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Creating a Loyalty Program? Start with Direct Mail

Article - 5 Min. Read

Learn about loyalty programs, the role direct mail plays, and two great examples of brands using mail to build customer loyalty.

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Customers today have seemingly endless options for how and where to shop—and their appetite to explore new brands has only grown. Consider the massive impact the COVID-19 pandemic has had on customer loyalty: Thirty-five percent of U.S. consumers have tried a new brand since the crisis began.[1] According to Gartner®, value enhancement greatly increases the probability a customer will stay with a business.[2] Wondering how to build loyalty? Read on to learn how to leverage direct mail for your loyalty programs.

What Loyalty Programs Can Offer

Loyalty programs have been used for over a century to build and maintain strong customer relationships. This indicates that while customers are increasingly playing the field, brands are not backing off their loyalty initiatives.

These programs not only convey to customers that they are valued, but also allow brands to gather important information about customers, such as purchasing behavior. Direct mail can play an important role in that equation.

Why Direct Mail Delivers for Loyalty Marketing

Direct mail can be the linchpin in loyalty marketing. Consider its visibility. Seventy-seven percent of people sort through their mail as soon it arrives.[3] It can also help target customers effectively. By segmenting your direct mail campaigns by location, household income and buying habits, you can ensure the right message is sent to the right customer at the right time.

Companies use the channel to build trust. While email is seen as an avenue for phishing and scams, mail is a more trusted marketing channel. One study found 54% of consumers worried less about direct mail privacy than digital communications privacy.[4]

Direct mail is also an omnichannel powerhouse. It complements a multitude of marketing strategies. Use it to double down on digital and email marketing efforts. Retargeted mail can be used to trigger customized mail pieces after a user reads an email, browses your site, or even abandons a cart.

Best Practices for Setting Up Loyalty Campaigns

Take note of what’s involved in establishing a successful loyalty program.

Utilize customer data.

You can only make your loyalty program irresistible if you really know your customer—and for that, you should dive deep into customer data. Research the customer segments you want to target. Categorize customers’ personal traits, preferences and behaviors.

What’s their average spend? Which products are most popular? When and how often are they making purchases? How long have they been a customer? By collecting and utilizing customer data, you can anticipate customers’ needs and fine-tune your marketing efforts to encourage their loyalty.

Define clear goals.

Clearly define the objective of your loyalty campaign. Doing so will require research into your own business.[5] Is your goal a higher redemption rate or customer retention rate? Do you want to focus on repeat purchases or customer lifetime value? Choose the most appropriate benchmark.

Use simple rules.[6]

The ideal loyalty program is one that’s easy for customers to understand. That means minimal restrictions and rewards, and deals that are consistently available.

Reward customers.

Offer rewards for a variety of customer actions—not just purchases.[7] If customers subscribe to your blog or download your app, they’re engaging with your brand more deeply than if they were just browsing your website, so they should be rewarded.

As for the rewards themselves, make sure they offer value to customers—and align with their values, too.[8] The rewards must be things that customers want and care about. Financial rewards, like discounts on future purchases, can be effective.

Experiential rewards, like free tickets to events and entertainment, can help your business stand out.[9] Another reward option is to make a donation in a customer’s name to a charity they choose, creating a connection between their values and your brand’s.

Two Examples of Loyalty Mail Campaigns

Discover how two different brands and organizations incorporated direct mail into their marketing strategies to build customer loyalty.

  1. Car insurance company goes the tiered route.

    To help retain customers, one car insurance company created a loyalty system with different tiers. When customers were on the cusp of reaching a new tier, the company sent a simple postcard. An eye-catching graphic was printed on the front along with a personalized message. On the back, the company teased the many benefits coming the customers’ way very soon and included a link to learn about all of the rewards.[10]

  2. Beauty brand piles on the gifts.

    To help make their most loyal customers even more loyal, an iconic beauty brand gave back. A bifold mailpiece was sent to top-of-the-list VIP customers. On the cover and inside, the brand highlighted their latest promotion: a free full-size product, no strings attached. Better yet, the customer could redeem the gift by simply bringing the mailpiece to a beauty counter.[11]

Key Takeaway

There are elements from each of the above examples that any business can learn from and implement into their own direct mail campaigns. By harnessing the power of direct mail combined with personalization, businesses can drive customer loyalty and retention.

Footnotes
  1. [1]“Coping with the Big Switch: How paid loyalty programs can help bring consumers back to your brand,” McKinsey & Co., 2020.
  2. [2]“Gartner for Customer Service & Support: The Customer Value Advantage,” Gartner, 2020. Gartner is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission.
  3. [3]“The Mail Moment,” United States Postal Service.
  4. [4]“USPS Mail Moments: 2019 Review,” 2019.
  5. [5]Sam Suthar, “8 Top Tips for Creating Killer Customer Loyalty Programs in 2021,” Acquire, July 26, 2021.
  6. [6]Ibid.
  7. [7]Sophia Bernazzani, “The Beginner’s Guide to Building a Customer Loyalty Program,” HubSpot, July 2021.
  8. [8]Ibid.
  9. [9]Sam Suthar, “8 Top Tips for Creating Killer Customer Loyalty Programs in 2021,” Acquire, July 26, 2021.
  10. [10]“Mail piece scan: You’re getting closer to your next Loyalty Reward level!” WhosMailingWhat!, May 2021.
  11. [11]“Mail piece scan: A big thank you for your loyalty,” WhosMailingWhat!, March 2020.
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