Understanding SMS loyalty programs

SMS loyalty programs have been identified as a powerful tool to engage customers, drive repeat purchases, and foster brand loyalty. We have taken a deep dive into the potential of customer loyalty programs and want to show you how you can maximise your ROI by implementing your own SMS loyalty program.

What are SMS loyalty programs and how do they work?

SMS loyalty programs are customer retention schemes that are promoted and managed by text message marketing. A customer who engages with any brand loyalty program can typically expect to benefit from exclusive benefits, promotions, discounts, rewards or, loyalty points.

Customers enroll in SMS loyalty programs by opting in to receive brand benefits by providing their phone numbers and some personal details. Onboarding can be carried out in-store, on the website, or using SMS keywords. Once enrolled, the business has permission to send discounts and offers directly to customers’ mobile phones.

Often Loyalty program messages will include links, codes, SMS keywords, or instructions on how to access the benefits. Most loyalty programs include a point system whereby customers can work towards a goal such as free gifts of money off future purchases.

In return for the rewards program members can enjoy, the business can make use of additional information about their loyal customers and personalise interactions more to help boost sales from their customers. Brands can build stronger relationships and get richer feedback on performance and products through next-level communication with members.

Loyalty program members also have the safety of knowing that they can opt out of a loyalty program at any time the same as they can opt out of receiving marketing communications.

SMS loyalty programs can be an effective way for businesses to stay connected with their customers, foster loyalty, and drive repeat business. By leveraging the popularity and immediacy of text messaging, these programs offer a direct and personal communication channel that can enhance the customer experience and increase customer satisfaction.

Why start a loyalty program?

Starting a loyalty program is largely beneficial for increasing customer retention and improving your customer journey. Loyal customers spend more than disloyal ones. According to Queue.it a staggering 84% of people are likely to stick with a brand that offers a loyalty program. This statistic is so important as 65% of all business usually comes from repeat customers.

SMS loyalty programs also help businesses to gather important customer data upon sign-up and during the customer lifecycle. Aside from the sign-up process you can begin to build relationships with your customers and communicate with them regularly via their favourite method of communication. If you need to know more information about your customers, send SMS messages to ask. For example, if you wanted to know how often they go abroad for holidays, ask the question and use keywords to identify and sort the answers for your database. SMS does have a higher read rate than any other marketing channel at 98%, but when fishing for information, it might help if you use incentives to get a greater number of responses.

How do you implement a loyalty program?

1. Build a current customer profiles

Try to work out the following information:

• How much your customers buy in a year
• what type of products they usually buy and how often
• How long have they been a customer?
• Are there other products they might consider?
• Where else do they make purchases?
• How happy are they with our brand?
• Could you improve their customer experience?

This information will help to shape your loyalty program and allow you to deliver it with better results rather than throwing something out there and hoping it sticks.

2. Prepare your customer loyalty program

When looking to reward customers you need more than just a stab in the dark. Prepare the scheme for more precise targeting to save money and energy in the long run.

Take a deep dive into your customer needs and habits. Some of your most loyal customers may not need a loyalty program to encourage them from making repeat purchases. However, the same cannot be said for your other customers or prospective customers. With so many options available to us at the click of a button, many of us look for deals first and only buy from brands we can make a saving with. Be sensitive to this need to make the most of your customer engagement.

Have a look at your existing customers and try to gauge how happy they are already as there could be some clues as to future needs. Invite feedback to get the ball rolling and add it to your loyalty program plan. It is far cheaper to nurture your existing customers than to prospect for new ones. 

3. Agree on a budget

Installing a good loyalty program is not a cheap exercise so it’s important to set a budget and decide how much you need to spend to attract new customers and how much of your budget should be set aside to maintain your existing customers.

The good news is that, unlike other marketing channels, SMS marketing is relatively cheap to use and can reach a larger audience for a low cost.

4. Choose your ideal customers

Investigate which customers bring the highest value to your brand and target loyalty programs to attract or maintain them. Look at historical analytics and make forecasts to discover to following:

• The biggest spenders – These are the customers already spending, but how can you make them want to stick with your brand? How can you be fair to them whilst trying to attract new customers?
• Spending habits – When are your customers making purchases? Are they payday buyers? Do they buy all month long? Do they only shop the sales? Do they need a discount to be tempted to buy? Do they need prompting with new products or influencers?
• Disposable income bracket – How much can your customers afford to spend? Are they able to purchase more? Which customers would spend more if the loyalty program could facilitate them? Which customer can only buy your brand in the sale or with offers?
• Customer lifetime value – It’s important to consider how much value certain customers can bring to the business and the opportunities for loyalty for each different customer group. Is the outlay worth the reward over the life cycle of the customer/brand relationship? In other words, be sure to have done your homework about who you are targeting.

5. Decide what to include in your SMS loyalty program strategy

Now you have done a full scale analysis of your customers, it’s time to choose your Loyalty program features. How will you customers benefit from joining up?:

1. Sign up discounts on products
2. Early access to sales
3. A points/rewards program
4. Exclusive news letters
5. Exclusive access to influencer material
6. Exclusive perks
7. Free shipping and returns
8. Free gifts
9. Personal invitations to brand events
10. Competitions
11. Birthday treat
12. Feedback opportunities

How SMS marketing and loyalty programs make a great partnership

Whatever you include in your customer loyalty programs can be communicated using SMS and as we have established, it is the quickest, easiest, and most reliable way to reach consumers in today’s world.

Some SMS features will change the way you target customers, helping you to save money and also build strong relationships.

Personalisation

By using personalisation you can reach out to your customers more effectively. Your SMS database will allow you to add personal details such as the recipient’s name, birthday, favourite products based on their purchase history, etc. Using insights and analytical data about your customers can help you produce more personalised content. When targeting your communication more precisely, subscribers will be more likely to engage with you, and by saving details about their product preferences, you can keep communications relevant.

Segmentation

Your SMS database can also fit your subscribers into sub-categories and ensure that they are only sent relevant content. This will help to retain more customers and maintain good relationships. For example, if you only want to send loyalty deals to homeowners or people with pets, providing you have that information within your database, you can create a data field for that purpose and select your audience. This is also easy to do with Bulk SMS.

Timing can be important too. SMS messages can be scheduled to be sent at the perfect time for particular customers anywhere in the world.

Loyalty programs for B2B customers

Loyalty programs can also be used for B2B. Like B2C loyalty programs, B2B loyalty programs are designed to cultivate long-term relationships, encourage repeat business, and reward customers for their continued partnership. The steps to implement a loyalty program for regular customers are pretty much the same for B2B but here are some additional considerations and ideas to help you:

1. Tiered loyalty programs: Create multiple tiers or levels of rewards based on the customer’s loyalty and spending. Higher-tier customers can enjoy exclusive benefits, such as personalised support, priority access to new products, or discounted pricing.
2. Volume Discounts: Offer discounts or preferential pricing to B2B customers based on their volume of purchases. As customers increase their order quantities, they unlock greater discounts or favourable pricing structures.
3. Referral Incentives: Encourage B2B customers to refer to other businesses by providing incentives for successful referrals. This could include discounts, cash rewards, or additional benefits for both the referrer and the new customer.
4. Co-Marketing Opportunities: Collaborate with your B2B customers on joint marketing initiatives. By featuring them in your marketing campaigns or giving them exposure to your customer base, you can strengthen the relationship and provide them with additional value.
5. Exclusive training or education: Provide B2B customers with exclusive access to valuable content, educational resources, webinars, or workshops. This helps them stay informed, learn new skills, and derive extra value from their partnership with your company.
6. Customised Solutions: Offer personalised solutions or customisation options that meet the specific needs of your B2B customers. Tailoring your products or services to their requirements enhances the value you provide and increases their loyalty.
7. Regular Communication: Maintain regular communication with your B2B customers to keep them informed about new offerings, updates, or industry insights. Newsletters, email updates, or personalised account managers can help foster a strong relationship.

If you are ready to take the next step in elevating your brand, cut through the clutter with an SMS-based loyalty program. Get in touch with TextAnywhere today and speak to one of our advisors. We’re ready when you are!