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How to Make Your Loyalty Program Pay Off

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Do loyalty programs actually create more-loyal customers? In a recent study, researchers analyzed two years of purchase data from more than 10,000 customers at a top U.S. retailer to explore how spending did (or didn’t) change after customers became loyalty members. They found that loyalty programs do increase profitability — but only for some customers, and not the ones you might think. Specifically, while the retailer had been targeting loyalty program promotions at customers with high levels of past spending, the researchers found that joining the program actually had no impact on those customers’ spending. On the other hand, joining the loyalty program increased spending by close to 50% for customers who were highly vulnerable to competitors. The researchers used a machine learning model to gain insight into who exactly these customers were, and found that the best predictor of changes in spending was actually customers’ locations relative to both the retailer’s stores and competing stores. Based on this surprising finding, the authors argue that marketers should target their promotions based not on historical spending, but on location, and that they should further consider investing in simple machine learning tools that can help them to identify the non-obvious traits that may correlate with profitability in their unique industry and market.

Ninety percent of leisure and hospitality companies (and more than 60% of all companies) offer some type of loyalty program — and yet, it’s not at all clear that these programs actually work. One report found that the average consumer belongs to more than 14 loyalty programs, often with multiple competing brands, suggesting that these programs hardly create loyal customers.

Furthermore, retailers often target loyalty promotions at their highest-spending customers, which can seriously backfire, since these are customers who would have spent their money regardless, rather than customers for whom discounts would actually convince them to spend more. As one hospitality industry executive bemoaned, “You know, I have this customer reward program. It is kind of expensive, but I feel like I have to have a program because everyone else has one. Honestly, I don’t know what, if anything, it actually does for me.” In many cases, the ROI on these programs just doesn’t seem to pan out.

At the same time, studies have found that loyalty programs do have the potential to offer significant benefits to consumer businesses such as retailers, grocery stores, restaurants, gyms, drugstores, spas, coffeehouses, and more. Customers often develop a stronger psychological attachment to brands whose loyalty programs they subscribe to, and these programs can significantly increase members’ spending and retention rates — if designed correctly.

To explore how retailers can more effectively reap the benefits of loyalty programs, we conducted a large-scale study in partnership with a top U.S. retailer. We analyzed two years of purchase data from more than 10,000 individual customers, totaling 2.4 million purchases, and examined spending patterns such as how often customers visited a store, how much they spent, and what items they purchased, both before and after joining the company’s loyalty program (all data was collected before the pandemic, and we looked exclusively at in-person rather than online sales). Based on this extensive dataset, we found a few interesting trends.

First, we found that for a large group of customers, signing up for the loyalty program had no noticeable impact on their behavior: They started collecting discounts (which they were no doubt happy about), but both the frequency of their visits and the quantity of their spending remained unchanged.

However, two customer segments emerged from the data for whom the loyalty program did make a significant difference: consolidators, or customers who started buying more products from the retailer (likely products that they had previously been buying from competitor stores); and upgraders, or customers who didn’t increase the number of trips or products they bought, but began buying more expensive, premium versions of the same products they had previously bought from the retailer. For these two types of customers, the loyalty program was highly profitable — increasing spending by roughly 50% — and so we were interested in learning more about how the retailer could identify those segments and proactively target them with loyalty program marketing.

Like many companies, this retailer had largely been relying on analyses of historical spending patterns to identify high-value customers. However, we found that rather than focusing on past spending, the more useful metric was actually customer location. Customers’ locations relative to both the retailer and their key competitors determined their “vulnerability” to competition, and the more vulnerable the customer, the greater the positive impact of the loyalty program. There are a few components to this. First, proximity to the retailer marginally increased the impact of the loyalty program, while proximity to competitors significantly increased its impact. This makes sense: Customers will likely be more easily swayed to visit a store that’s close to them, and if they don’t have easy access to competitors, there is limited potential for them to consolidate their purchases in the first place.

A closer analysis, however, revealed important and difficult-to-define nuances around the impact of where exactly the customer, retailer, and competitors were located. For example, the path that a customer takes to reach the store can make a big difference. If a customer passes competitors on the way to the store, they’re likely to be much more vulnerable and thus a much higher-value candidate for a loyalty program. Similarly, if competitor stores are geographically scattered, customers may be less vulnerable than if competitors are conveniently clustered together, especially if the competing stores are in the opposite direction as the store where the customer is a loyalty member.

Given this complexity, manually identifying these sorts of trends can be next to impossible. But in contrast to human analysis, modern machine learning methods are well-suited to finding patterns in complex data. We fed extensive data on both spending and physical locations of customers, stores, and competitors into a simple machine learning model, and the model was then able to accurately predict which customers would be most valuable to enroll. Importantly, the model found that small differences in location could make a big difference in ROI, highlighting how automated tools can segment customers in ways that may not seem intuitive, but which can be incredibly impactful to the bottom line.

So, what does this mean for marketers? There are two key takeaways to note. First, instead of focusing on converting the highest-spending customers, marketers should identify and target the customers who are most vulnerable to competition. These high-vulnerability customers have the highest conversion value, and so targeting them with loyalty program promotions will yield the highest ROI.

Importantly, this may mean rethinking some metrics. For example, the retailer we worked with found that when they targeted loyalty program promotions at customers with the highest historical spending levels, a single email increased these customers’ likelihood of signing up by 6.1% — seemingly an impressive conversion rate! But when we dug a little deeper, we found that this strategy actually performed slightly worse than random targeting when it came to identifying customers for whom the loyalty program would actually increase profitability, and it was a lot less effective than a targeting strategy that incorporated customer vulnerability based on location data. Specifically, after joining the loyalty program, high spenders (i.e., the customers who had been targeted by the original campaigns) exhibited almost no change in spending, while the customers who were targeted based on their vulnerability to competitors increased their spending by 45%.

In addition to increasing ROI, this approach can also be a lot more practical than traditional spending-based analysis. Historical sales data is often unavailable, expensive, or difficult to correlate with other customer information, while location data is almost always readily available. For example, say you’re opening a new branch or expanding into a new product market. You’re likely to be targeting customers for whom you have no historical spending data, but a simple search on Google Maps can give you the information you need to determine where your loyalty program will be most impactful.

The second key takeaway is that what we did wasn’t hard. You don’t have to hire a team of machine learning experts or data analysts to implement a simple model that will help you extract otherwise invisible insights from the data you already have. While our study illustrated the importance of location data for loyalty program ROI, there are no doubt other metrics that correlate with profitability for other programs in other industries, and machine learning can be a powerful tool to help you identify and leverage those patterns.

Ultimately, it’s all about rethinking how you approach targeting. Instead of focusing on customers who are already high spenders, marketers should leverage automated tools to identify and intentionally focus promotions on the customers whose loyalty will be most valuable, and whose conversions will yield the greatest return.

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14 community management tips for meaningful connections with customers

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Community building blocks

The idea for sharing community management tips came to me about a year ago. That’s when I synced up with the GoDaddy Community team to host a webinar for small business owners. As hundreds of attendees rolled into the Zoom, I had a realization: “GoDaddy has a strong community.”

Behind every good brand and business, there’s a solid community of supporters, stakeholders, and sometimes, even haters.

But building a community and maintaining connections is one of the most misunderstood and least talked about topics within the small business world. For a business with fewer than five employees and a handful of customers, community building might seem like just another marketing tactic that is just out of reach.

To help small businesses build and manage an online community, I asked other business owners and marketers what community management tips they had for creating meaningful connections with customers.

14 community management tips to create meaningful customer connections

Given that creating and maintaining a strong community can help retain and attract customers, consider following these 14 community management tips:

  1. Be quick to address negative experiences
  2. Filter out spam
  3. Showcase success
  4. Send a postcard
  5. Get your customers involved in important decisions
  6. Bring Up topics that encourage engagement
  7. Provide talking points and engage with your community
  8. Engage regularly
  9. Be the face of your brand
  10. Choose a channel that works
  11. Create content that addresses customers’ specific needs
  12. Consider a brand ambassador program
  13. Reward loyalty
  14. Recognize the importance of inclusivity

Read on to learn more.

1. Be quick to address negative experiences

A bad customer experience can quickly escalate to a brand reputation crisis, and the company’s response must be fast to revert the situation.

Monitoring social channel mentions is an easy way to keep an eye on conversations surrounding your brand and detect potential concerns.

Once a customer posts a comment that threatens your brand reputation, listen, honestly apologize and be willing to solve the issue in the best possible way. Your unsatisfied customer will feel appreciated and perhaps even become a brand advocate.

-Rebeca Sena, GetSpace.digital

2. Filter out spam

The most important thing you should be doing in regards to community management is interacting with your community, and you cannot do that properly if you have to work through a bunch of spam. There are many programs out there, even some within the different social media sites, that can filter out spam in your comments and messages so you can focus on addressing your community. Plus, getting rid of the spam and moderating harmful comments creates a better space for your community to contact you through.

-Jacob Dayan, Community Tax

3. Showcase success

Develop case studies from your successful community members. This is a practical way of propagating the core values of your online community and encouraging new users to join your community.

The more these members contribute to the community, the more impact these case studies have. You can start by creating basic reports to identify the members who are actively contributing high-quality content, assisting other members, and elevating the community.

-Hasan Farahani, Yocale

4. Send a postcard

postcard with other travel items

Many of my customers spend $15–$20K on medical care in Latin America. I send my customers handwritten postcards to remind them of their journey, thank them for their business, and to stay engaged while they recover from procedures like dental implants or plastic surgery.

The cost in time and money is very low, but a human touch in the healthcare space is increasingly rare.

-Wesley Jacobs, Apollo Medical Travel

5. Get your customers involved in important decisions

Taking the time to follow up with your most active customers and getting their insights on important decisions makes them feel like their opinions are truly valued and cared for.

In the long run, this forges a strong connection between you and your audience that relies on more than simply a transaction.

An added benefit of doing this is that you may even get some eye-opening suggestions and creative ideas that could end up benefiting your business.

-Harry Morton, Lower Street 

6. Bring up topics that encourage engagement

Meaningful connections need to originate from a common source that offers a moment of relatability, which can further build brand trust. Social platforms offer numerous opportunities for these types of exchanges. When managing your social community, bring up topics that encourage engagement so you can connect on a level that goes beyond the basic company/customer relationship. In doing so, the consumer will feel more at ease to comment, ask questions and even provide more detailed feedback.

-Lindsay McCormick, Bite 

7. Provide talking points and engage with your community

It’s important to recognize that community management is an ongoing responsibility. If you want to see your community thrive, you must create opportunities for customers to voice their opinion, communicate with other community members and provide you with feedback. Finding success is contingent on your ability to encourage participation from users, so you must provide talking points and give them plenty of avenues to stay involved.

If you leave your community dormant without your administrative oversight, engagement will start to dwindle as fewer users initiate conversations and take part.

Communities rarely function autonomously, so be sure to play an active role as you connect with and safeguard your community.

This gives you a chance to speak with your customers on a personal level, helping you learn about their likes, dislikes, objections and pain points directly—all of which are crucial in building meaningful connections with customers.

-Mike Grossman, GoodHire

8. Engage regularly

The best community management tip is to engage regularly and don’t neglect questions or threads you didn’t start—even better if they aren’t getting a lot of feedback. If you’re lucky enough to have the opportunity to regularly interact with your customers, make sure you’re commenting often and have a badge next to your name letting them know you’re a moderator or part of the company. That will really cement that feeling of connection and letting members feel heard. Plus, we’ve found that a community manager can really breathe life into a topic by offering input and pushing it to the front of that community for more engagement.

-Sylvia Kang, Mira

9. Be the face of your brand

Revealing the human side of your brand is without a shadow of a doubt an efficient strategy to boost your customers’ connection. It conveys transparency and accountability, building a stronger human bond. Consumers tend to trust people more than a company, and showcasing real people will make you and your brand easier to remember and trust.

-Chiara Sternardi, Passport-photo.online

10. Choose a channel that works

social media apps on iphone

The best way to build an authentic community is to have everyone communicate using the same social media platform. Make that a crucial part of your strategy.

If it’s a professional audience that you’re going after, choose LinkedIn. If it’s a broader audience, use Facebook or Instagram. If it’s a young audience, try Snapchat or WhatsApp. If it’s a politically charged audience, maybe try Twitter.

YouTube is a great way to encourage people to watch videos that provide clear instructions on how a product or service works.

Users flock to YouTube for instructions on everything from how to change batteries on a device to playing scales on a guitar. The comment section can be useful for feedback purposes, and it also can be a way for customers to communicate with one another.

-Joel Jackson, Lifeforce

11. Create content that addresses customers’ specific needs

By creating audience and buyer personas based on different client categories, content marketers can create social content that speaks to people rather than just industries. Learn where your customers hang out online using your social media demographics. Then, narrow those results using audience research to help you define a specific audience and channel. You can then customize communications by researching the LinkedIn profiles of potential customers. Doing so will allow you to identify different stakeholders within the organization and determine their pain points. You can then create better content that addresses their challenges. But it’s all about finding an interesting angle for each segment.

Content that is too broad won’t result in authentic engagement with your followers.

Social media posts that offer helpful information are guaranteed to stand out in your clients’ feeds, resulting in more likes, shares and leads.

-Daniel Tejada, Straight Up Growth

12. Consider a brand ambassador program

A great way to create authentic connections with customers is with an acquisition and advocacy program like a brand ambassador program. For example, if a user can get five people to sign up for a service or product, they become an ambassador.

These brand ambassadors can help your business acquire new users. You can reward them with swag and access to special products or services … maybe even a special event!

-Jennifer Pieniazek, Resume Now

13. Reward loyalty

You can create meaningful connections by rewarding loyal customers to show how much you appreciate them. Just like any relationship, whether it’s personal or professional, people appreciate rewards. Show your customers that they matter and are top of mind in your decision-making. That’s how you create a stronger, more loyal customer base—one that will continue to pay attention for new initiatives and future rewards.

-Alyssa Berman-Waugh, Level Home, Inc.

14. Recognize the importance of inclusivity

To create meaningful connections with customers, recognize and accept diversities within your community. Each of your customers will differ in terms of their culture, orientation, ability and life experience. It’s imperative that you celebrate these differences and welcome input from individuals of all walks of life as you advocate for equity and inclusivity. This will develop your community’s reputation and attract diverse groups in greater numbers.

Communities that cater to just one group of people almost always become echo chambers, creating a suboptimal environment for connections to form and important discussions to take place.

By listening, asking questions, and welcoming input from diverse groups of individuals, you’ll cement your community as a welcoming place for diversity and insight to flourish.

In doing so, your ability to build a rapport and create meaningful, lasting connections with your customers will blossom.

-Patrick Casey, Felix

The community management tips used in this article were gathered using Terkel.
Terkel creates community-driven content featuring expert insights. Sign up at terkel.io to answer questions and get published.



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How Online Presence Makes Your Business More Trustworthy

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Have you ever made a dining decision based on a review you saw on the internet? You may have picked a product because it seemed “more trustworthy” online. It’s also a deal breaker if it isn’t handled correctly.

Customers are more inclined to believe in your company if it presents itself well on the internet. Whether a startup or a large corporation, your online appearance and behaviour matter to your consumers if you own an offline or online company.

Online presence

Why Should Your Business Go Online?

In addition to being available for your consumers, here are other reasons to consider your online presence.

It Improves Your Company’s Accessibility

When you don’t sell anything online, a solid online presence can help you make more money from the internet if you aren’t engaged on social media.

Before making a purchase, most consumers do internet research to learn more about the company and the goods. Being at the right place at the right time is simply good business.

It Takes Care of Your Marketing and Branding

An internet presence provides a steady supply of customers for your company. Customer feedback and social media participation may help boost purchases. It’s easier for consumers to identify your online presence with a website or social media account.

It May Boosts Your Company’s Credibility

Having an online presence is essential for your organisation to be taken seriously. A startup might have difficulty being accepted as a legitimate organisation in its early stages. It’s essential to have a strong internet presence before people take you seriously. It’s easier to get quick loans at gdayloans.com.au to expand your company.

It Aids in the Comprehension of Your Target Market

When you have an online presence, you can engage with your audience in a two-way conversation to get valuable feedback or evaluations. In addition, it helps you learn more about your prospective consumers and the things they’re looking for. If a restaurant uses polls on its Facebook page, it may determine which specials and goods are most popular with its patrons.

Businesswoman building an online presence

How Can You Evaluate and Enhance Your Company’s Web Presence?

Analysing your online reputation simply means monitoring what others say about you online. Then you make it work for you.

You can monitor and enhance your company’s online appearance by following these three steps.:

Monitor Mentions of Your Business

Monitoring your company’s internet mentions can help you track what’s being said about you and mitigate unfavourable publicity. This can also help you identify communication gaps.

Google Alerts can help you track online references of your company. Set up notifications for your business/product name and relevant keywords, and you’ll be alerted promptly whenever you’re mentioned anyplace online.

Analyse Your Website Traffic

The source of your traffic (and how much) might assist you in evaluating your internet presence. It may be necessary to expand your internet activities beyond your website. For example, low social media traffic might imply a poor social presence.

Tracking your website’s traffic with Google Analytics might reveal secret traffic sources that your Google search may have overlooked. It will also help you find unnoticed remarks or backlinks.

Assess Your Social Media Engagement

Your social media presence affects your online reputation as well. Active consumers on your social media platforms help build trust and confidence.

Consider checking a company’s and a competitor’s Facebook accounts. You may observe that one firm interacts with clients while the other has a few likes but no comments. Which do you prefer?

Social media presence for startup

Bottom Line

An active social media presence gives the impression of reliability while also conveying a sense of humanity and authenticity. Your audience will be more engaged as your social media presence improves.

To keep up with your target audience, you need to be one step ahead of them online. The first step is to become well-versed in everything your consumers discover about your company through the internet. Your internet presence must be understood, monitored, and improved to reach this goal.

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Ways to Market Your Tech Company

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Tech companies need to make a name for themselves and stand out from the competition. This is no easy task, as there are many different ways to market a tech company. It’s essential to find the right strategy that will work best for your consumer tech PR needs.

This article will explore some of the most important ways to market a tech company.

Why Tech Marketing is Important

There are many reasons why marketing is essential for tech companies.

First and foremost, it’s a way to build brand awareness. To be successful, people need to know who they are and what they do. Secondly, marketing can help you attract new customers and clients. It’s also a great way to keep existing customers engaged. Finally, marketing can help you differentiate yourself from the competition. With so many tech companies out there, it’s essential to find a way to stand out from the crowd.

Social Media

Social media is one of the essential tools for marketing a tech company. It allows you to reach a large audience quickly and easily. You can use social media to promote your product or service and engage with potential customers.

There are many different social media platforms, so choosing the most relevant ones for your target audience is essential.

Content Marketing

Content marketing is another important way to market a tech company. Content marketing can be blog posts, articles, videos, or even infographics.

Creating high-quality content can help you attract attention and build trust with potential customers. You can use content marketing to educate people about your product or service and show them how it can benefit them.

Search Engine Optimization

Search engine optimization (SEO) optimizes your website to rank higher in search engine results. This is important because it can help you attract more traffic to your site and ultimately convert more visitors into customers. Many different factors contribute to good SEO, so it’s essential to research and use the best techniques.

Paid Advertising

Paid advertising is another effective way to market a tech company. With paid advertising, you can reach a large audience quickly and easily. You can use various platforms such as Google AdWords, Bing Ads, or Facebook Ads to promote your product or service. Paid advertising can be a great way to generate leads and sales.

Establishing a relationship in a business networking event

Public Relations

Public relations (PR) is managing your company’s reputation. This is important because it can help you build trust and credibility with potential customers. PR can be in press releases, media relations, or event planning.

Referral Marketing

Referral marketing is getting customers to recommend your product or service to others. This is an effective way to market a tech company because it can reach a larger audience through word-of-mouth. You can use referral programs, social media, or email marketing to promote your referral program.

Event Marketing

Event marketing is another excellent way to market a tech company. This involves planning and hosting events that promote your product or service. Events can be in trade shows, conferences, or even meetups. Event marketing can be a great way to generate leads and sales.

Original Video Content

Video content is another excellent way to market a tech company. This can be in product demos, how-to videos, or even customer testimonials. Video content is a great way to engage with potential customers and promote your product or service.

On-Site Activity

Finally, on-site activity is another important way to market a tech company. This involves having a blog, providing customer support, or even offering free trials. On-site activity can be a great way to engage with potential customers and build trust.

Final Thoughts

Marketing a tech company can be a challenge, but it’s crucial to find the right strategy that will work best for your business. This article has explored some of the most important ways to market a tech company.

Choose the most relevant strategy for your business, and start implementing them today.

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