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Research by PwC shows that loyal customers are becoming increasingly difficult to come by. Almost three out of ten customers are more likely to try new brands, and 26% said that they stopped purchasing from a specific brand or organization in the past year. This seems to be increasingly common among younger generations.
A key to providing positive customer experiences and increasing retention is through customer loyalty programs. In the same study, PwC found that the presence of loyalty programs with flexible rewards was the second most important factor for customers when it comes to personalized experiences. One study found that, of companies that measure ROI, 93.1% of companies reported positive ROI from their loyalty program.
Loyalty programs can operate through multiple marketing channels like social media and websites, but text messaging offers great opportunities for more direct and impactful reach. SMS loyalty programs are cost-effective programs people subscribe to using their mobile phone numbers. Once subscribed, they receive SMS texts with rewards and offers.
Learn how to boost customer engagement and retention by setting up a text-based/SMS loyalty program with this guide.
Why SMS loyalty programs work
SMS — or text-based — loyalty programs are simple to run, and they’re highly effective. SMS has a 95% open rate and a 59% click-through rate (CTR). This is a significant difference from email, for example, which only has a 16% open rate and a 9.22% CTR.
SMS works because it’s a personal way of communicating with your customers. They’ve given you their phone number, which signifies a certain level of trust. It is an opportunity to reach customers inside their inner circle, as people normally use SMS to communicate with family and friends.
With a text message marketing strategy, you can send targeted, personalized messages, collect zero party data, and segment your audience based on this information.
Finally, you can use MMS (multimedia messaging service) to send more than just text copy to your followers’ mobile phones. Include photos and videos in your messages, too, to make your outreach especially engaging.
How to set up your SMS loyalty program
Setting up a text message loyalty program for your brand involves a simple four-step process, from branding to design and implementation.
1. Brand your program with a memorable name
Your loyalty program should be instantly recognizable, making it stand out from the competition. Branding your SMS loyalty program begins with finding a name that’s unique and appealing to potential customers and subscribers.
Your name should be memorable, so customers can easily look it up when they’re interested in signing up or want to learn more about it.
2. Adopt an SMS software program
To be able to effectively run your SMS loyalty program, you need a solution like Community. Community makes it possible for you to build your audience by using a designated telephone number. You can easily segment members of your audience who sign up for your program, making it easier for you to target them and offer rewards and offers.
3. Outline how customers can sign up
Before you dive into the fun of giving rewards, handle the logistics. Set up sign-up methods so customers can start winning points and determine what rewards are feasible for your company to give.
Some typical sign-up methods include having customers:
- Send an SMS message to sign up
- Tick an opt-in check box at checkout
- Fill out a sign-up form on your app or website
4. Choose rewards to offer (and how customers can earn them)
Once you’ve figured out how to get people subscribed, you’ll need to figure out what the rewards and benefits look like. Some examples include:
- Discount codes and coupons
- Free merchandise with every $X spent
- Automatic participation in giveaways and competitions
Collect feedback from customers with regular check-ins and surveys to see which loyalty perks your audience wants and test different rewards to see what resonates. Know what your competitors are offering, too, and be sure to offer something of more value.
LA-based rock duo The Score offered their loyal fans exclusive access to merch from their 2019 The Pressure Tour, and it sold out in less than 24 hours.
Beatles legend Paul McCartney created an exclusive product solely for his Community members — a limited edition violet vinyl of his album McCartney III. He sold all 2,000 copies in less than 10 hours.
Once you determine the rewards your audience wants, set up the rules for receiving these benefits.
A few examples of loyalty program rules include customers receiving points when they:
- Sign up for the loyalty program
- Are a part of the program for a set period of time
- Have made a set amount of purchases
- Send customer referrals
Share these reward rules on your loyalty program’s landing page, so customers have clear expectations from the start.
Roll out a marketing campaign to attract sign-ups
Launch an SMS campaign to people who’ve opted into text to promote the program, or use other marketing channels like social media and your website/app to attract sign ups.
For brick-and-mortar businesses, you can even promote your program in-store. E-commerce companies can include opt-in forms for the loyalty program at checkout.
4 tips for keeping loyalty program members engaged
SMS loyalty programs are pretty simple to implement, but the work doesn’t stop after launch. Keep loyalty program users engaged, and drive customer retention with these tips. Use regular communication, data collection, and special offers to encourage loyalty program usage from returning customers.
1. Welcome new subscribers
When someone signs up for your loyalty program, they’re essentially pledging their loyalty to your brand. Welcoming them on board is a great way to say thank you for their show of confidence.
Set up autoresponders — an automatic SMS response — to go out with every new sign up. These messages are a great opportunity to ask questions about how to make your loyalty program valuable, like “what rewards would you like to see?” It’s also a good opportunity to reaffirm the benefits of your program.
With Community, you can trigger an automated response to a member who texts you a specific word or phrase. Read more here.
2. Collect regular feedback
It’s always a good idea to check in with your loyal customers. Check to see if they feel they’re getting value from your program, and ask them how you could improve. Collect feedback at regular intervals by sending out surveys or SMS polls.
3. Remind customers about their points balance
In addition to collecting feedback, send occasional reminders about customers’ point balance. If they have any points that are about to expire, let them know, and encourage them to use their points.
You can also let them know how close they are to being eligible for a certain reward or benefit. If they’ve already collected enough points for a reward or are already eligible for it, inform them.
4. Offer occasional bonus perks
To boost activity, share special incentives. You could roll out a double points day to encourage repeat customers and purchases. Or message your audience on their birthdays and gift them extra coupons and discounts.
Setting up your own SMS loyalty program with Community
With Community, you can create a successful loyalty program using your customers’ most personal channel — texting.
Create a rewards program subscriber audience segment on our platform, so you can easily reach your most loyal customers.
Click here to get your own Community number and try it out.