Many successful online stores and businesses underestimate the value of a loyalty program, believing that their existing popularity will sustain them. However, this belief is often disproved, as loyalty programs are known to increase revenue by 15% to 25%. Why does this happen? Because greater customer engagement often results in higher spending. To back this up, the Pareto principle points out that about 80% of your profit typically comes from just 20% of your customers. This shows that repeat customers tend to spend more, which can greatly increase your earnings. That's why U.S. companies spend over $2 billion yearly on customer loyalty programs. 

The important question is: What type of experience should we create to encourage increased spending? This article will discuss how identifying the right customers, building emotional connections, using Instagram DM automation, and offering VIP-tiered memberships can significantly boost customer spending and increase repeat purchases.

Table of Contents:

  1. Finding the Right Customer: Explore the significance of loyalty programs in enhancing customer retention and increasing sales. 
  1. Building Strong Emotional Connections: Learn how the emotional aspect of customer loyalty can strengthen the bond between customers and the brand. 
  1. Personalization With Retargeting & Gamification: Understand the importance of personalization in creating unique customer experiences and discuss strategies like retargeting and gamification to enhance engagement.
  1. Streamlining Sales With Instagram DM Automation: This section details how automated messaging can enhance customer interactions, reduce friction in the buying process, and increase sales.
  1. VIP Tiers Membership: Learn how tiered rewards can motivate customers to spend more, the psychological impact of such programs, and examples of successful VIP membership strategies.

1. Finding the Right Customer 

Loyalty programs have long been a strategy to enhance customer retention and increase sales. By creating a deeper connection with customers, these programs reward repeat purchases and provide valuable insights into consumer purchasing patterns. We can learn from a study done by Harvard University in 2021 that looks closely at the shopping habits of 10,000 customers from a well-known U.S. retailer. Generally, a loyalty program has 2 customer segments: consolidators and upgraders. Consolidators refer to customers who start buying more products from the retailer, possibly products they used to buy from other stores. On the flip side, upgraders are customers who didn’t increase the number of products they bought but began upgrading or purchasing premium versions of the products they have been buying. These customer types are highly profitable, with the loyalty program boosting their spending by about 50%.

How can you enhance customer insights? Getting a handle on what makes your customer’s return is all about diving into the data with a good CRM dashboard. With the data provided, you can start by breaking down your customer base into different groups based on what they buy, how often they shop, and their overall engagement. You can analyze by looking at the metrics, such as the number of impressions, CPM, CPC, viewed products and added to carts. This lets you spot your true customers and determine who might need a nudge to become one. If you notice some trends, like a surge in interest in certain products at certain times, you can plan better, stock up, or tailor your promotions. To do this, you can use Ako Marketing: Loyalty and Retargeting CRM Dashboard to analyze and segment your customers. 

2. Building Strong Emotional Connections 

At the end of the day, customers make purchasing decisions based on their heart. When customers feel a strong bond with your brand, they're more likely to pick it over competitors. A loyalty program that delivers engaging and personalized experiences can strengthen your customers’ emotional bond. Personalization plays a crucial role. Creating customized messages and rewards can make them feel special. This can help strengthen the emotional connection and increase the likelihood of repeat purchases. 

Incorporating a review platform like Judge.me into your strategy can further amplify this bond. Reviews are a powerful medium for customers to express their feelings and experiences. By encouraging customers to leave reviews and actively responding to them, you can show that you value their feedback and are committed to meeting their expectations. This two-way communication improves your offerings, builds trust and reinforces the emotional connection, making your customers feel even more connected and loyal to your brand.

3. Personalization with Retargeting & Gamification

With the rising numbers of Shopify stores, the ability to offer personalized experiences has become a crucial strategy for standing out. It's all about knowing what your customers want and giving them a tailored experience that feels just right.  Combining personalization, retargeting and gamification can make customers feel like they're getting a one-of-a-kind experience. One way of making them feel valued is by showing that you remember their birthday. 

In Ako Marketing: Loyalty & Retargeting, you can customize a birthday celebration email with special rewards to make them feel more valued! It's a personal touch that makes them feel appreciated. In fact, studies show that targeted email marketing can boost consumer spending by 138%. What’s more,  you can also integrate Klaviyo, a marketing automation platform that automates eCommerce SMS and email marketing. 

Source: Klaviyo

With the data you just gathered, you can take your marketing efforts further through retargeting! Retargeting is all about giving customers a little nudge to remind them of what they’ve been missing out on. For example, you can consider a customer who purchases cooking equipment and regularly reads cooking articles on your site. You could leverage this insight to offer them personalized discounts on a broader range of cooking supplies. Ako Marketing: Loyalty & Retargeting features make this process more efficient and effective. You can segment your Shopify customers based on their shopping behaviour and create targeted ad campaigns. This allows you to deliver personalized ads that are more likely to resonate with individual customers, increasing the chances of conversion. 

Enhancing the loyalty program with gamification can also add an exciting dimension. Integrating game-like elements such as badges, challenges, and point-collecting rewards makes the program fun and engaging. Customers can earn badges for different achievements, like frequent purchases. Challenges can be seasonal or based on individual shopping behaviors. Customers can unlock exclusive deals or gain access to VIP services as they accumulate points.

4. Streamlining Sales With Instagram DM Automation

Instagram is a prime spot for brands looking to grow their reach and improve their sales. With over a billion people using the app, it’s a great place for businesses to connect with their audience. One of the best tools they can use is Direct Message (DM) automation, which helps make chatting with customers straightforward and effective. You can also use Ako Marketing: Retargeting & Loyalty Instagram DM Automation feature to streamline sales directly through Instagram. This tool lets you sell directly and convert every Instagram comment into orders. Simply select a keyword for customers to comment on, and automatically send a personalized DM message 24/7 to your customers who leave the comment. By allowing customers to comment with a keyword to initiate a purchase simply, you reduce the friction in the buying process, potentially leading to increased sales. Not only can you save your ad costs, but you also get to drive higher reach and engagement with your customers!

5. VIP Tiers Membership

To keep your VIP customers coming back, you've got to make it worth their while. VIP Memberships reward your customers with perks. Tiered programs offering higher rewards and unique names can motivate customers to spend more to unlock greater benefits. Typically, this program will use point systems, where customers can earn discounts or coupons. But it’s not just about tangible goods; VIP programs are stepping it up by offering exclusive experiences. Perhaps one way of achieving this doesn’t always have to be through monetary value. It could be sharing your product, following your social media accounts, or writing a review to earn points. It’s a win-win solution - you get brand exposure, while customers get free money. By structuring different tiers offering attractive benefits as customers climb the ranks, you can motivate them to increase their average order value. This model taps into a powerful psychological principle: the more customers invest in a brand, the more they want to maximize their return on investment.

CorePower Yoga’s Member Program encourages customers to spend more with their powerful message: “The more you spend, the more you save.” It’s not just a catchy phrase but a powerful incentive. For customers, this reduces the cost per class and saves much money through a flat annual rate. Members enjoy unlimited access to classes and complimentary yoga workshops. The added value of maintaining a consistent exercise regimen and the tangible benefits of such a program encourage them to spend more!

Ako Marketing: Retargeting & Loyalty lets you easily establish a VIP tier membership, encouraging customers to return frequently and make repeat purchases. Give them compelling reasons to spend, share, and celebrate your brand. Loyalty programs can be both fun and rewarding! Customize your program to reflect your brand’s unique style and values, whether through the user interface or the specific rewards and membership tiers you provide.

Conclusion

It's clear that loyalty programs are effective at boosting customer spending, but their success hinges on your target audience. Building a strong emotional connection is key through personalized tactics like birthday emails, exclusive deals, and special coupons for loyal customers. VIP Tier Memberships further enhance this strategy by offering substantial incentives for customers to make repeat purchases.

If you're looking to boost customer retention and enhance brand loyalty, consider how a well-crafted loyalty program can play a pivotal role in achieving these objectives. To take your efforts further, try Ako Marketing: Loyalty & Retargeting today! Designed explicitly for Shopify store owners, our app helps merchants implement a loyalty program that truly resonates with customers and drives business goals. Give Ako Marketing: Loyalty & Retargeting a try today with a 14-day free trial!

About Akohub:

Akohub provides an all-in-one Shopify loyalty retargeting app - Ako Marketing, to foster the growth of Shopify stores. The Ako Loyalty Program enhances customer retention with VIP Tiers and various points-earning opportunities like Referrals, Signups, Reviews, Birthdays, and 1-click Social Login. Key features include seamless points redemption at checkout, Instagram Automation for shoppable messages, a CRM Dashboard for deeper insights, and the Ako Marketing Funnel to boost retargeting conversions while reducing ad costs. Feel free to try it from the Shopify App Store!