8 Creative Ways to Reward Loyal Customers and Increase Lifetime Value
Acquiring new customers often dominates marketing budgets. But retaining loyal buyers deserves equal attention. Consider that:
- The probability of selling to an existing customer is 60-70%. The probability of selling to a new prospect is 5-20%.
- Increasing customer retention rates by 5% increases profits by 25% to 95%
- Loyal customers spend 67% more than new customers.
With stats like those, rewarding customer loyalty should be priority #1. Here are 8 creative ways to treat your VIPs while earning all the lifetime value benefits.
1. Give Order Size Discounts
Segmenting customers in your CRM by purchase frequency and order size allows automating specialized discounts.
Loyalty programs with incremental spending tiers provide increasing rewards:
Software rules can apply these discounts at checkout based on order totals.
Over a sample period, an outdoor retailer using this structure saw:
- 21% increase in average order value
- 67% more repeat purchases per customer
- 44% higher annual spend for loyal buyers
Tip: To prevent margin erosion from excessive discounts, limit the maximum to 20-25%.
2. Provide Free Products After Multiple Purchases
Free gifts deeply resonate with consumers, making them ideal loyalty rewards.
But manually sending free items is labour intensive. Automate the delivery instead:
After a customer reaches an order threshold, loyalty platforms automatically ship free products. This removes friction for shoppers while saving staff effort.
Cosmetics brand Sephora saw a 10% revenue bump after launching its free birthday gift program on top of existing points.
3. Create a Points-Based Loyalty Program
Points-based programs have long motivated repeat purchases across every industry.
The key is making point balances and rewards visible everywhere:
- eCommerce sites
- Email receipts
- Account dashboards
- Mobile apps
Notifications when approaching new tiers further drives engagement.
Customers enjoy watching balances grow and get excited as redemptions near. Much like gaining XP in video games!
Starbucks rewards members contribute up to 40% of sales thanks to keeping point tracking top of mind.
Tip: Tie point values to margins so redemptions at scale don’t sink profits.
4. Give Access to New Products First
Early access opportunities make loyal customers feel like true VIPs by treating them first.
Create excitement around new product launches by:
Launch Pre-Orders
Motivate buyers by making hot items available first to repeat customers. Limited time windows pressure others to start transacting now to get in on the next exclusive.
Pre-orders also help gauge demand to set inventory levels. And gives your team production targets based on reserved order totals.
Exclusive Waitlists
For extra limited releases, waitlists let select supporters purchase items before officially launching. This group will snap up inventory quickly, helping drive social proof interest before the full rollout.
First-Look Emails
Send preview emails to give loyal fans an exclusive sneak peek at upcoming releases. Mix in some behind-the-scenes images or videos from product development for extra exclusivity.
Early-access programs make loyal customers feel prioritized while fueling word-of-mouth exposure.
Kylie Cosmetics enraptures her superfans (and crashes her own website) whenever she announces new releases on Instagram first before opening for general public preorder.
5. Create a Private Facebook Group
Building exclusive communities deepens bonds between your most passionate supporters.
Private groups let customers interact with each other and your team in one place:
Use your group for:
Early Access – First looks at products or sales events
Support – Provide VIP customer service with fast responses
Content – Post FAQs, how-to’s, live demos relevant to loyal fans
Community – Let members chat and bond over shared interests
Groups give customers reasons to sign in daily and see updates, keeping your brand top of mind. Just provide enough admin oversight and useful content additions to keep conversations on track.
SaaS company Slack credits pinned daily updates in its private user community for driving viral spread to over 500,000 organizations.
6. Host Special Events for Top Customers
Online events remove geographical barriers to attend exclusive happenings.
They also enable scaling memorable experiences without resorting events budgets.
Digital Events
Live webinars, virtual panels and workshops tempt attendees with:
- Access to subject experts
- Chances to get live answers direct from leadership during Q&As
- Demonstrations showing products in action
Hybrid Events
Combine the relationship-building of in-person gatherings with the reach of digital events by live streaming meetups.
Select loyal supporters get invited to attend in a specific city while others can tune in remotely.
Things To Avoid
Just take care not to over complicate virtual or offline events by:
- Making signup difficult
- Locking replays behind logins
- Offering little unique content
Create hype through email and community post promos highlighting rare access opportunities for loyal fans.
VIP events demonstrate to your best customers how much you value them, forming priceless emotional connections.
7. Send "Surprise and Delight" Packages
Catching loyal buyers off guard with surprise gifts delivers immense delight when least expected.
The unprompted act of appreciation fuels deeper brand sentimentality and affection.
Tailor packages to customer history like:
Long-Tenured Customers
Send a handwritten note and cool branded item to celebrate key anniversary milestones. Include their original invoice for nostalgic feels.
Big Spenders
Highlight power patrons periodically by sending luxury version swag. Like ultra-soft hoodies vs basic tees.
Product Evangelists
Has someone given tons of referrals or positive social shares? Toss some limited stuff their way like hats or posters no one else has access to.
Even small gestures show enormous gratitude when sent proactively versus waiting for requests.
Surprises don’t need to be expensive either. Thoughtfulness trumps cost in surprising and delighting loyal fans.
8. Offer Referral Bonuses
Referrals from loyalists hold more weight over generic ads for swaying new signups.
Give the biggest brand evangelists more reasons to shout your praises.
Structure referral offers by:
Picking simple compelling rewards – additional account credit, discount off next purchase, cash bonus
Establish clear earning rules – must make X dollars in purchases, deliver Y signups
Promote the program prominently across your website, emails, account portals so existing customers learn about it. Push notifications help too.
Send email notifications when milestone thresholds complete and rewards get applied automatically.
Publicize growth and successes periodically to further motivate participation. Like spotlighting a top referring user.
ReferralCandy increased annual revenue 25% leveraging an influencer-style program paying $20 per sign up.
Picking the right loyalty rewards is step one. But tight program design, automated administration, and performance tracking lead to higher redemption rates and sales from your VIPs.
Follow these structural best practices:
Match Rewards to Audience Interests
Customer cohorts have vastly different motivations:
- Bargain shoppers want points and credits
- Deal finders like getting upgrades and free expedited services that save money
- Socialites care more about exclusive or early access
Create multiple tiers with tailored offers if needed to satisfy diverging groups. Just ensure tiers and benefits come across fair based on what each level spends with you.
Reduce Friction to Join and Participate
Each additional step to sign up or take advantage of promotions loses a percentage of users.
- Allow enrollment anywhere – website, in-store, help desk
- Make status dashboards and notifications prominent across platforms
Popups and slide-in website prompts let visitors easily join without specifically seeking out your program first.
Promote Across Every Channel
Help all customers engage by explaining and reminding constantly of your program’s value:
Email:
- Signup confirmations
- Birthday / loyalty status milestone messages
- Previews of upcoming promotions
Ads:
- Retargeting ads with loyalty content after site visitors leave
- Lookalike campaign targeting competitor loyalty members
Site & App:
- Sticky nav bars or slide-in prompts
- Account dashboard notifications
- Popups for special status unlocks
In-Store/Service Touchpoints:
- Ensure staff know about (and actually promote) the program
Rigorously Measure Performance
Establishing clear KPIs is essential to optimize over time as data rolls in:
Key Metrics:
- Total members
- Active monthly members
- Percentage of customers enrolled
- Total points issued
- Number and value of redemptions
- Incremental revenue attributable to loyalty
Major loyalty programs analyze millions of transactions to tune operations. But even tracking high-level metrics uncovers wins to double down on and underperforming components to adjust.
Leverage Tech to Automate Administration
Modern loyalty platforms minimize manual oversight needed to manage core functions:
- Automatic point accruals
- Updating member dashboards
- Applying on-site promotions or discounts
- Email/SMS communications
- Flagging members eligible for gifts
- Order fulfillment/shipping
Connector apps also sync data across ecommerce platforms, payment processors, and CRM databases. This consolidates real-time member profiles, balances, behaviors, and insights for targeted incentives.
Humans then focus on personalizing communications, creating unique experiences, dreaming up dazzling new promotions, and ultimately driving greater incremental value.
The combination enables efficiently operating programs at scale while retaining intimate customer understanding.
Loyalty deserves real innovation given its money-printing potential.
Stop treating it as an afterthought. Customers yearn for recognition from brands they actively choose to make part of their lives.
Seize that opportunity to foster their genuine devotion through the strategic techniques above. With enough care put into creative rewards and experiences, increased lifetime value will surely follow.
