We already discussed the importance of customer retention. Most startups fail because of high customer acquisition costs. But that’s only a part of the story. It doesn’t matter how high your CAC is, as long as you can make your customers spend enough money to justify the cost. And that’s what most companies suck at.

Customer loyalty is a great growth strategy too. According to the latest research by Verint, 61% of happy users would tell friends and family about their experiences. And according to data collected by customer loyalty agency Rosetta, engaged users buy 90% more frequently, spend 60% more per transaction, and are five times more likely to purchase in the future. As a result, engaged customers deliver three times the value to the brand over the course of a year.

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Customer loyalty is a huge market too. Although tough to size precisely, it touches almost everyone. US consumers maintained over 3.3 billion memberships in customer loyalty programs in 2015, according to COLLOQUY Loyalty Census. That’s a 26% increase over the number of memberships reported two years ago.

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The fact that you have a loyalty program is one thing, whether it works – another. To help you stay ahead of the curve, here are some trends for this year.

1. Rewarding Actions, Not Just Purchases

In the past, incentivizing extra purchases was enough. Now brands like Walgreens are finding new, more engaging ways to give loyalty points. The company rewards healthy actions and choices, allowing customers get points for activities like jogging with their fitness band, stepping on their smart scale and quitting smoking.

walgreens-app-balance-rewards

2. Customer Analytics & Personalization

Every user has certain behaviors and therefore, they have specific needs. Data allows companies to discover and understand those needs. Tracking customer behaviour and measuring loyalty can help you personalize the experience. Personalization, in turn, makes it much harder to switch to competition, because they won’t get the same tailor-made service elsewhere as a new customer.

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Personalization starts with onboarding.

3. Emotional Engagement

Loyalty and retention programs were traditionally built around logic-based value proposition. “Do X and get Y in return.” But brands like Apple understand the value of emotional engagement and that’s why their customers resemble cults. According to the latest research by Lim College, 66% of millennials may have abandoned what had been their brand of choice in 2013 because the brand no longer fits their identity.

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4. The “Thank You” Goes Offline

It’s no longer unusual for a software startup to use offline marketing strategies and even send physical gifts. Uber delivered cupcakes to its customers, Jawbone sent handwritten thank you notes and Helpscout – a customer support software startup – sent boxes of cookies. It’s easy to ignore email, but real world actions deliver a wow experience.

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Tip: Use Felt app to send handwritten cards.

5. Omnichannel Engagement

Today, customers have 24/7 access to the brands they love through multiple channels, devices and social media. This gives you an opportunity to harness the power of these multiple levels of communication to deliver a cohesive brand message that’s more and more powerful and more likely to succeed in a digital environment.

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