It’s often cheaper to retain a customer than find a new one, meaning that there is a clear link between customer loyalty and profitability. This is particularly true in retail. In this blog I'll share some simple ideas for how to create email marketing loyalty campaigns for the retail sector. It'll have you retaining and growing existing customers in no time...A report from Bain & Company found that just a 5% increase in customer retention could generate up to 95% increase in profitability. Just a 5% increase - that's a tiny needle to move, creating enormous impact in little time.
Also, your brand will profit by retaining customers. In the book, Leading on the Edge of Chaos, it is said that profitability rates increase over the life of a retained customer. A 2% percent increase in customer retention has the same effect on profits as cutting costs by 10%.
Start building a loyalty program into your email marketing with these 5 great tips...
1. Reward redemption emails
Redemption campaigns are the perfect way to work with points promotions for customers. Everyone enjoys seeing lots of points in their account and when they increase, brands can give customers exciting rewards.
However, a points-based loyalty program does depend on customers going ahead and redeeming their points. As a brand, it’s important to keep loyalty programs simple and effortless, in order for them to be effective. Base redemption campaigns around giving customers a particular way to spend rewards or increasing the value in their points over time.
Indigo has done a great job of increasing the value of loyalty points over time. They do this by sending “Plum Rewards” members an email a few times a year indicating that their points balance has been ‘topped up’.
As a limited-time promotion, customers are given the opportunity to redeem for a bigger reward if they make another purchase in a short time period.
2. Reward expiration reminder email
The reward expiration email works well with loyalty programs, sales vouchers or gift coupons, and automated emails can be set up to send messages to customers when the expiration date is approaching.
Create a sense of urgency and FOMO (fear of missing out) for customers to use their points, vouchers or discount codes, by letting them know it’s the last day of deals or that their coupon expiry date is looming. Your customers will appreciate you letting them know so they don’t miss the opportunity to use their hard-earned points or vouchers.
Be sure to send a few emails to give customers enough time to redeem their rewards. You can send an email a few months before, one month before, a week before and then on the final day, before the rewards expire.
Consider adding extra incentives in the emails, as the customer lifetime value will always outweigh granting them a little extra rewards.
This email from Bulu Box gives customers plenty of notice that their reward points are due to expire.
3. Thank you emails
Maintain positive customer relationships by letting them know they’re appreciated. An email campaign is the perfect way to thank them for being part of your brand journey and to get their attention.
Smart brands thank customers at least once a year with appreciation emails. You can thank customers in many ways, but put your customer centre stage and make them feel special. These emails will increase repeat purchases, as well subscription rates, which will boost engagement levels and brand loyalty.
Consider adding a special note from the CEO or giving them a discount on future purchases. Video and animation is a particularly powerful way to do this too!
Take inspiration from this from BirchBox by creating your own customer appreciation day. This email from Birchbox Man, a male grooming website, begins with the subject line “Happy You Day!”.
Creating an event specifically designed to thank customers is guaranteed to make them feel extra special.
4. Top customer emails and perks
The top percentile of your customer database is likely to be generating a large portion of your business revenue. If people are spending a large amount of money with you, consider giving them special status.
A report from eMarketer revealed that “81% of online shoppers who receive emails based on previous shopping habits were at least somewhat likely to make a purchase as a result of targeted email.”
You can offer your top customers gold, platinum or diamond status or you can offer them exclusive perks, such as free shipping or inviting them to special events. Really make them feel like they have achieved this “VIP” status!
This email from Sephora shows how they’re rewarding their top customers by offering exclusive promotions to those who have met a purchasing threshold. In the case for Sephora, gaining VIB status requires a customer to have £350 in purchases a year and VIB Rouge members are those who have spent £1,000 or more.
Consider offering customer promotions based on order frequency, sales volume or any other metric you think would work best. You can then shape your promotion to offer store credit, exclusive promotions or even special offers.
5. Surprise and delight emails
Great loyalty is generated by putting your customers first. Any way you can do something extra nice for them or create “moments of delight”, will go a long way. It’s even more delightful for customers when you can surprise them. Your retail brand can do this with a personal follow-up or targeted event-driven email.
One way to delight customers is by sending them an automated and highly personalised Happy Birthday email campaign. This can be a short series of relevant, useful messages over a week. You could even send your first message before their birthday to be the first to wish them well for the day...
This birthday email from Topshop gives customers a reason to celebrate more with a 20% off discount code. They have done a nice job remembering that birthdays are a fun and festive time by using colourful text and images. Add balloons, cakes, confetti or images of people celebrating to liven up birthday email messages.
Summary: foster loyalty through email marketing
The more you can keep customers returning and loyal, it takes that little bit of pressure off of your acquisition campaigns. Email marketing is just another tool for creating powerful relationships with customers, where you can showcase your products and services and add value.
Just as it’s important to focus on acquiring new customers, you need to pay attention to current customers and encourage conversions throughout the entire customer lifecycle.
Enchant is a leading UK digital marketing agency, based in London. Specialising in email marketing, CRM, inbound marketing andpaid social advertising, our experts help retail brands to create big impact with effective customer lifecycle marketing strategies. Get in touch with our email marketing consultants and see how we can supercharge your strategy!