Loyal customers are the lifeblood of any successful business. Find out how you can create a successful loyalty program and why you should use SMS to run it.
When it comes to purchasing power, loyal customers are king. Not only do they repeatedly buy your products and services, they reduce your cost of acquiring new customers and have a higher lifetime value for your business.
For these reasons, rewarding them is crucial, and that’s where customer loyalty programs come in. According to John Sellers, Rewards Executive at Bank of America, appreciating their customers has produced these incredible outcomes:
One effective way to reward customers is by creating an SMS loyalty program. In this article, you’ll learn about how to start your SMS loyalty program, including the benefits of creating one. Let’s begin with the basics.
Customer Loyalty Program definition:
A customer loyalty or rewards program is a strategy that keeps customers while increasing sales. If executed well, this program can give your customers a reason to continue buying from you.
According to a report by Bond Brand Loyalty, the average American consumer takes part in 16.7 customer loyalty programs. These programs come in all shapes and sizes.
But these loyalty programs also share one thing in common: They give consumers rewards such as free merchandise, discounts, exclusive rewards or VIP access. Plus, they could be based on tiers, points, cashback, subscription, refer-a-friend, and spent amount.
SMS Loyalty Program definition:
An SMS loyalty program is a loyalty program that’s executed with text messages. These programs are an inexpensive way to get repeat buyers.
Here’s how it works:
That’s it. There’s nothing complicated about it, and it works.
Because you’re not wasting time, money, or effort messaging people who aren’t interested in your rewards. If someone signs up, it’s because they’re eager to get SMS texts that incentivize them to come back.
There’s no need reinventing the wheel when creating your SMS loyalty program. Learn from brands that have done it and you’ll do just fine. Here are three examples of innovative SMS loyalty programs from Club Marriott, Tarte, and Olive and June:
The Club Marriott loyalty program lets customers redeem points based on their membership tier. Customers with a premium or classic membership card get up to 20% off dining, accommodation, and spa treatments.
Program type: Tiers
Why this loyalty program works: It gives Marriott customers quality reasons to take part in the program. For instance, the ability to redeem points at over 8000 hotels in the world is compelling. Marriott benefits, too. They can analyze and use their customer preferences to create better experiences for guests.
Tarte is an organic cosmetics brand that brilliantly uses points and tiers in its loyalty program. Customers can start earning points by sharing their birthday, signing up for Tarte perks and SMS, and taking a quiz.
To create a feeling of exclusivity and also the fear of missing out, Tarte has three tiers that customers can join to earn more points.
Program type: Points and tiers
Why this loyalty program works: Tarte generates sales as customers spend more to collect points. Customers also win perks as they reach a particular tier, but spend more to unlock the benefits of the next tier.
The Olive and June rewards program allows customers to earn points on every purchase.
The structure of the program is like Tarte, which we discussed earlier. Members can earn points immediately by:
Program type: Points
Why this loyalty program works: It gives customers a reason to shop at Olive and June. Customers get exclusive access to products, including discount purchases.
Now that you know the basics of what an SMS loyalty program is, let’s discuss eight steps for setting up one that’s effective.
Without knowing what drives your customers, you default to assumptions. Assumptions are bad for business. To nip assumptions in the bud, ask your customers what they want. If you can, directly communicate with them.
You can also send surveys to know why your repeat and one-off customers buy from you. Find out what they value most. Do they like general or exclusive discounts? Early access to new products? Free shipping? Birthday gifts? Free product returns? Include their preferences in your program.
Competitors can also help you know your customers’ preferences. Check out those that run loyalty programs and use theirs to inspire yours.
Also, dig into your customer data to know if certain elements trigger a purchase. That could be free shipping, a discount, an extra perk, and more. Understanding these helps you set up your SMS loyalty program for success.
Here are five questions you can ask your customers to understand what motivated them to purchase from your business:
You can use the information you glean from these answers to inspire your text messages.
The name of your customer loyalty program should be impactful, yet quick and easy to remember. It should also stand out among competing rewards programs. You could keep it simple by including your brand name in the program. For example, the name of Tarte’s program is ‘tarte perks.’
To get some inspiration, you can use AI tools like ChatGPT. Here’s a prompt I gave to ChatGPT:
I run a retail store called “Puppies corner.” To reward my loyal customers, I’d like to create an SMS loyalty program. Suggest 20 of the most suitable names for this program. Each name should be under three words.
The output doesn’t look bad at all.
To launch your loyalty program, you need software with great features. At SimpleTexting, we’ve created a detailed comparison of how our product stacks against other SMS marketing software.
Be sure to select software that has features like:
With a text message loyalty program, there are two main ways your customers can earn rewards:
There are two ways to use keywords.
SimpleTexting offers you unlimited keywords, which means the sky’s the limit.
While either method of using keywords is beneficial, we recommend going with the first method if you lack time to create new keywords.
The rewards can range from a simple discount code to an entry into a large sweepstakes. But the key to a successful SMS loyalty program is to offer variation and frequency. You want to reward your customers often, so that they see the value of being a member.
💡 Giving multiple, smaller offers can sometimes be more beneficial than a huge reward to end all rewards.
Again, find a system that works for both you and your customer.
If your loyal customers value free merchandise over discounts, consider that when developing your loyalty program. If you sell service-based goods like gym memberships or salon services, a discount or exclusive add-on may resonate with your audience. It’s important to find the right system to guarantee customer satisfaction.
Here are a few quick ideas for rewards you could offer through your SMS loyalty program:
Autoresponders save your time by helping you automate tasks in your loyalty program.
Instead of welcoming each person who signs up for your program, you can create an autoresponder to do that. You can also set up text messages that go out days, weeks, or months after someone has signed up for your program. Each of these messages should include a reason to come back to your business.
You have rewards ready to go, and you’ve written your texts. Now there’s just one thing missing — people to message! The good news is that you can get customers to subscribe by:
Whichever method you choose, it’s vital that you comply with the law by collecting express written consent from customers.
Periodically sending promotions is great, but text message loyalty programs let you do a lot more.
Here’s how you can create a fun customer experience using SMS:
We’ve gone over how an SMS loyalty program can help you boost customer retention and increase sales. But what’s the benefit of text message marketing compared to, say, paper coupons or kiosks?
The average American sends and receives over 50 texts per day. How many are from you? Connecting with your customers through text messages can impact your business beyond measure. Try SimpleTexting by signing up for a free trial and start rewarding your top customers.
This piece was originally published as a blog post on May 22, 2019. It was significantly refreshed and repurposed in July 10, 2023. Alfredo Salkeld contributed to this piece.