsello, you have a powerful, tightly integrated tech stack that works together to drive undeniable results and increase customer relationships, engagement, and returns. Let’s dig a little deeper into each app: 

Bopple: Whether you’re running a one-off physical pop-up, or you’re an established restaurant, Bopple has what you need to succeed online. With COVID-specific features like QR check-ins and ordering and essential tools like customer database tracking and frictionless checkout, Bopple was developed with the digital hospitality owner in mind!

Lightspeed POS for Hospitality: Digital POS has cemented itself as the new normal and Lightspeed Kounta POS is fast becoming the go-to tool for savvy hospitality business owners. So you’ve sold out of a dish? Update your digital menu on the fly! Running a special or a deal? Promote it directly to your social media channels and flow that campaign into your Marsello-powered marketing! With everything online, you’re able to edit and adjust all important areas of your business in real-time, without time-consuming admin.

Pair your Bopple and Lightspeed Kounta POS apps with Marsello for a tightly integrated, one-stop tech stack and answers all your omnichannel hospitality needs.

Marsello not only offers personalized loyalty programs that are integrated in-house and online, but the options are endless! Encourage friend referrals from customers, nurture customer loyalty, reward purchase behaviour, and turn insights into opportunities with detailed reporting and automated customer segmentation.

Tied together, it’s easy to see how Lightspeed Ordering powered by Bopple and paired with Marsello Loyalty is a recipe for success and an unrivalled omnichannel solution. 

What does an omnichannel approach mean for hospitality customers?

Customer experience! The long and the short of it is that your customers’ experience of your business is streamlined and interactive. Just look at how Chat Thai uses their omnichannel tech stack to maximize customer experience and drive loyalty!

Chat Thai’s modern branding and crisp aesthetic lead customers to expect a modern dining experience and that’s exactly what their customers receive!

From digital ordering to customer loyalty, all Chat Thai’s customer data is captured with the help of Bopple’s digital tools like QR-code sign-ins and contactless payments. Orders are processed through a Lightspeed Kounta POS, and, combined with Marsello, Chat Thai can easily manage their customer information and create a seamless marketing strategy that re-engages their customers at every touchpoint thanks to an omnichannel loyalty program.

And their customers love it too! In fact, in the first 2 months of using Marsello loyalty with their Lightspeed Ordering powered by Bopple, Chat Thai has seen a 375% increase in reward redemptions!

Did you know, customers who order digitally spend more?

From ordering in person, to simply ‘ordering in’, it’s apparent that customers who order digitally are more likely to spend more. In fact, one study suggests that customers who order digitally will spend as much as 25% more on average. The team at Lightspeed put this down to a few potential factors. Digital menus:

• • • Give the customer a primarily visual experience. Perfected product photography goes a long way in encouraging diners to order more by encouraging an increased hunger response. Consider this your customers’ first impression of what to expect from their order – remember, enticing realism will go a long way! Just look at how Chat Thai presents their menu. It’s enough to get your stomach rumbling and taste
    • Increase the opportunity to upsell. Essentially, a digitized menu and ordering experience automates the upselling process. With beautiful images and an enjoyable, easily navigable online experience, customers are much more likely to explore the entire menu and maybe order an extra side dish or replenish their drinks throughout the meal.
    • Allow for increased flexibility. Think about it like improving customer experience. For example, when it comes to busy businesses and the re-ordering process, digital ordering gives the customer the ability to adjust their order easily and in real-time. No catching the eye of waitstaff, no miscommunications or worries about dietary requirements. And this in turn equates to increased average order values and improved long-term customer loyalty.

The benefits of moving towards digital hospitality for retailers are limitless. With tools like data-driven channel management, customer-driven loyalty engagement, and automation across all touchpoints, omnichannel hospitality is the answer to smart, customer-centric business growth.

Get the omnichannel experience for your customers

So you’re ready to make the move to an optimized omnichannel tech stack designed specifically for hospitality business owners – that’s what we like to hear!