Data Enrichment & Validation

6 Types of Customer Loyalty Campaigns Powered by Address Validation

January 28, 2021
Author
Inkit Team

Customer loyalty in marketing is something you will always need to fight for. Even minor customer experience issues can make people bounce. 55% of customers state that now they trust companies less than before. 50% have left for a competitor who could better satisfy their needs despite being loyal to the previous brand.

Thus, regardless of whether you have ongoing customer loyalty campaigns or develop your first loyalty program, you should make it right. Only data-driven and personalized marketing will keep customers coming back.

Where to start?

Address validation is a trusted way to boost customer loyalty in marketing. It contributes to a positive customer experience and optimizes your effort in all types of customer loyalty campaigns. You will need it from the moment a customer joins your company to purchase.

To learn how customer loyalty in marketing depends on address validation, read our blog post about:

  • What is customer loyalty in marketing?
  • Six types of customer loyalty campaigns and why you need address validation for them
  • Inkit for automated address validation and positive customer experience

What Is Customer Loyalty in Marketing?

Customer loyalty is the likelihood that previous and existing customers will make a repeat purchase from a company. Customer loyalty in marketing is a combination of measures taken by marketing teams to encourage customers to convert. These usually reward programs, cash back loyalty programs, bonuses, or referral programs.

How to measure it? Customer loyalty metrics

Although there is no universal way to measure customer loyalty in marketing, some metrics can help you understand where you currently stand. Here are the main approaches to measuring positive customer experience and loyalty:

  • Purchase frequency (PF). Divide the total number of orders by the number of unique customers you’ve had during the same time to know how frequently they bought something.
  • Repeat purchase probability (RPP). Divide the number of customers that have purchased X amount of times during a specific period and by the total number of customers during the same period. This will allow you to find out how likely your customers are to make another purchase.
  • Repeat purchase rate (RPR). Divide the number of customers who bought more than once by the total number of customers in a specific period. This way, you will measure how many repeat customers your company has.
  • Loyal customer rate (LCR). Divide the number of customers who purchased 4+ times in a year by the number of unique customers for the same period. LCR will help you understand who are your most loyal customers.

Once you know these numbers, you will be able to track customer loyalty in marketing and understand your progress. The positive customer experience changes mean that your marketing efforts yield the expected result and customer loyalty campaigns work.

loyalty program

6 Types of Customer Loyalty Campaigns and Why You Need Address Validation for Them

Address validation has multiple applications. You will need it to help customers with onboarding, verify their identity, process payment, deliver accurate marketing communications, and complete a range of other critical procedures. Some of them are essential for customer loyalty campaigns and a positive customer experience.

Discover six types of customer loyalty campaigns and how to optimize them with address validation below.

#1. Point customer loyalty programs

This type of program is most often used to increase customer loyalty in marketing campaigns. For every qualifying purchase made, customers receive points. Later, they will be able to redeem points to get a discount or another bonus.

To implement such a program, make sure the process for accruing points is transparent and clear. Don’t overuse points. You need to find the balance between a positive customer experience and your revenue.

#2. Tier-based programs

Tier programs are more advanced point loyalty programs. In addition to collecting points for the use of products and services, customers move from one level to another. Some companies use other milestones instead of points (e.g., completed orders, reservations, etc.). The Genius loyalty program for customer retention by Booking is a famous case. The higher level you have, the more secret offers and special deals you can access. A positive customer experience is guaranteed.

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Tier-based programs will help you focus on higher-value customers and are more engaging than standard point-based customer loyalty campaigns. But note that to make them effective, you will need to communicate with customers a lot and explain the benefits of moving to the next level.

#3. Spend customer loyalty campaigns

These customer loyalty campaigns are encouraging customers to spend more over a shorter period. For example, you can offer existing customers a bonus if they make a $100 purchase over the next 30 days. This will boost activity and help you increase revenue.

Such customer loyalty campaigns can be launched both as a one-time promo or a full-fledged program.

#4. Mission-driven customer loyalty in marketing

Whereas retailers focus on sales, some organizations may need money for other purposes. If you run a charity organization or your business has a strong social mission, mission-driven campaigns are just what you need.

For example, you can donate 10% of revenue from all purchases to a non-profit. In this case, the main challenge is to make customers feel confident in your company and increase their awareness with cross-channel marketing. Word of mouth, social media, and user-generated content effectively promote mission-driven customer loyalty in marketing.

email personalization

#5. Cash-back customer loyalty campaigns

Cashback rewards are prevalent among banks and financial companies. Each time a customer pays with a credit card for a specific product or service, they receive a part of the money back. Later, they can use it to buy whatever they like.

To implement a campaign that rewards customers, you will need to add the necessary functionality to your online banking system. This requires considerable investment and the help of a software development team.

#6. Premium customer loyalty campaigns

Premium campaigns offer unique bonuses and a positive customer experience. For a fair fee, people can join a premium program that unites a limited number of customers.

Of course, this option isn’t for everyone. It’s a preferable solution for famous brands with proven quality and many existing loyal customers.

Why you need address validation for these customer loyalty campaigns

The performance evaluation and planning of customer loyalty campaigns in marketing should be based on data. That’s why you need to know who your customers are and collect different information about them, including physical addresses.

After customers’ details are recorded, you will need to standardize and validate them. Address validation will help you keep the customer base in order and reap other long-term benefits to boost customer loyalty in marketing.

Address validation is necessary to verify customers’ identity when they join loyalty programs

Before you provide people with access to your loyalty program, you need to verify their identity. This will make your communications more accurate and reduce the risk of fraud or data breaches. Street addresses are one of the reliable data types for customer verification.

Address validation ensures a positive customer experience at the checkout

Address data is necessary to run AVS checks during the checkout. The software compares the billing address provided by a customer with the address on file to detect discrepancies. If the address data matches, the transaction is safe.

Tools like Inkit automatically standardize and validate addresses to prepare them for AVS checks. Inkit’s platform also has an address autocomplete that simplifies the checkout procedure for customers. Thus, customers can easily collect points, move to the next levels of tier-based programs, and enjoy other customer loyalty programs’ advantages.

Address validation allows you to run offline customer loyalty campaigns

Physical addresses can be used to deliver personalized print marketing materials. You will be able to send catalogs, leaflets, postcards to increase customer loyalty in marketing.

postal address

Validation and the accuracy of addresses will enable you to reduce the volume of returned mail and optimize expenses.

Address validation is an excellent way to do market research before launching a loyalty program

Collecting and validating address data from customers engaged in your campaign, you get valuable insights into their lives. Their geolocation is useful to predict their preferences, purchase power, and other characteristics necessary to shape customer loyalty campaigns. The better you tailor your marketing efforts, the higher customer retention and loyalty you will get.

Inkit for Automated Address Validation and Positive Customer Experience

Inkit is a Reach Enablement Platform that includes Inkit Verify, among other tools. After integration with your systems, Inkit Verify will autocomplete addresses provided by customers and validate them. If you need to deliver communications to the verified customers instantly, Inkit can also do this. While Inkit Render generates personalized communications, Inkit Send automatically delivers them to specific people based on triggers. This makes your customer loyalty campaigns highly personalized and ensures a positive customer experience.

Want to increase customer loyalty in marketing with Inkit? Contact us to access the software.

Start verifying addresses today

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