All About SMS Loyalty Programs | Sinch MessageMedia New Zealand

SMS 101 4 min read | Amanda Ranville wrote in blog on March 4, 2022

_{Last updated October 2023}

As shopping habits change, it can feel harder than ever for businesses to hold on to customers. Building a strong base of loyal customers can really pay off. Loyal customers may want to spend more with you.

What, exactly, is a loyalty program?

Loyalty programs reward your customers for sticking with your brand. You might offer coupons, rewards points, or special offers to your most loyal customers in order to build a lasting relationship with them. By sending timely and personalised messages, you can increase customer retention and referrals.

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.

SMS checks all of the boxes, as they are fast, concise, and can be personalised.

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

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 cornerstones 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.

How to build an SMS loyalty program.

Here are some tips on how to build an SMS loyalty program that will improve your brand’s relationship with its customers:

Consider creating a name for your program that your audience will be able to remember easily.
Choose how your audience will earn rewards. For example, they might earn points with every purchase, or they may receive rewards following referrals or a certain number of visits.
Decide what rewards will be offered. For example, you may use a points system that can be redeemed for free product offers, discounts, or gift cards.
Send welcome messages, confirmation messages, reminders, and thank you notes to customers. An SMS service makes this easy to automate.
Look for more ways to engage with your customers in a personal way. For example, send them a discount code for their birthday.
Track the performance of your program using key metrics, like open rates and click-throughs.

Very importantly, make sure you respect opt-in and opt-out rules. Get their consent to send them promotional SMS and include a way for them to opt-out.

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. Take a look at our library of SMS templates for more inspiration.