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Before we share how to grow your loyalty program, let’s run a refresher on loyalty program promotion, and exactly what it means.
What is Meant by Loyalty Program Promotion?
Loyalty program promotion refers to the strategies brands use to grow their loyalty program membership. This includes various marketing initiatives aimed at attracting new members and boosting participation among existing ones.
The main purpose of these promotions is to expand the customer base and improve retention. In the end, the ultimate goal is to create a strong community of loyal customers who engage with the brand, leading to repeat purchases and lasting loyalty.
To achieve these goals, companies often implement strategies like targeted marketing campaigns, referral incentives, and limited-time promotions.
Our team’s research reveals that 74% of consumers are more likely to join loyalty programs that offer attractive sign-up bonuses.
For example, Sephora’s Beauty Insider program offers new members a welcome gift, while Dunkin’ rewards current members for referring friends.
These strategies highlight how effective loyalty program promotions can drive significant membership growth and strengthen customer loyalty.
Tips to Promote Your Loyalty Program to Existing Customers
Make the Most of Brick-and-Mortar Store
A retail store is one of the best places to promote your loyalty program to both existing and new customers.
It’s straightforward for customers who regularly visit your business to sign up, deepening their loyalty, increasing spending, and rewarding their patronage.
Traditional print advertising materials like buntings and banners strategically placed around your store, especially near checkout counters, can have a significant impact.
Service-based businesses without a physical location can still effectively use traditional print advertising by distributing flyers after services are completed.
Physical advertising materials build trust and typically yield higher conversion rates compared to online versions. However, it’s essential to plan an omnichannel approach:
- Use QR codes on flyers or buntings for customers to easily sign up.
- Set up a kiosk at a physical location where customers can sign up on the spot.
- Allow customers to sign up with the assistance of staff members.
Remember, an omnichannel strategy is crucial for seamlessly integrating physical and virtual experiences. We’ll discuss this concept further later in the article!
Employees are the First Point of Contact For Customers
On top of promoting it in your retail store, the next step is to train your employees or staff to encourage signups. The key to doing this is to create a standardized SOP (standard operating procedure) for your staff. It could go something like this:
- Introduce the loyalty program, and explain the benefits of signing up. Do this ideally when the customer is checking out their items.
- Have an easy and convenient way for customers to sign up. This could be done via QR codes or through a member of staff.
- Next, be sure to reward new members with a ‘welcome gift’, as it can set the tone for the loyalty program.
Remember, ask for as little information as possible to increase the likelihood of customers joining. You can always input more information later.
Utilize a Loss Leader to Attract Signups
A loss leader strategy is an effective way to keep customers engaged and encourage organic sign-ups. Take Costco, for example. A significant portion of their annual profits comes from membership fees.
They connect with the working class by offering their famous hot dogs for just $1.50, along with other affordable food staples. While they don’t make a profit on their food court, it serves as a value-added service that keeps customers coming back.
This approach has even led to viral YouTube videos featuring Costco food, which generates buzz and attracts more customers. You can adopt a similar strategy and learn from the success of established brands like Costco!
Offer an Irresistible Incentive for Signups
A great way to promote your loyalty program is by offering an irresistible incentive. What does that mean? It means providing a reward that customers can claim immediately just for signing up or even for sharing their phone number, email, and name.
The type of incentive can vary by industry. For example, retail and eCommerce businesses often find success with discounts that can be applied right away. In contrast, the food and beverage sector tends to attract customers with freebies, like complimentary coffee.
Businesses can use A/B testing to find out which rewards resonate best. This involves offering different incentives to see which ones lead to more sign-ups.
Whether it’s coffee, desserts, vouchers, or discounts, testing different options helps identify what works best so you can focus your efforts on what drives results.
Additionally, consider running polls in-store or online to gather feedback from existing customers about their preferences. Your customer data is invaluable when deciding on the most appealing sign-up incentives!
Use Omnichannel & Make Registering as Easy as Possible
In this day and age, having an omnichannel loyalty program is crucial. It simplifies the process for customers to sign up and engage with your brand by seamlessly connecting offline and online experiences.
For example, you might order food through an app and pick it up in-store, or join a loyalty program in-store and use an app to redeem rewards. Even something as simple as scanning a QR code to join a loyalty program falls under omnichannel.
However, many businesses make the mistake of complicating the sign-up process by requesting too much information upfront. This can discourage potential customers.
Instead, keep it simple: ask for just their name, phone number, and email. As you continue to interact with them—whether through gamified tasks, online orders, or other means—you can gradually collect more information to enhance their profile.
To successfully grow and promote your loyalty program, start with a straightforward approach and make it as easy as possible for customers to join.
Utilize Gamification & Referral Incentive
Next up is gamification, which is a fantastic way to boost your loyalty program. Gamification involves creating engaging games that reward users for their participation.
This approach encourages interaction and helps increase customer loyalty, lifetime value, and more.
Consider it incorporating daily challenges, tasks, missions, or even augmented reality (AR) games. Through these activities, you can motivate customers to refer friends or share your program on social media.
Gamification is also a powerful tool for word-of-mouth promotion. When people enjoy your program, they’re likely to recommend it to friends and family, especially if there are rewards involved.
A great example of this is Omusubi. We at KlikNGo helped them leverage gamification and referrals to significantly grow their membership.
By running a fun sushi-eating challenge where customers could earn rewards by enjoying a set number of plates weekly with friends and family, Omusubi saw over 40,000 new members join each month during the campaign!
Make Value-Added Services Part of the Perks
Value-added services are additional benefits or features that enhance the overall customer experience beyond the core product or service. These services can significantly boost your loyalty program and attract more members.
Take airlines, for example. Many of them operate in a commodity-based market, meaning they offer similar products with only slight variations.
To differentiate themselves, they heavily rely on loyalty programs and value-added services.
Airlines grow their loyalty programs by offering perks like exclusive airport lounges, discounted hotel stays, and other travel-related benefits that aren’t directly linked to flying.
Customers are often drawn to a particular airline’s loyalty program because it provides access to private lounges, faster check-ins, valuable rewards, and point systems.
This approach is so effective that it can greatly increase customer lifetime value. Many travelers will choose their preferred airline over cheaper options simply to take full advantage of these value-added services.
Ways to Promote Your Loyalty Program to New Customers
This next section will talk about ways to promote your loyalty program to new members, instead of existing customers – making the points slightly different.
Try a Coalition Loyalty Program & Work With Partners
To effectively market your loyalty program to new customers, consider partnering with brands that operate in the same industry but aren’t direct competitors.
This strategy works well when the brands offer complementary products. For example, if you run a bakery, teaming up with a coffee brand makes sense. Since there’s no competition between you, these brands are more likely to collaborate, allowing you to reach each other’s loyal customers.
Get creative with your partnerships! A great example is the Malaysian ice cream brand “Inside Scoop,” which frequently collaborates with different brands to create limited-edition ice cream flavors, like caramelized soy sauce ice cream. They even worked with Malaysian eWallet provider, Touch N’ Go! The possibilities are endless if you think outside the box.
As shown in the graph below, Inside Scoop’s search appearances on Google increased during these collaborations, highlighting that this approach not only helps grow loyalty programs but also generates excitement and buzz around your brand!
Content Marketing & Collect Email Leads
Another effective strategy is to collect email leads through content marketing. Content marketing involves creating online content to reach a broader audience and target various stages of the customer journey. One excellent way to do this is by writing blogs on your company website (like this one).
This method is effective because it allows you to target visitors who are:
- Interested in your brand or industry: These are people who are already engaged with what you have to offer.
- Actively searching for solutions: They have higher search intent and are looking for answers, rather than being bombarded with ads.
- Facing a problem: They need help, and your content can provide the solutions they’re seeking.
Typically visitors from search engines are of higher quality as opposed to those from other channels like social media.
Focus on providing valuable information that helps your readers with topics related to your niche. If they find your content helpful, they’ll be more likely to subscribe to your email list.
Once you have their email addresses, you can nurture these leads and encourage them to join your loyalty program.
Here’s a link to an article that can help you get started with using your blog to collect email leads!
Try Out Luck-Based Gamification
Luck-based gamification is a fantastic option if you run a retail store. You could introduce scratch-off tickets or a lucky draw, allowing customers to participate by joining your loyalty program or providing their email. Just remember to keep the sign-up process simple and ask for minimal information.
This type of gamification works particularly well at events and roadshows, as it attracts potential customers. To enhance its effectiveness, consider offering a consolation prize to encourage participation, even for those who don’t win.
While it may seem costly, keep in mind that the average cost to acquire a loyalty program member can be as high as $86 (according to our data). In this context, gamification can be a worthwhile investment.
Be sure to offer rewards that are tailored to your target audience. Analyze your data to understand what your customers value most!
Why It’s Important to Promote & Grow Your Loyalty Program
Promoting and growing your loyalty program is vital for maximizing customer lifetime value and maintaining a competitive edge. Research shows that boosting customer retention by just 5% can increase profits by more than 25% (link is a PDF file).
In low-margin industries like grocery chains, retaining existing customers is often five times more cost-effective than acquiring new ones. A successful loyalty program can turn casual shoppers into brand advocates, driving organic referrals and expanding your reach.
Effective loyalty programs also gather valuable customer data that can give insights for personalized marketing strategies. Brands can do this by analyzing purchasing behavior and preferences, which they can then tailor their offerings.
Overall, promoting and growing your loyalty program strengthens customer loyalty, personalizes experiences, drives new acquisitions, and solidifies your market position.
