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A 5% increase in customer retention can increase profits by 25% to 95%. Both loyalty programs and SMS are perfect channels to delight your customers and build relationships. Here’s how to effectively use SMS to support your loyalty program.
Customer loyalty is more important now than ever before. As you have probably heard many times, it’s anywhere from five to 25 times more expensive to gain a new customer than to retain an existing one. With recent changes in the digital marketing ecosystem, such as the iOS 14 update, costs of acquiring new customers are higher than ever.
Many brands have mitigated these changes by developing brand loyalty through amazing customer experience, loyalty programs, and marketing to existing customers. These efforts don’t go unnoticed. Research done by Bain & Company found that a 5% increase in customer retention can increase profits by 25% to 95%.
Operating separately, loyalty programs and SMS are perfect channels to delight your customers, build relationships, and increase revenue. And when you combine them, they are even more powerful.
In this post, we explore how to effectively use SMS to support your loyalty program.
SMS has an open rate of 98%.
This is because SMS marketing is the most personal digital marketing channel. Alongside group chats and one-to-one convos with loved ones, your marketing messages are amongst the most personal interactions, getting in the literal hands of your customers.
Because of the intimacy of SMS, brands need to go above and beyond to make sure all SMS communications seem personal. When done correctly, SMS will enhance the customer experience — which drives revenue and cultivates deeper customer loyalty.
For example, brands can use a combination of live agents and well-thought-out automation, made possible by powerful segmentation and filtering, to create the most personalized experience for their customers.
Personal channel + personal messages = loyal customers
We all have a brand that gives us that warm and fuzzy feeling. It’s your go-to website or store. You love the vibe they put out through their marketing. You feel like your personality fits in with the company.
We all have that brand — and that’s the goal for your brand.
Loyalty programs give the customers that have the warm fuzzy feeling for your brand an even deeper connection. They literally get rewarded for interacting and shopping with you. But loyalty programs go beyond making a community around your brand. It can tap into customer motivations to increase repeat purchases and customer lifetime value (CLTV). Loyalty programs can consist of points, rewards, and tiers to motivate customers by awarding for:
Brands have seen incredible results from their loyalty programs. For example, in just a year, skincare company esmi Australia’s loyalty program delivered:
Overall, loyalty programs are the perfect way to keep your customers coming back to shop again and again.
When brands use SMS and a loyalty program together, you combine the most personal marketing channel with your most loyal customers. SMS represents a huge opportunity to increase engagement with your loyalty program.
Through an SMS marketing platform, brands can easily segment customers and send targeted text messages based on loyalty status or other events. Powerful segmentation, filtering, and automation combined with loyalty and customer information creates hyper-personalized SMS messaging that drives repeat purchases and improves your CLTV.
So, how can SMS be used to support loyalty programs?
Customers who redeem points from a loyalty program have a total spend of 2.5x more than a non-member. Increase your customers' point redemption (and total spend) by sending customers a text letting them know when they have points available to redeem or bonus points for birthdays or other special events.
If you have a tiered loyalty program, SMS updates can be a great driver in getting your customers to reach that next tier. Encourage your customers to spend more by sending them a text letting them know what they need to do to unlock their next tier. Or, if they have reached the next tier, send a text explaining the new benefits and rewards they now have.
When you combine your loyalty program data and SMS messaging, you reach a new level of personalization through an immediate and personal channel. Using segmentation and filtering, you can deliver personalized messages to your loyalty program members that are relevant and meaningful to each and every customer. Providing a consistently personalized experience will help customers build a deeper emotional connection with your brand and improve your CLTV.
Use the impressive open rates of SMS and the incentive of rewards to encourage your most loyal customers to take action. Send a text asking your customer to review their latest purchase, follow along on social media, or share their referral discount code with a friend in exchange for reward points.
Share the love between your marketing channels by cross-promoting. Similar to how brands use Deep Link to easily grow their SMS subscriber list through social platforms, cross-promoting your loyalty program through SMS (and vice versa) is the perfect way to grow your program.
Marketing that focuses on building long-term relationships will result in improved CLTV, brand loyalty, and revenue growth. SMS and loyalty programs are incredible channels to create personalized, delightful experiences for your customers. When you use them together, you create a marketing masterpiece.
Ready to cultivate deeper customer loyalty? Explore how Voyage helps brands engage their customers through SMS marketing.
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