Share on facebook
Share on linkedin
Share on twitter
Share on facebook
Share on linkedin
Share on twitter

How to Elevate Your VIP Program to Drive Customer Engagement and Loyalty

If you are aiming to grow your business, returning customers are key – repeat business is a surefire way to drive revenue and build a sustainable business. One of the best ways to achieve it is through a customer loyalty or VIP program. 

However, with hundreds of thousands brands fighting for customer loyalty with various schemes and programs, how do you ensure yours delivers real value to customers, and keeps them coming back for more?

 

What Does Customer Loyalty Mean for Businesses?

Happy customers spread the word, and word-of-mouth is far more effective than a company’s advertising. According to Nielsen, 26 percent of global consumers say brands become familiar to them through recommendations, while only 15 percent claim they stay loyal due to the brand’s advertising and marketing messages.

Loyal customers have a higher lifetime value (LTV or CLV) than occasional customers, and they are more likely to make bigger purchases. In a recent KPMG survey, 52 percent of consumers said they would still buy their favorite brand even if it was cheaper and more convenient to buy from a rival.

They also make a big difference to a company’s sustainability. The same KPMG survey shows that 86 percent of customers will recommend a brand to which they are loyal, and 46 percent will remain loyal even after a bad experience. In today’s fragile market, where customers are spoiled for choice, such loyalty is highly prized.

 

Why Do You Need a Solid VIP Program?

If you want those VIP customers to stick around for the long term, you will need to give them an excellent reason to do so.

Loyalty or VIP programs offer a company’s most frequent customers rewards to incentivize long-term business. They can take many forms, but the most common offer is either a points system of rewards for money off your next purchase, coupons, or free merchandise. They are also increasingly offering experiences, such as the chance to meet brand ambassadors, celebrities, social media influencers and the like at brand events.

Customers love these benefits. According to The Loyalty Report by Bond, 73 percent of global respondents say they are more likely to recommend brands with good loyalty programs, while 79 percent say such programs make them more likely to continue doing business with a brand.

 

From Joe Blow to VIP: Transforming the Customer Into a Very Important Person

When creating your own loyalty program, there are two key questions to answer. How do you turn occasional customers into loyal customers? And how do you make the program as effective as possible?

Step 1: Find your most valuable customers

The first step is to make sure you are communicating with the right audience – in this case, your most valuable customers. You can use deep learning to analyze your data on past customer behaviors to create customer segments based on various metrics – what these are will depend on your goals as a business. The most commonly used are LTV, the number of placed orders, and the average order value (AOV).

Segmenting your customers like this has two benefits. Firstly, it lets you see which customers have spent the most with your company. Secondly – and perhaps more importantly – it allows you to use predictive deep learning algorithms to predict which segments are most likely to spend more in the future, giving them a higher overall LTV.

Step 2: Deliver hyper-personalization in real time

Now you have your most valuable customer segments, you can take it a step further by creating micro-segments based on customer interest. To make sure you keep up to date with loyal customers’ current needs and wants, you need to leverage both owned customer data (aka first-party data, like that generated by your own CRM, website, apps and social media channels) and third-party data to develop a much more complete picture of your customer. This insight enables you to discover their hidden interests based on topics and keywords they pursue outside your own channels.

For example, if you see a customer has bought running shoes from your site, and read an article about yoga on a third-party site, you can leverage that information to deliver a hyper-personalized offer for your range of yoga mats or a blog post about the top 10 yoga studios in town, increasing customer loyalty.

With this level of deep insight, you can serve your customers in an entirely new way. Personalized offers can be fine-tuned to their preferences (only showing them running shoes within their budget, say). You can tailor your messaging to speak their language, be it C-suite speak or surfer lingo. You can even tweak your website landing page to surface the most relevant content to them and their interests, saving them the trouble of looking for it.

 

Creating a VIP Program That Stands Out From the Crowd

Once you have those VIPs hooked, you will want to ensure your loyalty program is enticing enough to keep them coming back. Here are some best practices to help you stand out.

1. Give something back

Give something back to those less fortunate. Toms, a footwear and accessories company, offers Toms Passport Rewards, a points-based system that lets its customers use their points to support a charitable fund or foundation. By allowing its customers to give back to communities around the world, Toms positions itself as a force for good, and not just another footwear brand.

2. Go beyond the purchase

Why not expand your VIP program beyond just purchases? After all, customers can be valuable in more ways than just spending money with you. The skincare brand Odacité offers customers points for sharing its products on Facebook, following the brand on Instagram, writing a review, and even just creating an account. Everyone wins: the brand gets more exposure and more customer data, while the customer essentially gets free money.

3. Put your customers to work

You could take this a step further and turn your customers into your brand advocates. That is what cosmetic and skincare retailer Tarte does with its Team Tarte rewards scheme. By giving its customers reward points for creating user-generated content like posing for selfies with Tarte products and writing online reviews of its products, it has marshalled its customer base into an army of marketing influencers. Why pay the real influencers when you can reward your customers for doing that job instead?

4. Incentivize your customers

‘The more you spend, the more you save’ is also a great message. CorePower Yoga’s Member Program reduces the cost per class drastically for their most loyal customers who pay a flat annual rate. Throw in other perks like unlimited classes and free yoga workshops – not to mention the satisfaction that comes from keeping up an exercise regime – and you have a deal that yogis will bend over backwards for.

5. Make experiences their own reward

It is not just yoga brands that recognize the value of experiences. Outdoor apparel brand The North Face knows it too. Its VIPeak program offers more lifestyle-oriented rewards that customers can spend their points on, like a mountain-climbing trip to Nepal. They can even collect points by having experiences: by attending North Face events or checking in at certain locations (in the great outdoors, naturally). With experiences laser-targeted to their customers’ interests, the brand offers much more than mere apparel: the chance to create memories that last a lifetime.

 

VIP programs are a fantastic way to increase customer engagement and instill brand loyalty. By targeting the right customers in the right way and with the right offers, you can change where their loyalties lie in the long run.

 

* Increasing customer loyalty isn’t easy. That’s why we’re here to help! Get in touch with our team today to learn how you can improve customer engagement and retention with artificial intelligence. 

WE ARE HERE TO HELP

Let us know the marketing challenges that you’re facing, and how you want to improve your marketing strategy.

YOU MIGHT ALSO LIKE

It Is Time to Rethink Customer Loyalty in Travel

Customer loyalty isn’t what it used to be. In today’s highly competitive digital travel market, not only are consumers doing more complex research, but their decisions are based on individual need, not familiarity with the brand or the product they usually go for, making winning their loyalty tough. With artificial intelligence (AI), however, this task just got easier.                                         Fragmentation and Finding the Perfect Fit It is widely proven that the chances of selling to an existing customer are higher than selling to a new one – as much as 60 to 70 percent compared to 5 to 20 percent. Not only do they know your brand but, if they have had a good experience with you before, there is also trust. However, a customer can be exposed to hundreds of touch points on a single purchase journey, viewing multiple websites and ads before committing. So, securing that next booking is not guaranteed. Ultimately, if another brand sparks their interest, they are off. Loyalty cards are no longer enough. Customers today are looking for that perfect travel product rather than familiarity

Applying AI to Global Cross-Border E-commerce and Digital Marketing

Author | Alban Villani, SVP of Sales for Europe, Appier Marketing global means thinking local. The world is getting smaller, and brands can market their products all over the world. Physical borders are no longer an obstacle, and consumers have a wealth of goods at their fingertips. However, it’s vital to clearly understand how other countries and regions operate to sell to them successfully. Access to the internet has spread as individual regions have gained better technology infrastructure, and Southeast Asia in particular has seen an explosion in internet penetration. According to a 2019 Google-Temasek report, the Southeast Asia internet economy will be worth US$240 billion by 2025. What does this mean for cross-border e-commerce into and around Asia and the digital marketing that supports it? Shoppers in countries like Japan, South Korea and China typically prefer to purchase from local e-commerce platforms. According to DataReportal, Southeast Asia is seeing an increasing number of people shopping outside their home countries, including via Amazon, Shopee, Lazada and Tokopedia, offering shoppers more variety. The pandemic means that people have been restricted to online shopping almost exclusively, leading them to look for new products in new places both in terms of platforms and

How to Convert First-Time Visitors Using AI-Driven Personalization

It’s a norm for marketers these days to drive meaningful engagement with returning customers through personalized marketing campaigns and content. However, with marketing automation tools powered by artificial intelligence (AI), you can now personalize your website content for first-time visitors to turn more traffic into conversions. In today’s noisy digital space, brands place high premium on personalizing their content and services to their audiences. Tailoring the content on an app or a website to match visitors’ interest can be a powerful way to convert them into leads or even buyers. According to the 2018 Personalization Pulse Check from Accenture Interactive, 91 percent of consumers are more likely to purchase from brands that provide relevant offers and recommendations.   How Far Can Traditional Methods Go? Marketers have so far approached personalization by researching the existing customers and refining target personas to create more tailored content over time. As you get more data on the type of visitors who return to your site or app, you get a better understanding of the creative that should be produced for these visitors. While this helps in delivering personalized experiences for returning customers, a major portion of visitors convert on their first visits. According to