Win the hearts of your customers with an SMS loyalty program

SMS 101 3 min read Mar 2022 |   Author: Sinch MessageMedia

The last two years have been a real rollercoaster, with the pandemic turning lives upside down and transforming how we live, work, and shop. As shopping habits change, it can feel harder than ever for businesses to hold on to customers.

According to McKinsey, 78% of consumers have switched stores, brands or changed the way they purchase due to the pandemic.

Building a strong base of loyal customers can really pay off. Loyal customers may want to spend more with you. Plus, they’re more likely to recommend you to their friends – helping you win the hearts of new customers and grow your business. 

With new customer acquisition costing 5x more than retention of your existing customers, it makes financial sense to make the most of your current advocates and communities. 

Still not convinced? With the right customer loyalty program behind you, it’s possible to:

• Increase profit by 25% if you increase customer retention by just 5%.
• Encourage customers to shop more, with 60% of loyal customers buying more frequently from companies they trust.

Ensure more significant spend over time – in their third year with a business, customers spend 67% more than their first year.

“When customers are loyal to a pharmacy, it benefits both parties. We know that our pharmacy rewards program members spend up to 40% more than non-members, shop up to twice as often, and are worth an additional $144/year to the pharmacy business on average.”

– Alyssa Newton, Marketing and Communications Manager, knowITall  (Loyalty Programs)

Cut through the clutter with text-based loyalty programs

The problem with traditional loyalty programs is low engagement. Customers might dip in once or twice, before putting it out of sight and mind until you email them a reminder. In fact, the average consumer belongs to at least 15 loyalty programs but is active in less than 7 of them.

While rewards and incentives are the cornerstone of customer loyalty programs, customers are looking for more than just points.  These days, they expect you to use data and insights to personalise your offers and provide a more tailored experience. 

This is where text messaging comes in. Delivering your loyalty program via SMS helps you reach your customers directly, stand out from your competitors, and solve the problem of low engagement. Let’s take a look at some examples.

Let’s take a look at some examples

Instead of just blasting out blanket messages to all members of a customer loyalty program, it’s easy to segment with SMS. Delivering more personalised offers and incentives as part of your text-based loyalty program will lead to better engagement and more sales. 

For example, you could identify your top 50 customers in the lead-up to Christmas, and send them a personalised note with a credit on their loyalty card. Or, you could identify the cohort of customers that recently purchased big-ticket items, and follow up with a special deal.

Another benefit of SMS messaging is its easy ability to engage in two-way conversations with your customers. So, as part of your loyalty program, you could run short surveys, collect feedback or gather customer reviews.

One of our customers, knowITall, knows all about the difference between SMS and email with loyalty programs. The company, which manages loyalty programs for many Australian brands, ran a campaign prompting customers to update their details.  10% of recipients clicked through when sent an SMS, while only 2% responded from an EDM. 

As these examples show, text-based loyalty programs help you achieve greater impact and stronger results.

Final thoughts and further reading

If you’re interested in getting started or using SMS to drive your customer loyalty programs, chat to one of our SMS experts, who can walk you through your options or get you started on a free trial.

You may also want to check out:

• Why building brand loyalty is easy with these 7 text tactics
• Our webinar on how to build consumer trust online 
• How to gain customer trust and confidence with text messaging