Five Signs Your Brand Needs A Loyalty Program
(or a BETTER loyalty program!)
While nearly 90% of brands offer rewards, there are still e-commerce brands that are underutilizing this marketing channel, or have not yet invested in a strategically developed Loyalty Program. It’s easy for us to say that a loyalty program is no-brainer, but there are many reasons why it may not have been prioritized for your brand. Getting new customers is (understandably) the primary concern for many growing brands, and that’s no easy feat. Additionally, the world of marketing is full of new shiny objects - new tech platforms, new marketing channels and new trends to jump on. However, without having a strong customer retention strategy, fast-growing brands can easily plateau and eventually fail because they didn’t invest in nurturing loyalty. Based on our work with hundreds of brands, here are the top five signs you need a loyalty program. (or one that actually works!).
# 1 You’re Beholden to the Meta Machine
Ad-costs on Meta-owned channels are continuing to increase - up 10% in 2024. Increasing your customer retention by just 5% can increase company revenue by between 25 and 95% - giving you more to work with for customer acquisition. If your ad-spend on Meta gives you anxiety - it’s likely time to invest in retention.
#2 You’re Losing Market Share to New Competitors
Many categories, especially beauty, wellness and fitness, are seeing high growth, and more competitors are entering the market with creative ad campaigns, sophisticated personalization tactics, and cult followings. If you’re experiencing an increase in competition, a loyalty program is a great way to keep those customers - 84% of consumers say they’re more likely to stick with a brand that offers a loyalty program.
#3 You Have a Strong A Strong Email & SMS Marketing Program
If you have a healthy and engaged email and/or SMS list, it tells you that you have an audience that’s ready to take the next step! Email and SMS are crucial to the success of a loyalty program, so if you’re already rocking and rolling there - you have a receptive audience for a loyalty program.
#4 Your Repeat Purchase Rate is Less Than 25%
Repeat purchasers are your most profitable customers, and they are the key to allowing you to spend more acquiring new customers (see #1). If your new/returning customer split is higher than 75/25 - you need to shift some resources to customer retention strategies.
#5 You want an out-of-the-box approach to acquisition
Loyalty programs shine when it comes to customer retention, but implement a referral program as part of your loyalty membership and watch customer acquisition numbers grow as well.
Want to learn more about what’s involved in a loyalty program, and how it could work for your brand? Fill out our brand profile and someone from our team will reach out within 24 hours!