Jul 20, 2016 | Customer Loyalty Research

Profitability Hacks: Two ways to maximize ROI from your loyalty program

by  Margaret Link — Marketing at Thanx

Customer retention can unlock long-term profitability for businesses large and small. Maximize this critical channel with these three easy loyalty hacks. 


Want to give your loyalty program an extra boost? Pay attention to these critical metrics in order to supercharge your loyalty program success. 

1. Rally the troops: Get employees excited about enrolling new customers.

When it comes to pumping up loyalty program engagement, always look to your front-line employees to garner more customer buy-in. When employees are knowledgable about the program and actually like it (hint: don't pick a program that burdens employees with extra work!), they're more excited about spreading the love. Customer retention rates are 18% higher on average when employees are highly engaged — invested employees make a significant difference in the success of your program enrollment (remember that a 5% increase in retention produces a 80% increase in profitability... an 18% increase in customer retention is a profitability slam dunk). 

Effective staff training is a great place to start. Consider adding an extra incentive to excite staff and managers and build more momentum. Closely track location-specific signups, and set goals for your staff to hit. Combined with training, a staff incentive campaign spikes signups by as much as 300%!

Our Merchant Success team wrote about this here, but a few additional ways to incentivize employee engagement could look like:

  • Store competitions: Launch a cross-location enrollment competition. The most effective competitions have merchants giving away monetary and/or team outing awards to winning team members, and generally last for a short time period (<1 month). 

Here's a tip from our merchant partner Tomatina on how they rallied their employees to help spread the word about their customer loyalty program:


2. Rally the OTHER troops: add a referral marketing component & let customers share the love with their friends.

A Nielsen survey found that 92% of consumers trust referrals from people they know, and people are 4 times more likely to buy when referred by a friend.  Loyalty solutions are principally about retaining existing customers, but there is an upside that most merchant miss out on — when customers are happy, they refer their friends. 

Referral marketing is a no-brainer not only for catalyzing currently loyal customers, but using their enthusiasm to acquire new customers is a double-whammy. Research shows that consumers acquired through referal methods are significantly more valuable than customers acquired elsewhere: According to Deloitte, customers required through word-of-mouth marketing have a 37% higher retention rate and spend 150% moreThis is why referrals are more effective and lucrative than customers acquired through traditional "spray and pray" acquisition methods like Groupon or other deal sites — they're being targeted by your happiest, most satisfied customers. 

Another powerful aspect of this is the Millennial aspect: savvy Millennials in particular are more likely to trust a referral from a friend than any other marketing channel, only 1% of millennials report trusting traditional advertising, and 28% say they wouldn't even venture to try a brand their friends didn't endorse. To capitalize on this, your loyalty program should include a way for loyal customers to be incentivized and rewarded for spreading the word to their friends and family. Sharing is caring, right?


Want to learn how you can implement these loyalty techniques within your own business? Talk to a customer retention expert today — I'll make them put down Pokémon Go! so they can help you out.


 Learn more about Thanx

Already have a loyalty program? Learn more about how to manage it here:

1. How to manage millennials in your loyalty program

2. Checklist: Is your customer loyalty program working?

3. How to supercharge your rewards program sign-ups

4. How businesses can fix (and prevent) bad Yelp reveiws

5. Five simple ways to get more customers into your loyalty program


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