Customer loyalty software is any Internet service or program that engages customers in the post-purchase phase of the customer's journey with your business, with the goal of developing and increasing customer loyalty.
In today’s world, customer service extends beyond the transaction. In order to provide exceptional customer service, you should engage your customer after they place their order, after they leave your shop, and after they have been using your product or service. It’s not enough for them to have a positive purchase experience; it’s what happens after the sale that will create lasting customer loyalty; customer loyalty software is built for that engagement.
The main goal of customer loyalty software is to track your customers’ decision journey so you can engage with them at the right time. Similar to advertising – your message should go to the right person at the right time with the right message. It’s the same in customer loyalty software. You wouldn’t immediately send a discount offer on a car to someone who just bought a car from you last week, right? Just as you wouldn’t wait a whole year after someone bought a pizza from you to send them a coupon. Customer loyalty software helps you identify where your customer is in their customer journey so that you can send them the right message at the right time.
Customer loyalty programs have had a long history and are nothing new. During the middle of the twentieth-century, Betty Crocker introduced loyalty Box-Tops, followed a few decades later by every airline announcing frequent flier miles, such as American Airline’s Aadvantage. Now, it seems as though every coffee shop has a (digital or analog) punch card system - buy ten lattes, get one free! Other companies have paid monthly subscriptions or tier-based options in attempt to increase customer loyalty.
Technology has changed the loyalty game and now businesses have many more options to keep customers engaged and promote customer loyalty. Your competitors are going beyond the traditional punch card system and so should you.
Customer loyalty software can work very differently based on your customers’ decision journey. For decades, this journey was represented by the traditional (and now outdated) marketing funnel.
In this marketing funnel model, customers are defined by how likely they are to purchase. At the widest, top part of the funnel is, well, everyone. The potential customers are filtered through the funnel and the customers who actually purchase your product are funneled out the bottom, likely never to be seen again as gravity and time pulls them further from the purchase.
The fatal flaw in this model is that it leaves no room for customer loyalty. Once customers purchase, they exit the funnel, until they are later made aware again of the product and go through the whole process again. What if there was a way to take those customers who purchase from you and keep them engaged, leading to another purchase? Enter customer loyalty software.
Today, the purchasing journey that customers take is much more complex than when the marketing funnel was created. Customers now have the infinite universe of the Internet to research your product, read online reviews, and learn more about you and your competitors than you do! For example, car customers today visit an average of only 1.6 dealerships before they make their purchase, compared to six dealerships just ten years ago, which means they are heavily researching online before they go in. Where car shoppers used to rely on the car salesman to help them discover what features they needed and pick a car, buyers practically already know which car they’re buying before they walk onto the lot.
What does this mean for you? You need to engage your customers before, during, and most importantly – after – the sale in order to create customer loyalty. With customer loyalty software, you can engage customers in whatever way makes sense during their current phase of the customer decision journey.
Say someone is casually interested in your content marketing (content that you generate to be purely educational or entertaining), but they are not very close to purchasing from you. Instead of sending them a coupon or discount on your product, you can send them more content that is specially targeted to their interests. As they get to know your business and regard you as an authority in your industry, your relationship with them grows and you can eventually usher them toward a purchase, but always at their own pace. Customer loyalty software allows you to meet the customer at whatever stage they are currently at in their cycle. It allows you to provide targeted, unobtrusive contact with your customers. Primarily, it allows you to build a relationship, and that relationship = customer loyalty.
Ideally you would know each customer personally and have a one-on-one relationship with them. However, in today’s world this is not always practical. Customer loyalty software automates this engagement, allowing you to build those relationships with your customers, even if you aren’t seeing them face-to-face.
Customer loyalty software takes many forms and can be tailored very specifically for different industries, size of companies, and customer bases. For example, a car dealership will utilize very different customer loyalty software than a pizza shop. Some companies’ customers purchase once after many years, while another can be once a week (or more!).
Here are some common types of Customer Loyalty Software:
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