This new age of Direct Selling focuses on creating deep and lasting relationships with customers in addition to affiliates and distributors. A robust customer rewards program is foundational for Direct Selling companies to connect to and continually provide value for their customers.
Why Customer Loyalty?
A well-designed customer loyalty program provides many benefits for direct-selling companies. These programs help retain customers and distributors by delivering additional value for their purchases. But modern loyalty programs go beyond just purchases. They seek ways to continually connect with customers by offering value to ongoing engagement, product reviews, referrals, celebrations, and more. The primary benefits of establishing a modern loyalty program include the following:
- Increased customer retention: Loyalty programs can help retain customers by incentivizing them to continue doing business with you. By offering rewards or discounts for repeat purchases or other desired behaviors, you can encourage customers to remain loyal to your brand.
- Improved customer engagement: Loyalty programs can also increase customer engagement by allowing customers to interact with your business regularly. Providing exclusive offers and other benefits to program members can create a sense of community and foster a stronger relationship with your customers.
- More targeted marketing: Loyalty programs can provide valuable data on your customers' purchasing habits and preferences. This information can create more targeted marketing campaigns more likely to resonate with your customers.
- Increased revenue: By incentivizing customers to make additional purchases, loyalty programs can help improve your income. In addition, loyal customers are more likely to recommend your business to others, which can lead to increased sales and word-of-mouth marketing.
- Differentiation from competitors: Offering a loyalty program can help differentiate your business from competitors and give customers a reason to choose your business over others.
How to Keep Customers Loyal
Being a customer of a Direct Selling company can be confusing or even lonely. Think about it, as a customer, you are introduced to the product or opportunity through an independent seller who is often a friend or family member. You likely purchase primarily because of that relationship. Once you receive your products, it is often the seller's responsibility (your friend or family member) to teach you how to use the product and ensure that you get value from it. But what if the seller is unavailable, new (lacks the knowledge), or doesn't take the time to teach you? You're left with unanswered questions, a product you may not receive value from, and a bad impression of the brand/product/company.
It doesn't have to be this way. Direct Sales companies that value their customers create strategies and systems to ensure they have a fantastic experience throughout their experience with the brand. Their customer loyalty program is the roadmap to facilitate this process:
Steps of a Customer Reward Program
- Establish the relationship - Introduce your brand to the customer and thank them for purchasing. Congratulate them on taking this important step towards better health (or the long-term benefits of your product or service), and assure them that you are committed to helping them have a great experience. Inform them of your Loyalty program (VIP Rewards, Customer Perks, etc.) and the main benefits they will receive (product information, discounts, FREE products, ideas on improving health, etc.). Invite them to take a moment to sign-up for the program and give them a free gift (coupon for their next purchase or additional loyalty points) for signing up now.
- Ensure they receive total value from their initial order - The best way to create a loyal customer is to help them have a fantastic experience with their first purchase. Set up an email/texting campaign that informs them when their product will arrive and what they can do to prepare for it. Once it has reached, provide simple and clear instructions on how to use it. These should be printed and shipped with the order and sent digitally when the product arrives. Follow up a few days later to see if there are any questions about the product and if they have seen any initial results. You can also send emails with testimonials about the benefits other customers have noticed. This helps the customer visualize what kind of results they should be looking for. After 2-3 weeks, ask about their overall experience and resolve any questions or concerns that may come up. Your goal is to help them have the best experience possible. Once the customer identifies a positive result, invite them to leave a review about their experience.
- Make regular contact - Plan on sending emails/texts to your Loyalty program list 2-4 times a month. These should be about more than just deals for purchasing. Share articles and ideas on how to make their health/life better. Educate them on interesting facts about the products they purchased and how it is helping them. Plan on sending a promotional communication (an invitation to purchase) once every 5-6 communications.
- Provide regular additional value - There are many ways to provide value to your customers beyond regular communications. Some of these include providing coupons or loyalty points for:
- Making a second purchase or signing up for an autoship/subscription
- Hitting customer anniversary milestones (3 months, six months, nine months, one year)
- Reading emails/articles and engaging with you on social media
- Having a birthday
- Leaving a review or testimonial
- Sharing a product or article link with a friend or on social media
- Providing feedback on their experience
- Adopt them into the family - Your loyal customers are the foundation of your business. It's important to realize that while some may progress to become active sellers/distributors, the majority will not. Be sure to show how much you appreciate your customers by thanking them for their support and by providing recognition for their progress toward their product-related goals (health, beauty, etc.).
Types of Customer Loyalty Programs
Several types of customer rewards programs are designed to incentivize customers to continue shopping with a particular brand or business. Some common types of customer rewards programs include:
- Points-Based Programs: Customers earn points for every purchase, which can be redeemed for rewards, such as discounts or free products.
- Tiered Programs: Customers earn rewards based on their membership level or tier. Customers move up in the program tiers as they spend more, unlocking more benefits and rewards.
- Cash-Back Programs: Customers receive a percentage of their purchase back in cash, which they can redeem for future purchases.
- Loyalty Programs: Customers earn rewards for being loyal to a particular brand or business over some time, regardless of how much they spend.
- Referral Programs: Customers earn rewards for referring new customers to a business, such as discounts or free products.
- Gamified Programs: Customers earn rewards through games or challenges, such as collecting badges or completing tasks.
- Subscription Programs: Customers receive rewards for subscribing to a service or product, such as free shipping or exclusive content.
Other popular direct sales loyalty programs include:
- Three and FREE - Share with three people and get your product or subscription FREE.
- Host Rewards - A customer hosts an in-person or online sales event (or party) and invites friends, family members, or online social media friends to join. The host receives discounted and FREE products based on the total sales of the event. Hosts often have access to particular products or promotional items only available to hosts.
- Subscription/Autoship Rewards - Usually provides discounted prices on products placed in a monthly subscription. It may also provide access to particular products or bundles only available to those on subscription. Customers who stay on the subscription receive FREE product credit based on the number of continual months on the program.
- Birthday/Anniversary Rewards - Gives a FREE product coupon or discount on the customer's birthday or customer anniversary month.
The New Generation of Direct Sales Customer Rewards
Today, Direct Selling companies are discovering that customer rewards programs must be simple and flexible. Customers may lose interest and stop participating if the program is simple enough. A simple program with clear rules and rewards is more likely to encourage customer engagement and loyalty successfully.
A flexible loyalty program allows customers to earn and redeem rewards in ways that are meaningful to them. This can include offering various reward options, allowing customers to earn points through multiple channels (e.g., online and in-store), and providing opportunities to earn bonus points or rewards for certain behaviors or actions. A flexible program can help ensure that customers feel valued and motivated to participate in the program.
Different customers have different preferences when it comes to loyalty programs. Some customers may prefer to earn and redeem rewards quickly, while others may prefer to save points for more significant rewards. A simple and flexible schedule can accommodate these preferences and encourage participation from a broader range of customers.
Overall, a customer rewards loyalty program that is both simple and flexible can help maximize customer engagement, loyalty, and satisfaction and ultimately contribute to the success of the business.
Costs vs. Benefits
The cost of implementing a customer rewards loyalty program can vary depending on the size and scope of the program, the number of customers participating, the rewards being offered, and the technology used to manage the program.
Here are some of the costs that a company may need to consider when implementing a customer rewards loyalty program:
- Rewards and Benefits: The cost of offering rewards and benefits to customers, such as discounts, free products, or access to exclusive products or content.
- Program Management: The cost of managing the program, such as hiring staff or outsourcing to a third-party provider.
- Technology: The cost of technology to manage the program, such as software or hardware for tracking customer rewards or managing customer data.
- Marketing and Promotion: The cost of marketing and promoting the program to customers, such as advertising, social media, or email marketing.
- Data Analysis and Reporting: The cost of analyzing customer data and reporting on the program's success.
The cost of implementing a customer rewards loyalty program can range from a few hundred dollars to hundreds of thousands of dollars, depending on the size and complexity of the program. However, it's important to note that a well-designed and executed loyalty program can result in increased customer retention, higher customer lifetime value, and, ultimately, increased revenue for the company.
How much should our program cost?
Most direct sales customer loyalty programs operate within a budget of 1%-2.5% of sales. Fixed costs like technology, management, and marketing become less expensive as membership in the program increases. The only variable costs tend to be FREE product credit or product coupons. One way to help mitigate these costs is to include an expiration date. A reasonable (and friendly) expiration period encourages your customers to use the benefit soon, ensuring they receive the value they earned. It also helps the company avoid having everlasting, and ever-increasing differed expenses.
Loyalty Programs We Like
There are many excellent customer loyalty programs in direct sales. Each program offers unique benefits and rewards to customers and can be tailored to meet the specific needs and goals of the business. Here are a few examples of programs that caught our eye:
Younique - Younique's Reward's Link program is a new take on host rewards for online parties. Customers can create a unique rewards link and share it with anyone. The association works for ten days and tracks all orders through the link. The customer earns 10% in product credit for all sales over $200.
https://www.youniqueproducts.com/business/younique-rewards-program
Scentsy Club - Scentsy's "Scentsy Club" program allows customers to earn free products and discounts on future purchases by setting up a recurring order. Customers can choose their favorite Scentsy products and have them automatically shipped regularly.
https://scentsy.com/scentsy-club
Rodan and Fields PC Perks - Rodan's "PC Perks" is an optional rewards program that customers can purchase. It operates like Amazon's Prime membership. For a one-time fee of $19.95, customers enjoy the following:
- 10% off every order
- FREE shipping on orders over $80
- A FREE $50 gift on their 2nd order placed in 30-90 days
- A FREE gift on the anniversary date of becoming a member
- Exclusive offers and rewards
https://www.rodanandfields.com/en-us/pc-perks/learn-more
Non-Direct Selling Loyalty Programs We like
E.L.F Cosmetics - E.L.F.'s "Beauty Squad" is an excellent example of a flexible points-based program. FREE to join; customers earn program points at 10 pts per $1 spent. They also receive points for engagement activities like completing their profile, signing up for their newsletter, connecting on social, and leaving product reviews. The number of perks a customer receives from the program is tiered based on the total number of points and includes:
- Early access to products
- A birthday gift
- Access to exclusive products and collections
- Bonus Point Events
- FREE Shipping with a $10 or a no-dollar minimum
- Loyalty anniversary gift
- Early access to tutorials
- Bonus points during your birthday month
- Try new products before they launch for FREE
- Personal Beauty Advisor consultation
- FREE entry to periodic sweepstakes
- Surprise offers and opportunities
https://www.elfcosmetics.com/e.l.f.-beauty-squad/
Jimmy Johns Freaky Fast Rewards - We like the creativity and straightforwardness of Jimmy John's reward program's name. Their goal is to provide additional value to the customer as quickly and as often as possible. Customers can sign up for Freaky Fast Rewards for FREE and get a coupon for a FREE Sandwich after their first order. Customers get reward badges and a FREE sandwich on their Birthday and earn ongoing FREE items like chips, drinks, and cookies quickly by ordering through their Freaky Fast Rewards account.
https://www.jimmyjohns.com/rewards/
Southwest Airlines - Southwest Airline's "Rapid Rewards" has been around for a while but is an excellent example of removing roadblocks in the customer's experience. When it was released, most airlines had loyalty programs that provided miles or points for FREE flights. But when customers tried to redeem these flights, they found a host of exclusions or rules curtailing when or if they could get their FREE flight. Southwest Airlines removed these rules with no expiration of points, no blackout dates, no limit on the number of points you can earn, and allowing rewards points to be used for purchases of services other than flights.
https://www.southwest.com/rapidrewards/overview
Loyalty Program Communications
The frequency of emails in a customer rewards program depends on several factors, such as the type of program, the prizes being offered, and your customers' preferences.
As a general rule, you want to ensure your customers have enough emails, which can lead to email fatigue and cause them to unsubscribe from your mailing list. However, you also don't want to send emails so infrequently that customers forget about your program or lose interest.
Here are some guidelines to consider when determining how often to send emails in a customer rewards program:
- Set Expectations: Let customers know what to expect regarding email frequency when they sign up for your program. This can help manage their expectations and reduce the risk of unsubscribes.
- Segment Your List: Consider segmenting your email list based on customer behavior and preferences. For example, you could send more frequent emails to your most engaged customers and fewer emails to those less active in your program.
- Test and Optimize: Test different email frequencies and analyze customer engagement metrics like open and click-through rates to determine what works best for your program.
As a starting point, consider sending emails once a week or once every two weeks for most customer rewards programs. However, monitoring customer engagement and adjusting the email frequency as needed is essential to ensure customers stay engaged and continue participating in your program.
Customer Loyalty Tech
Several types of technology can be used to create and run a Direct Sales customer reward loyalty program.
- Loyalty Program Plugins: Many point-based loyalty program plugins are available for Word Press websites with WooCommerce. Some simple yet powerful plugins include YITH Rewards for WooCommerce, Points and Rewards for WooCommerce, MyCred, GamiPress, and Sumo Rewards Points.
- Loyalty Program Third-Party Software: This software is designed to create and manage customer reward loyalty programs. It typically includes point tracking, reward redemption, customer data management, and analytics. Examples of Third-Party Loyalty Software include Stamped.io, OpenLoyalty.io, Kangaroo.com, Smile.io, Loyalzoo.com, and Yotpo.com.
- Customer Relationship Management (CRM) Software: CRM software can manage customer data, track interactions, and personalize communication. This can be useful for creating targeted and personalized loyalty program offers and promotions.
- Marketing Automation Software: Marketing automation software can automate email campaigns, social media posts, and other marketing efforts related to the loyalty program. This can help save time and ensure customers receive timely and relevant communications.
- Mobile Apps: Many loyalty programs have mobile apps that customers can use to track their rewards, redeem points, and receive personalized offers. Mobile apps can also send push notifications and location-based offers to customers.
These are just a few examples of technology that can be used to create and run a customer reward loyalty program. The type of technology that is best for a particular program will depend on factors such as the size and scope of the program, the goals of the program, and the budget available.
How to Measure Loyalty
Measuring the success of a Direct Sales customer rewards program is crucial to determine its effectiveness and making ongoing improvements. Here are some key performance indicators (KPIs) that can be used to measure the success of a customer rewards program:
- Enrollment Rate: The percentage of customers who enroll in the loyalty program.
- Redemption Rate: The percentage of rewards that customers redeem.
- Customer Retention Rate: The percentage of customers who purchase after enrolling in the loyalty program.
- Average Order Value (AOV): The average value of each customer purchase in the loyalty program.
- Customer Lifetime Value (CLV): The total value of a customer's purchases over the entire relationship with the company.
- Net Promoter Score (NPS): A customer will likely recommend the company to others.
In addition to these KPIs, measuring the loyalty program's return on investment (ROI) is essential. Here's how to calculate the ROI:
- Calculate the total cost of the loyalty program, including rewards, program management, technology, marketing, and other expenses.
- Calculate the total revenue generated by the loyalty program. This includes the revenue generated by repeat purchases and referrals from loyal customers.
- Subtract the total cost from the total revenue to calculate the profit generated by the loyalty program.
- Divide the profit by the program's total cost and multiply by 100 to calculate the ROI as a percentage.
Summary
There are many Direct Sales loyalty programs, and customers can choose which programs to participate in. A simple and flexible schedule can help set your schedule apart from the competition and make it more appealing to customers.
A Direct Sales strong customer loyalty program is essential for increased customer retention, higher customer lifetime value, and a better overall customer experience. Your program should help strengthen customer relationships, increase revenue and profitability, and drive long-term business growth.
Do you need help planning, setting up, or running your Direct Selling customer rewards program? Let's chat about your project with a 20-minute consultation.