Why you should invest in a text-based loyalty program

Advanced SMS guides 3 min read

By Mel Kuttan
Mar 2021

Trust and loyalty are important factors when it comes to building and growing a solid customer base. In today’s post-COVID landscape, fidelity to your brand can also ensure resilience against future economic risks.

One easy way to do this is by creating an  SMS loyalty program for deeper and more frequent engagement. 

How can a loyalty program benefit my business

With growing economic uncertainty despite the new prevalence of vaccines, customers are still very concerned about the future. According to McKinsey, 78% of consumers have switched stores, brands or changed the way they purchase due to the pandemic. 

Building a customer loyalty program into your business can help you acquire new customers, keep customers from switching and ensure one-off shoppers will come back.

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)

Additionally, it’s essential to realise the value of existing customers. According to reports, almost 65% of your business can come from existing customers. And with new customer acquisition costing 5x more than existing customers, it makes financial sense to make the most of your current advocates and communities. 

Increasing customer loyalty can:

• Help you increase profit by 25% if you increase customer retention by just 5%.
• Encourage customers to shop more; 60% of loyal customers will purchase more frequently from companies they trust.
• Ensure more significant spend over time. In their third year, customers will spend 67% more than their first year with a business.
• 57% of consumers spend more on brands they are loyal to.

How the inclusion of SMS can improve your loyalty programs

One of the most common ways to improve loyalty is by building a loyalty program either yourself or through third-party providers such as our friends over at knowITall.

The problem with most loyalty programs, however, is low engagement. Consumers may use them once or twice but then put them out of sight and mind until reminded by the brand or business. According to Bond, the average consumer belongs to at least 15 loyalty programs but is active in less than 7 of them.

While rewarding customers is usually a package deal when it comes to loyalty programs, customers want more than just incentives or a points system. In fact, they expect businesses to leverage the data they give them to personalise future offerings better. 

Text messaging can help in both instances. Let’s look at an example.

Success story: SMS pharmacy loyalty scheme with knowITall

knowITall is the second-largest loyalty software company to service pharmacies across Australia. According to their Marketing and Communications Manager and former pharmacist Alyssa Newton, they assist pharmacies by teaching them the many different ways they can market and communicate with their customers. 

In the pharmacy industry, loyalty is important because there is a lot of competition. Building loyalty is a way to ensure customers return to your store and your offerings. Another vital facet is addressing low engagement. Beyond their time in the store, pharmacies struggle with customer engagement and ensuring return visits.

SMS marketing has proven to be a top way for our clients to reach their customers and we are delighted to continue using the MessageMedia platform to deliver results for our pharmacies.

Alyssa Newton, Marketing and Communications Manager, knowITall (loyalty programs)

Ms Newton has helped clients implement text messaging as part of their customer loyalty program to uplift engagement where email communications weren’t reaching customers. Ms Newton has also been teaching them how to segment their messages when clients were once blasting out SMS marketing texts to all members.

By ensuring you send more relevant sales messages, you use customer data effectively to deliver a personalised experience.  The results speak for themselves as clients are getting excellent results and responses.

Ms Newton finds that clients are very impressed with how SMS communications can help contribute to loyalty objectives. In one example, knowITall offered pharmacies the ability to reward their top 50-100 customers over Christmas with credits on their loyalty cards. 

Clients could choose to send their customers email communications or email and SMS messages to redeem. Pharmacies found they had a 37% redemption rate through email, but redemptions jumped as high as 66% when sent through SMS.

Another campaign prompted customers to update their details. 10% of recipients clicked through when sent an SMS, while only 2% did so when sent an EDM.

Final thoughts, further reading

If you’re interested in getting started or using SMS as part of your customer service,  make sure to chat to one of our SMS experts now. They can help you understand your options or get you started on a free trial.

Make sure to also check out:

• Why building brand loyalty is easy with these 7 text tactics
• Learn how to build consumer trust online with this handy webinar and recap
• Understand how to gain customer trust and confidence with text messaging

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• How to
• Retail
• SMS