6 Pillars of a Successful Loyalty Marketing Strategy

What is a loyalty marketing strategy? And if you’re already marketing to your customers, why do you need one? It often comes down to dollars and cents. 

While traditional marketing strategies tend to focus on customer acquisition, a loyalty marketing strategy is all about fostering relationships with existing customers and keeping them as long as possible. 

It’s much cheaper—some research suggests as much as 5x cheaper—to retain customers than to land new ones. Plus, existing satisfied customers are more likely to spend more money, try new products and refer your business to others. 

Central to a successful loyalty marketing strategy is a robust, intuitive loyalty program that makes it easy to nurture customer relationships and send personalized marketing messages to them. With that in mind, follow the advice in this article to build and launch a winning loyalty marketing strategy.  

#1. Set a Budget and Decide on Campaign Channels Budget Allocation 

US company marketing budgets might constrict in 2024, according to Gartner’s 2024 CMO Spend Survey, which indicates that the average marketing budget has dropped from 9.1% of company revenue in 2023 to 7.7% this year. Furthermore, data from HubSpot’s 2024 State of Marketing Report shows that nearly 60% of marketers say their budgets are being more heavily scrutinized than in the past.  

A smaller budget with more eyes on it means it’s even more important to have a detailed, well-thought-out plan that considers how you’ll allocate funds across your marketing channels.  

To start, establish your overall marketing budget. Next, consider the channels you use to market to consumers, which typically include:  

• Loyalty programs  
• Digital or print ads  
• Direct mail  
• In-store signage 
• Website  
• Social media 
• Radio or TV ads  
• Email or text messages 
• Search engine optimization (SEO) 
• Content marketing  
• Influencer marketing 

Then spend some time evaluating which are currently the most effective in terms of engagement, conversions, and ROI. Additionally, decide which could use more investment. If your competitors have launched loyalty apps, and you don’t offer one, more than likely you’re at a disadvantage

It’s critical to understand your customers and what channels they’re most likely to use. This is where the ability to segment your customers based on demographics, purchase behavior, and engagement levels is so vital. You need to be able to see who’s most likely to visit your convenience store or restaurant and choose channels that meet them where they are. 

For example, if you don’t have a loyalty enrollment channel, but you cater to millennials, you could miss out on their business, as 32% of consumers who belong to a loyalty or reward program are part of that cohort. (PYMNTS) That’s why we suggest a mix of both online and offline channels that are fully and seamlessly integrated (learn how we do it). 

It’s also important to consider the reach and cost effectiveness of each channel. Email and social media marketing are less expensive than direct mail, for example. On the other hand, if you don’t have email data or a large social media following, those channels likely won’t yield serious business.  

Once you have selected the right mix of channels, you can set your budget for each. Given that retention is often cheaper than acquisition, it’s wise to allocate plenty of funds for your loyalty program and loyalty enrollment channels.  

#2. Develop a Loyalty Points System to Reward Customers  

Once you’ve funded your loyalty enrollment channels, the next step is to design your loyalty marketing strategy. Establishing a loyalty points system is at the center of any comprehensive strategy.  

Loyalty points systems, which reward customers with points for every purchase or interaction, increase visit frequency and repeat purchases. Again, armed with an understanding of your customers and what they want, you’ll need to decide: 

• What each point is worth (e.g., 1 point = $0.01) 
• How customers earn points (i.e., signing up, referring others, taking surveys, engaging on social media, providing a review) 
• Which rewards customers can earn (e.g., dollars-off discounts, coupons, free items, exclusive events, gift cards) 

Again, we suggest offering customers options for how they earn points and the rewards they receive. That requires a technology platform, like Paytronix, that provides a flexible loyalty points system that puts you in control with full customization, enabling you to set point values, create tiered rewards, and track customer progress. 

Your goal as you develop your loyalty points system is finding that sweet spot where consumers see real value in the rewards you offer without it costing you too much in return. It’s important to gather data and feedback to ensure your loyalty points system is meeting customers’ expectations. 

Track engagement and if your numbers look low, survey customers to find out why they aren’t using it. It could be that they don’t view your rewards as worth the money or time it will take to earn them. As you collect that feedback, you can make ongoing improvements.  

#3. Optimize Your In-App Loyalty Messages  

In-app messages are notifications that appear inside a loyalty app, and when they are personalized, they can be highly effective at getting customers to visit your business. In-app messages can be used to:  

• Provide a more seamless onboarding process by offering customers all the information they need to use the app  
• Promote special offers or events 
• Update loyalty members about new products or store information 
• Offer rewards for completing a survey, sharing feedback or completing some other action  

To optimize your in-app messages, you’ll first need to choose the right tool that will enable you automate the process of sending hyper-personalized messages at scale. With the right technology, you can segment customers and deliver targeted messages based on customer behavior and preferences.  

For example, with Paytronix AI, you can share dynamic content that changes based on real-time data, such as location, weather, or time of day. Imagine having the ability to send a coffee coupon to a customer who has purchased morning coffees at your convenience store, when they are just a few miles from your location. With that level of data and segmentation capabilities, you’re empowered to always send the right message to the right people at precisely the right time to increase both engagement and conversions.

#4. Create and Leverage a Convenience Store or Restaurant Referral Program

Even in our heavily digitized world where people have the option to endlessly research any topic, word-of-mouth marketing is still as powerful as ever. In fact, it may still be the best marketing channel, considering that 97% of people read reviews for local businesses before they make purchases from them. (Podium) 

People seem more than ready to share their feedback online, too. Oddly, while 83% of customers say they are willing to refer businesses to others, only about 29% actually do so if they’re not prompted in some way. (ReferralCandy) 

So, how can you bridge that gap? By giving your customers a reason to encourage others to visit your business with a strong convenience store or restaurant referral program. 

The most effective referral programs for restaurants and convenience stores offer double-sided incentives to both the referring customer and the new customer. The way it works is you incentivize customers to refer friends and family, encouraging them to spend more at your business and you attract new customers.

While convenience store and restaurant referral programs are a powerful tool for acquiring new customers and building brand loyalty, they can be challenging to manage. A solution like Paytronix simplifies the process of setting up and managing such a program. Our platform tracks referrals, distributes rewards, and provides detailed analytics to measure the success of your convenience store and restaurant referral program.

#5. Utilize Guest Feedback Surveys for Qualitative Data  

In marketing, data is king, and when you can collect qualitative data, and more specifically, voice of customer data, it provides a wealth of insights you can use to make smarter decisions when it comes to your loyalty marketing strategy. 

Send out regular guest feedback surveys to gain data on customers’ experiences, preferences, and opinions. Then use that information to identify areas for improvement and to develop targeted marketing campaigns. Just make sure you follow these best practices for sending a guest feedback survey: 

• Offer an incentive to complete it. Integrating surveys into your loyalty points system is wise, but you can also offer other rewards besides points, including coupons, gift cards, discounts or free items.  
• Ensure your loyalty program vendor offers survey integration. You’ll need a simple, seamless way to collect guest feedback survey and analyze and compare it against other data you collect.  
• Collect consumer data. Ask the right questions about age, gender, geographical location, preferences, and behaviors to help build comprehensive profiles of your consumers. If you do so, you’ll be able to segment and target your customers more precisely, especially when you can tap additional insights from the data captured by your loyalty app. 
• Act on what you learn. If you receive negative feedback about your loyalty marketing strategy and don’t make any changes, customers won’t see any value in completing future surveys. It could also turn them off from your brand. However, if you address issues, it will likely lead to greater customer satisfaction and loyalty. 

When you can harness and act on qualitative data, you can better meet customers’ expectations, improve customer satisfaction, and boost your profitability. 

#6. Conduct a Marketing Campaign Recap to Identify Future Opportunities

Last but not least, your loyalty marketing strategy will not succeed if you set it and forget it. You must continually monitor and review your performance so you can make changes as needed and deliver long-term value to customers. 

It’s ideal to add a regular marketing campaign recap to your process to ensure you have a sense of what’s working and what isn’t. Analyzing metrics, such as redemption rates, ROI, and customer engagement can provide you with insights to drive positive changes. After each loyalty program campaign, conduct a marketing campaign recap, ensuring you answer these questions:  

• How is our loyalty program performing? Do we have enough information to understand performance?  
• Should we conduct guest feedback surveys or send in-app messages to gather more insights?  
• Which key metrics are we tracking? (i.e., visit frequency, average order value customer lifetime value)  
• What should we keep doing? Why? 
• What must we change or stop? Why?  
• Should we watch any emerging trends? 

Unfortunately, the challenge for many businesses is that they don’t have real-time access to the right data to conduct a thorough marketing campaign recap. Paytronix provides a wide range of data points, including visit frequency, average order value, and customer lifetime value, enabling you to identify trends, optimize campaigns and uncover new opportunities.

If you’re ready to develop a convenience store or restaurant loyalty program that offers in-depth analytics and full automation, contact us today.