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!

To better understand these two topics, we’ll break down their definitions, the metrics for tracking them and show you which is going to increase your revenue over time. Whether you’re running a small, online shop or a multi-site retailer, understanding these topics will take your business to the next level.

Quick links:

1. 1. 1. What is customer loyalty
      2. What is customer retention
      3. Customer Loyalty vs Customer Retention: What is the difference
      4. What are the customer retention metrics that matter
      5. Should retail and eCommerce businesses focus on customer loyalty or customer retention?
      6. How to turn shoppers into loyal customers
      7. Why is it important to track customer data to understand loyalty and retention
         

What is customer loyalty

Building strong relationships with your customers helps to establish a positive view of your business. This in turn helps to create loyal customers. Building these bridges with your customers requires a proactive approach to ensure that their needs are being met, their interactions are smooth, and that they feel valued.

The major benefit of customer loyalty is that they’re more likely to stay with you, buy more from you as well as recommending your business to their friends and family. This means more than just spending more. Becoming a loyal brand advocate means that these customers are out there vouching for your business.

What is customer retention

Customer retention is the set of practices and procedures you put in place to help keep your customers engaged with your business. This leads to increased recurring revenue as they continue to spend. It is often tracked through churn, the number of customers that stop purchasing or never become repeat purchasers. 

It also helps to keep customer acquisition costs down, as you build a group of customers providing reliable, regular revenue. Keeping customers is generally cheaper than acquiring new ones, so keeping your existing base happy and spending can reduce your overall business costs whilst increasing earnings.

Customer Loyalty vs Customer Retention: What is the difference

So how do you define customer retention vs customer loyalty? They are closely aligned, and there is often an overlap of actions that drive the two.

Loyalty measures a customer’s predisposition to select a business entity as a preference and indicates a certain resistance to competitors. Retention is a measure of whether an existing customer continues to do business with you and the acts to make this happen.

Loyal customers have a certain stickiness to your business which can make them easier to keep and more valuable rather than just focusing on keeping them through mechanisms that make brand switching hard. 

What are the customer retention metrics that matter

There are several customer retention metrics that you should be tracking to better understand your customer lifecycle. The first and most common is customer churn. You can calculate this on a scale that is relevant for your business, but the basic measurement is: 

• Annual Churn Rate = (Number of Customers at Start of Year - Number of Customers at End of Year) / Number of Customers at Start of Year

A certain amount of churn is natural, but if this reaches between 5-7% it can be an early warning sign that you are not retaining customers and something isn’t right.

Repeat Purchase Ratio (RPR) is a great indicator of customer loyalty. To calculate:

• Repeat Purchase Ratio = Number of Returning Customers / Number of Total Customers

This shows the number of customers that are staying loyal and sticking with your business.

Should retail and eCommerce businesses focus on customer loyalty or customer retention

For all businesses, you should be focused on both customer retention and loyalty.

If you’re a retail business, building customer loyalty often comes through individual interactions. But how do you know if you’re succeeding? Setting up loyalty program systems will allow you to track individual customers’ spending over time. This data will help you better understand their habits and if they are staying with you.

If you’re an eCommerce business, tracking customer retention is usually quite straightforward. You can see your customers' most recent purchase, purchase history, and overall spend. You can easily benchmark this against your other customers to better understand individual behavior and what areas you need to improve. Understanding the loyalty of your customers can take a bit more work, but should not be forgotten. You might need to send surveys like Net Promoter Score to better understand what your customers think about your business.

How to turn shoppers into loyal customers

So how do you build a base of loyal customers? By tracking data like purchase frequency and average order value, you can better understand which of your customers are loyal to your business. To encourage loyalty, you can employ a variety of customer retention strategies. 

Improving customer service will help to enhance the customer experience you’re providing and help turn retention into loyalty. Experience is one of the easiest ways to differentiate your business from your competition. Using customer accounts and loyalty programs is another way to increase your repeat customer rate, especially if you can provide discounts or special offers as rewards.

Why is it important to track customer data to understand loyalty and retention

The best way to understand your customer retention and loyalty is through tracking customer data, including the customer journey. Customer retention technology will help you understand how long your customers are sticking with your business, at what points they drop off, and areas where you have an opportunity to build stronger relationships.

Metrics that show you customer retention are a great starting point and it can be tempting to focus purely on this. But customer loyalty is going to bring you longer-term success and financial stability. So make sure you’re also looking at metrics like Net Promoter Score (NPS) or Customer Satisfaction Score (CSAT).

Final words

It can be tempting to zero in on customer retention alone, but these customers aren’t necessarily going to stay with you for the long term. They’re likely to switch brands for a better offer. Instead, putting your energy into building loyal customers will set your business up for long-term success.

Using a product like Marsello’s all-in-one marketing platform can help you better understand your customers and the customer experience you’re providing. This will help build customer loyalty for your business, leading to better financial outcomes for you and improved interactions for your customers.

Updated 30 May 2024.

Here's a fun (and likely unsurprising) fact: the vast majority of people like celebrating their birthdays. Research cited by Benefits and Pensions Monitor shows that 89.4% of Americans enjoy celebrating birthdays, and 90.1% say birthday gifts help them feel more valued. 

So, it is no surprise that birthday marketing — specifically, birthday email marketing campaigns — perform incredibly well. According to MarketingProfs, "open rates for birthday mailings were over three times higher than for mass-promotion mailings sent to the same clients: 56.2% vs. 16.8%."

These numbers tell us that birthday email campaigns can be a huge treat – for both customers and brands. So, it's worth investing the time and effort to make your birthday initiatives shine. Read on for ideas and tips on how to do just that.

Listen to this post:

What are the benefits of birthday rewards for your business?

The most significant benefit of birthday rewards programs is that they are a win-win strategy. They focus on the buyer experience, which benefits your best customers while simultaneously increasing revenue and loyalty.  

There are several vital reasons why birthday rewards should be part of your overall loyalty program strategy:

Boost customer loyalty

Firstly, birthday rewards programs increase customer loyalty. 84% of customers opt to stay with a brand that surprises them and takes a customer-centric approach. Who doesn't like being spoiled on their birthday? 

Improve customer retention

Loyalty programs (that include things like birthday surprises) are proven to improve customer retention rates. Even a slight increase of 5% in retention can boost profits by 25-95%.

Gain valuable customer data

Birthday reward campaigns enable you to collect data and insights into customer behavior. You can, for example, track birthday purchases and redemption rates, which can help you tailor future marketing efforts.

By adding birthday rewards to an existing loyalty program, you can personalize customer experiences, gather data on which campaigns resonate with which customers, and re-target loyal customers who redeem rewards.

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

Examples of birthday email campaigns and rewards

When you do it right, birthday campaigns and rewards can improve customer retention, loyalty, and engagement. Whether it's sending birthday emails, creating specialty coupons, giving out freebies, or something a little more creative, these examples hit the nail on the head. 

Send a one-off special discount and build excitement

This is a low-hanging fruit of birthday rewards. When implemented correctly, special discounts are known to yield quick results and valuable data. If you're new to birthday campaigns, consider starting things off with a special discount that shoppers can use during the month of their birthday.

It's simple, straightforward, and easy to test. Just make sure to create unique promo codes for each celebrant so you can track who's redeeming your offers.

For example, Target's birthday email, which is sent to members of the Target Circle program, contains a coupon for 5% off the customer's entire purchase.

Offer free products on special occasions

Alternatively, you can give shoppers a freebie on their special day. Some examples of brands that offer birthday freebies include Starbucks and Sephora. Birthday freebies are growing increasingly common. Australian burger joint Hello Harry's openly offers its customers a free birthday burger… with a small caveat that protects the business—the birthday burgers are free up to the value of $12.

Freebies are a great option if you want to encourage your customers to try your products or if you have samples and surplus stock to give away.

Offer creative rewards to encourage engagement

Here's the not-so-great reality of loyalty or rewards programs: while many consumers sign up for them, not everyone participates in all the programs they join. 

A 2018 survey found that almost "two-thirds of respondents actively engage with less than half the loyalty programs to which they are members." The survey found that only 18% actively engage with all their rewards programs.

If your loyalty or rewards program suffers from low engagement rates, consider incorporating birthday rewards to stir things up. When implemented correctly, this tactic can fuel engagement among your members and put your brand back on their radar.

Anna Beck, a Shopify Plus-powered jewelry store with multiple resellers and stores, has done a great job at subtly incorporating birthday rewards into its loyalty program to incentivize customers but not create so much buzz that they risk sign-ups for just that reason.

Members of the program automatically get 20 points on their birthday, but with 100 points for creating a profile and 25 for completing their profile information, it's easy to see how customers quickly earn enough points to reap the rewards.

Thanks to Marsello, Anna Beck has experienced a 728.33% increase in revenue, directly attributable to its loyalty program. Even better, the brand has developed a comprehensive understanding of its customer database and how to convert them into loyal customers. The team had this to say about developing their loyalty program with Marsello:

"​​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."

Another great example comes from Smack Bang. The Wellington-based pet products specialist is one brand that's using a powerful loyalty program to its advantage. With a 100% engagement rate and 6x ROI, the addition of loyalty marketing to SmackBang's all-over marketing tech stack really helps the company capture customers' attention time and time again.

Loyalty members earn points for actions such as creating a profile, referring a friend, reviewing products, making purchases, and engaging on social media. Benefits include % discounts and first looks at product releases. 

The Smack Bang team keeps loyalty program members updated with emails regarding product releases, business updates, sales, events, and more! By maintaining regular contact with their customers, they set the expectation that the more loyal a customer is, the better deals they'll get. And we love that SB lives up to this expectation!

Create a sense of mystery and surprise your customers 

Want to keep shoppers on their toes or still trying to figure out which reward type is the best option? Consider offering a range of rewards and surprises that your customers can enjoy during their birthday month.

That's what the lingerie retailer ThirdLove is doing. Members of their 'Hooked' loyalty program get an annual free birthday gift, which remains a surprise until the customer's special day. According to the company's website:

"We're not ones to spoil a surprise! While we won't tell exactly what they are, they'll change regularly and might be a freebie, a discount, or a little something special just for you."

Surprise freebies are a wonderful way to keep your customers excited, but our tip? Don't be tempted to fall into the trap of 'pawning off' your hard-to-sell stock on these customers. Make sure your birthday freebies are worth the hype and keep shoppers wanting more.

Celebrate your business’s birthday and say thanks to your customers

A nice twist to the concept of birthday rewards is to celebrate your brand’s birthday. This is a good way to mark an important milestone, and it gives you the opportunity to thank customers – both new and old.

Bare Wholefoods, a Sydney-based cafe, did just that when they celebrated their 4th birthday. 

To mark the occasion, Bare Wholefoods sent a pre-birthday email to their customers, which included a $10 discount code along with a sincere message of appreciation. The result? The small but mighty campaign saw a 6.59% conversion rate!

By celebrating their own birthday, Rough & Bare was also able to show appreciation to the customers that keep them going – and this is such a powerful message in the wake of significant changes brought about by COVID-19.

Sign off with a personal touch

If you have multiple sales associates who treat customers as their clients, you might want to send birthday emails directly from each team member. This helps strengthen the personal connection between the customer and the salesperson. 

Check out this example from LOEWE. The email is short, sweet, and signed by the customer's sales contact at the store.

Bonus tip: consider combining this tactic with a discount or perk so the email feels personal AND rewarded.

Tips for implementing birthday rewards

We’ve talked about the different types of birthday rewards you can offer; now let’s discuss how you can take your campaigns to the next level. If you’re looking to start or further optimize your birthday rewards initiatives, follow these best practices to ensure that your efforts hit the mark:

Integrate birthday perks with your loyalty or rewards program

While it's certainly possible to offer birthday rewards to non-loyalty program members, your campaigns will perform far better when they're incorporated into your loyalty program.

Roping birthday rewards into your loyalty program enables you to build data-rich customer profiles. Having your shoppers' purchase histories, shopping activities, and birthdays in one place means that you have a clear view of each customer. This, in turn, can enable you to improve and personalize their shopping experiences even more.

LEGO Certified Stores has done this to great success!

By awarding customers points on their birthdays and for purchases, LEGO creates a feeling of scarcity but customers also quickly rack up the points with each purchase. This means that when customers earn a reward, it feels all the sweeter!

Make it easy for people to enter their birthday

A successful birthday marketing campaign starts with data—in particular, your customers' dates of birth. Make sure you collect your customers' birthday details from the get-go to personalize your marketing efforts and improve customer experiences. 

You can, for example, ask them to enter their date of birth when they sign up for your loyalty program or newsletter. That's what Merrell NZ does on its website. The brand has a popup that prompts visitors to leave their name, email, and birthday.

With a 25% sign-up rate, this form is clearly a core component of Merrell NZ's customer engagement efforts.

Automate your campaigns

Keeping track of everyone's birthdays and setting up individual messages isn't just tedious; it's impossible as your business grows. Campaign automation is not only a remarkable time-saver – automation as a whole (along with personalization) has been pinpointed as the future of marketing. 

Thankfully, Marsello has done the hard work for you and already has several pre-made automated flows that are easy to review and enable. One of these automated flows includes a Birthday Flow, which automatically triggers an email sequence to engage customers on their birthday month. This pre-designed email series is populated with a small discount offer and is already tied to your customer database, so there's no need to manually configure the campaign. 

Just take a look at this example from shoe retailer bCODE:

Notice that they’ve given their customers a lovely surprise by automatically adding 5 points to their account to celebrate! We love that this campaign stands out, has a compelling subject line, and gives customers value right away.

Learn more: All of Marsello’s automated campaigns are designed to be easily enabled in just a few clicks.

Test your offers

While we can certainly recommend birthday rewards and ideas, ultimately, the performance of your birthday promotions will depend on your specific store and customer base. That's why you must test and analyze different birthday promotions to see what works best for your business.

As mentioned above, creating unique promo codes makes it easier to monitor the performance of your offers and the customers who are redeeming their rewards.

Take Merrell NZ, which is a pro at testing all of the company's marketing. The team had this to say when we spoke to them about their Marsello-powered marketing.

"Marsello offers automations, loyalty, rewards, email campaign segmentation, SMS. All the tools that we knew we wanted to test in stages as our eCommerce and business grows. Step 1 was swapping from [our old provider] to using Marcello’sMarsello's email marketing campaigns. Step 2, we're using marketing automation. Step 3, it's loyalty!"

It was essential to the team to find an all-in-one tool that they could use to build their marketing functionality while also testing each and every change. And that didn't stop when it came to building their loyalty program and testing their promotional offers!

One way you can use birthday rewards to understand your customer engagement patterns is to test which promo types (e.g., free shipping vs. 20% off vs. $5 off) your customer responds well to. Then, it's easy to apply similar logic to any other promotions and offers that you create in the future!

Integrate SMS marketing

While email is still the most popular channel for sending birthday promos and rewards, SMS is rapidly gaining steam and won't slow down anytime soon.

So, if you're thinking about using SMS marketing, customer birthdays present the perfect opportunity to touch base. Consumers will likely be checking their phones for birthday greetings, and having a timely text from your brand could serve as a pleasant surprise. 

Just remember, SMS marketing comes with a few rules to keep in mind and not every merchant is eligible. To make sure you’re doing everything right, check out our help center on SMS compliance. 

But wait!
What about people who put in fake birthdays?

When you plan your loyalty program, you're setting up incentive structures. And there are always shoppers who game them to get the maximum discounts and offers possible. Here are some ways to avoid birthday rewards abuse.

Apply a "cooling-off" period when people sign up for your loyalty program

Don't let people put in a birthday date within the first month ("What a coincidence, my birthday is TOMORROW!"). This will deter people who want "quick points" or instant freebies and then disappear. If you apply this, make quick mention of it to explain the policy. For example, "Sadly due to abuse of this offer, we won't send birthday offers within 1 month of signing up to our rewards program :(".

Set a spending threshold

When offering birthday discounts, establish a minimum spend for the promotion. That way, you encourage higher spending and ensure the promotion benefits both the customer and your business. Check out this example from the Harry Potter Shop. While the brand offers a generous $10 off, birthday celebrants must spend at least $50 to redeem the coupon.

Set a deadline for reward redemption

Having reward redemption deadlines can help prevent birthday reward abuse by ensuring customers use their rewards promptly instead of letting them pile up indefinitely. It also encourages immediate spending, which is great for cash flow. 

Be mindful of giving away too many points

If you use a points system to reward your customers, make the value of birthday points lower than what they would receive for making an actual purchase. This ensures that the points remain an incentive without being overly generous.

Consider "surprise" freebies

For birthday programs where you give out a freebie, make it a surprise! Don't explicitly say what free item they will receive before they sign up. That way, people will be less likely to sign up for that one specific item, and you can still treat your loyal members.

Ultimately, people will always want to take advantage of free points. The benefits you get from creating positive customer experiences for your loyalty club members will almost always outweigh the potential for rewards abuse. 

FAQs

This is one of our most popular topics, so we get a lot of questions! Here are ones our experts hear the most.

What is a 'birthday marketing strategy'?

A birthday marketing strategy involves using customers' birthdays as an opportunity to engage with them, show appreciation, and offer special promotions or rewards. Done right, birthday marketing initiatives enhance customer loyalty, increase sales, and create positive experiences that drive repeat business.

What is a birthday campaign?

A birthday campaign is a targeted marketing effort designed to celebrate a customer's birthday. It typically includes sending personalized birthday messages and offering exclusive discounts, gifts, or other incentives to make customers feel valued on their special day.

What is a birthday promotion?

A birthday promotion is a special offer or discount for customers on or around their birthday. This could include percentage-off discounts, free gifts, bonus points in loyalty programs, or other exclusive deals that incentivize customers to make a purchase.

How do you keep track of customers' birthdays?

You can keep track of customers' birthdays by collecting their birth date information when they sign up for your loyalty program, newsletter, or during the checkout process. From there, you can manage the data using your CRM software.

What should be included in a birthday rewards program?

The right birthday marketing campaign depends on your brand. That said, a birthday rewards program typically includes personalized messages, exclusive discounts or offers, gifts, bonus loyalty points, etc. 

How do businesses track the effectiveness of birthday reward campaigns over time?

To track the effectiveness of birthday reward campaigns over time, you can use customer relationship management (CRM) tools to analyze customer engagement, purchase frequency, and changes in spending patterns around their birthdays. If you're using Marsello, you can track the revenue generated from birthday automations over time, allowing you to optimize and see the impact of your changes.

Can small businesses without a big budget implement impactful birthday rewards?

For small businesses with limited budgets, impactful birthday rewards can be implemented by offering personalized discounts, exclusive products, or simple gestures like birthday messages that make customers feel valued without incurring high costs.

How do businesses personalize birthday rewards for diverse customer segments?

Personalizing birthday rewards for diverse customer segments involves gathering data on customer preferences and purchasing history to tailor rewards that resonate with different demographics, enhancing the customer's experience and loyalty. Remember: Don't get too granular with your segments—the smaller the segment, the more time-consuming and cost-intensive personalization will be. For smaller businesses, we recommend one simple birthday reward, such as a voucher.

Final words

Birthdays can be a real treat not just for your customers but for your brand, as well. So, take the time to create campaigns that make your customers feel appreciated on their special day.

Need help doing just that? Check out Marsello's customer loyalty features and discover how you can engage each customer on their birthday and beyond.

Make sure to check out our comprehensive loyalty guide to ensure your loyalty marketing is up to date in all areas.