In the evolving B2B digital landscape, customer retention is the ultimate prize for every business. Attracting new clients is exciting but keeping the ones you already have is the real struggle! The one-time or one-way transactional approach no longer works for businesses.
That's why, brands continuously seek innovative ways to nurture long-lasting relationships with their clients and retain them with the help of repeat purchases. Loyalty point reward programs are the best tools to fit into this scenario.
Fortune Business Insights states that the loyalty management market will reach USD 28.65 billion by 2030 globally. To help you understand the point rewards program, here's a comprehensive guide that delves deeper into point programs.
A point-based program is a strategic business approach used to encourage customers to make purchases with the prospect of earning reward points. You can earn points by buying a subscription, ordering a product, signing up for a newsletter, helping with referrals, and more. Over time, you can use these points in exchange for freebies, discounts, upgrades, and other gifts.
Statista forecasts that around 70% of U.S. consumers participate in free or paid loyalty programs, thereby spending more time with the said brand. With loyalty reward programs, businesses are moving away from one-time transactional relationships and towards customer retention and loyalty. The focus is on building a better rapport with clients that goes beyond the demand-supply chain.
Rewards and points have already taken over the business sector. As per Accenture, over 90% of companies in the US have some form of loyalty points program, including Amazon, Disney, Target, Home Depot, Adidas, and Nike, among others. And the points loyalty program isn't limited to the retail space but also includes BFSI, dining, airlines, credit cards, and e-commerce.
Bonding with clients, lesser marketing costs, insightful customer data, and better client engagement are just a few benefits of point-based loyalty programs. Here's why every business should consider giving loyalty reward points to their customers:
With point-based loyalty programs, companies can track behavioral changes and tailor upcoming marketing campaigns for enhanced effectiveness. You'd be surprised to know that 66% of consumers say that their spending habits change with the ability to earn rewards from points programs.
A point-based loyalty program encourages customers to bond better with companies. When customers or clients receive points, they end up feeling valued as consumers. The end benefit is that 75% of consumers enrolled in loyalty programs often end up buying more products from partner companies because they enjoy the feeling of being rewarded.
With loyalty point programs, companies and businesses gain loyal customers that ultimately reduces the need for remarketing via repeat referrals and purchases. In fact, 52% of customers go the extra mile to buy from the brand they are loyal to and prefer. Offering customers an incentive on a purchase or action, just shows that you care about their continued loyalty.
You can tailor points loyalty programs according to your target audience, such as offering points for referrals, reviews, and purchases. You can then offer customers a diverse range of gifts, like free products, discounts, and exclusive experiences. With a point-based reward system, customers gauge the information easily. Clarity builds credibility and trust.
While there are differenttypes of loyalty programs, a report by Statista states that over 90% of U.S. executives believe that their points-based loyalty programs provide customers with more benefits than other reward programs. Customers are also more likely to engage with points programs. Here's why:
A rewards point program gives a clear and measurable representation of a customer's journey. You can track and understand it easily. And so can your customers!
A great scope of personalization and transparency is available via points based loyalty programs. Customers can redeem points for different rewards according to their preferences, and you as a business can better understand customer behavior.
Unlike one-time discounts and transactions, the loyalty points program motivates long-term commitment and relationships with the client. They strive to accumulate points driving repeat purchases and fostering a long-lasting relationship with your brand.
Loyalty points hold a monetary value i.e. they can be exchanged for goods within the catalog or free products/services/upgrades, or discounts, or other perks. The worth of loyalty points depends on the specific brand and its program guidelines.
For instance, in a retail loyalty-based point program, vouchers or discount coupons can be redeemed for every 10 points, while in an airline loyalty program, points are redeemable for hotel stays/upgrades, flights, etc. A general reward point program works in a simple manner. Your customers earn points and then redeem points.
Customers can earn points in two simple ways:
Points can be redeemed through a rewards catalog which caters to specific needs and preferences of the business in a B2B system. Businesses have a variety of rewards that customers can redeem, such as discounts on upcoming sales, tier upgrades, free services, early access to sales, allowing customers to support a cause, and so on.
Listed below are a few examples of popular redemption verticals:
Customer retention and growth in revenue tends to happen when businesses drive loyalty programs via data. These programs are based on consumer behavior, demand and engagement levels. To put things into perspective, 84% of companies in the US that worked towards enhancing customer experience noticed an uplift in revenue.
Point-based loyalty programs are just that – a way to enhance customer experience like never before. Here are some real-life examples of companies that invested in points rewards programs and saw a lot of benefit:
North Face XPLR Pass Loyalty Program is a sustainable initiative for people who love the brand and the adventures it helps them partake in. With this program, members are allowed to earn points for non-transactional activities like check-ins at their stores or outlets via mobile app or registration at national monuments or parks.
Members can trade in old gear and receive USD 10 credit for their next purchase at The North Face Stores. The brand also offers customers early access to their limited-edition collection with a chance to test products that have not been released in the market. This is the best example of emotional loyalty with a points rewards program.
Urban Outfitters is a multinational lifestyle retail corporation with a tier-based loyalty program. Customers buy points by participating in giveaways, browsing the website or app ten times a month, or shopping at their stores.
The rules focus on expanding the audience, retaining old customers, and attracting new potential customers. Surprise gifts, giveaways, anniversary rewards, and more are a great way to keep customers near you in addition to all the financial advantages.
Alaska Airlines Mileage Plan is a point-based loyalty reward program that captured attention because of its excellent redemption options and customer-centric approach. Members earn miles every time they fly with the airline. There are mileage plan miles for qualified bookings or participating with hotels and cruises. They also reward members for their travel with Alaska and their partner airlines.
FAB offers exclusive benefits to its customers in the form of FAB Rewards. These are reward points that customers on credit card/debit card spend, account balance, deposits, loans, and more. Customers also get points when they register for banking via digital channels or initiating online transactions. These rewards can then be redeemed on exclusive offerings, including cashback, bill payments, travel benefits, or shopping.
Starbucks Odyssey is an extension of Starbucks Rewards powered by Web3 technology to deepen the emotional bond between the brand and its members. An award-based system that allows customers to earn stars at every purchase
Using the Starbucks Rewards login, you can play games and earn NFTs, purchase limited-edition NFTs with your credit card, or unlock exclusive rewards like martini-making classes, invitations to trips, events, artist collaborations, and more.
The world of loyalty point programs can be baffling. For this, opt for a consumer benefits marketplace like Thriwe to make your loyalty reward program stand out. Thriwe's goal is to provide you with a framework for curating and delivering top-notch experiences to acquire, engage, and retain your existing and new customers.
Begin your journey to true customer delight with Thriwe!