How to use membership rewards

How to Use Membership Schemes to Learn More About Your Core Customer

A membership scheme that keeps your most loyal customers coming back for more can be a powerful part of your business’ overall marketing strategy. And when you factor in that it costs about five times as much to acquire new customers than it does to retain them, a membership scheme certainly makes sense.

Think about it: rather than trying to attract a potential customer with your brand’s back story, your USPs, and an attractive website – a process that’s paved with further sub-steps – you can just skip straight to the good stuff with your existing customers for a fraction of the cost.

Since you’re reading this, we’re guessing you need a little direction when it comes to getting the most from a membership scheme. The good news is you’re in the right place.

At Swype, we know a thing or two about the capabilities of membership schemes, having supplied dozens of brands with unique plastic membership cards over the years. Below, we’ll show you how you can use your membership scheme to gather that all-important customer data to help you refine your marketing and targeting efforts. Let’s get started…

What is a membership scheme?

A membership scheme (or customer loyalty programme) allows businesses to provide frequent return customers with free products, rewards, coupons, and advance-release products and offers as a result of their loyalty. These rewards give them an incentive to carry on doing business with you.

Utilised effectively, and a membership scheme can be a powerful way to generate customer loyalty, which in turn leads to secondary benefits like increased brand advocacy and awareness, greater revenue, and sustained customer retention. We’ll take a closer look at the importance of customer loyalty, and how membership schemes can help to cultivate it, below.

smiling young woman holding a rerwards card

What is customer loyalty?

Do you have customers that do business with you time and again? We’re willing to bet you do. Either way, that’s customer loyalty in action.

A more technical definition would be the ongoing positive relationship between a customer and a business. And that positivity is cultivated through things like top-notch customer service, quick delivery, and the trust they have in you. Basically, it’s why they choose you over your competitors.

Why is customer loyalty important?

As well as costing far less to retain current customers than it is to attract new ones, there are plenty of different reasons as to why customer loyalty matters. Let’s look at the main ones below…

Increased revenue

It’s been said that returning customers spend almost 70% more money on products and services than first-time customers. As a customer buys from you over time, they’re more willing to trust in you, and that trust translates into purchasing from you in higher quantities.

Greater word of mouth

Returning customers are more likely to tell their friends, family and colleagues about the great website they just bought new clothes/furniture/sports equipment from. This knock-on, word-of-mouth marketing helps you get your name and brand out there without you having to lift a finger. Don’t forget to keep these brand ambassadors sweet as a way of rewarding them for their referrals either…

More share-of-wallet

A solid rule of thumb: every pound spent with you is a pound not spent with your competition. When loyal customers choose to buy from you, your competitors lose out as a result. The resulting figure is called the share-of-wallet; make sure you always have it by providing your customers with a service that prompts them to go with you over others.

scanning loyalty card

Increased customer feedback

Questionnaires and surveys are a great way to get some insights into what is and isn’t working about your business. And it’s often the case that your most loyal customers will be the ones to provide you with this feedback.

After all, they like your brand and want to have a hand in improving it. And as well as giving them the chance to do their part, you’ll be provided with actionable advice you can then use to your advantage too.

Using membership schemes to learn about your customers

There are all manner of different membership schemes out there that you can use to glean vital insights from your customers. Below, you’ll find a selection of commonly used schemes you can use to reward customers and improve your own offerings. Who knows, you might find your next idea right here.

Point-based loyalty programme

One of, if not the most popular loyalty programme; the point-based programme lets frequent customers earn points that they can that turn into rewards such as discount codes, freebies, or other special offers.

It’s best to keep the relationship between points and tangible rewards simple and user-friendly to avoid confusion and unhappy customers. It’s also not necessarily suited to every type of business; it tends to work best for frequent, short-term purchases such as at fast-food restaurants.

Tiered-loyalty programme

A tiered system is one that rewards a customer’s initial loyalty and then encourages them to make further purchases. As you increase the value of the rewards with each tier, you essentially give customers a goal. And the message is clear: the higher the tier, the more exclusive and lavish the rewards are.

Generally, tiered programmes provide more long-term value. As such, they’re more geared towards high commitment, high-price point businesses like airlines, hospitality businesses or insurance companies.

man reading business card

Paid (or VIP) loyalty programme

A membership scheme that requires payment might make some customers balk, but hear us out. It’s been shown that 62% of consumers are more likely to spend more on a brand after joining a paid loyalty programme. And it’s a model that Amazon Prime has used to incredible effect, one that can be used across many kinds of different businesses too.

The most successful paid loyalty schemes have the following in common:

  • The benefits outweigh the fees
  • Members maintain their loyalty for things such as personalised experiences and members-only content
  • Members are regularly engaged. A solid paid scheme should have a high degree of interaction to increase its own value

Value-based loyalty programme

Coupons and discount codes are all well and good, but certain companies may find speaking to their customers’ hearts – and not just their wallets – could pay off more. In a value-based loyalty programme, the business connects with the values it shares with its customers. For instance, it may involve donating a percentage of purchases to charity or welfare programmes.

While this doesn’t reward customers in the same way as other schemes, aligning its values with its customers can be a powerful thing, especially where loyalty is involved.

Looking to make your customers part of your brand? With Swype’s membership cards, you can give back to your most loyal customers through exclusive benefits and rewards. And what’s more, we can turn it into a handy data-gathering tool, so you can better understand their habits and actions – all of which means better business for you and your customers.

Swype is one of the UK’s leading plastic card and print specialists, delivering first-class service and innovative solutions. For more information or to learn more about our products and services, visit the homepage or call 01744 815475.