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How to «measure» a loyalty program?

Simple discounts are like a painkiller, quick but short-lived - and don't really solve the problem of building loyalty.

How much do product range, discounts and service quality influence loyalty? Why do customers leave? How can customers be retained? These are questions that concern the owner of a small online shop as well as a large retailer.

Loyalty programmes are still one of the most important arguments when choosing a shop. Some of the most popular bonus schemes include: permanent or cumulative discounts, cashback in the form of bonuses or cash, and "free goods" when customers buy multiple items. Recent studies have shown that bonus schemes do not influence purchase decisions in the fashion, car and parts, optical and pharmacy categories. Some consumers stick with tried and trusted brands, while others easily switch to cheaper brands, including those that are completely new to the market. These sectors use different approaches and programmes to retain customers. Let's take a closer look at customer loyalty and the metrics that can characterise it.
Delivering on promises
Research shows that "customers who actively engage with brands and their loyalty programmes shop 90% more often, spend 60% more per transaction and are five times more likely to choose that brand in the future". Customer loyalty doesn't depend on wow effects. They stay with those who keep their promises, don't lie (obviously) and solve their everyday problems. The effectiveness of a loyalty programme is first and foremost shown by the average check metric, or rather its growth.

Working with customers means working with data, and a company's job is to keep this data and manage it properly. This is often a problem even with CRM. TONOP software analyses and processes intelligent contact routing data. It helps to identify correlations between customer characteristics and buying behaviour.

Selling "time"
How we spend our time says more about who we are than how we spend our money. Time is a scarce resource. Selling "time" rather than a product can make a customer more likely to buy. A product advert that shows how well the product will help you spend time, relax and be free from worry will have a greater impact than a story about saving money. Monitor social media, looking for trends and common issues that customers bring up beyond your social media pages.

Look at customer retention rates. This metric shows how effective a business is at retaining existing customers as part of its loyalty programme.
Annual incentive schemes
Annual incentive schemes encourage long-term customer loyalty by accumulating bonuses or rewards throughout the year. This keeps customers loyal and motivates them to make regular purchases.

You need to set up a system that automatically credits discounts and rewards to the customer's card or account. Such a system can be integrated with the company's billing or cash system. It is important that the terms and conditions of participation and rewards are clear and transparent to customers.

The analytics platforms Google Analytics and Adobe Analytics allow you to track customer behaviour on the website and analyse customer buying patterns.
Cashback with rewards or cash
Cashback programmes became popular in the 1980s with the introduction of the first credit cards. Cashback returns part of the money spent directly to the customer. This approach can't help but affect customer sentiment, creating a sense of value and savings and encouraging repeat purchases. Analyse how often members return to make new purchases. Accounting and refunds need to be set up, which requires a robust IT infrastructure and transparency of terms and conditions for customers. This is where TON OP doo ltd's digital product, the TONOP programme, can help. This modern, intelligent application automates most business processes: management, business planning, marketing, sales, accounting and monitoring.

Determine how much each loyalty programme member has contributed to the company's income, how long a particular customer buys goods in your shop, calculate the lifetime value of each customer (CLV). Collect and analyse data on customer behaviour and interaction with loyalty programmes.

Exclusive offers
Exclusive offers create a sense of privilege, uniqueness and encourage repeat purchases. Proper customer segmentation, personalised offers and effective communication are key to the success of such programmes.

What does it take? First of all, you need to properly analyse your customer base and identify the segments to which you want to send exclusive offers. TON OP's platform allows you to automate mailings, measure emotional response to advertising campaigns, optimise creative and conduct A/B testing with sales uplift measurement.

The implementation of loyalty programmes requires careful planning, analysis of the customer base and optimisation of internal processes. To maximise the effectiveness of loyalty programmes, it is important to take into account the specifics of the business and the needs of the target audience.
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