What are the best practices and examples of customer loyalty programs in your niche or sector?

The concept of customer churn can vary. For example, it can be a complete breakdown of the relationship with the company and a partial withdrawal from specific services or products. The first type involves a customer leaving the network or ceasing to use services and pay bills. The second type is characterized by a loss of interest in a certain offer, for example, a refusal to renew a subscription to a particular service. Minimizing customer churn is important for maintaining revenue and business stability. The customer base is a company's key asset, directly affecting its financial performance. Therefore, subscriber retention is one of the most important KPIs for operators, requiring constant attention and a strategic approach to CLM.

Customer churn refers to the rate at which customers discontinue business with a company over a specific period. For instance, a software-as-a-service (SaaS) company might experience churn when subscribers cancel their subscriptions. Churn matters because it directly impacts revenue and growth. For example, a high churn rate can lead to revenue loss and hinder business expansion. Thus, reducing churn through effective customer retention strategies is crucial for sustaining long-term success.

There is a saying "Acquiring a new customer is 8/10 times higher than retaining an existing customer" In my 10+ years of working experience in customer loyalty for Telenor (state-owned telecom company in Norway), I have seen - Churn rate among customers who availed of the company's loyalty products/offers/services less compared to those who didn't avail the offer. To be more specific, 85% of high-value customers retain their loyalty status in next year who were engaged in the previous year, whereas, only 54% of high-value customers retain loyalty status in next year who were not engaged in the company's loyalty products/offers/services.

The silent revenue killer Prioritizing churn reduction: - Higher customer lifetime value - Lower acquisition costs - 25-95% profit boost - Stronger brand loyalty - Increased market share - More upselling chances - Predictable revenue - Better growth focus Ignoring churn: - "Why are sales dropping?" - "How to get more customers?" - "Why is ROI so low?" - "How to beat competitors?" - "Why are costs rising?" - "Need more discounts?" - "Why bad feedback?" - "Why one-time buyers?" 1 section: solutions ? (smart focus) Other: problems ? (wrong questions) Churn = (Lost Customers / Total Customers) × 100 Good: 5% monthly (subscriptions), 75% (single-purchase)

In my company (Telenor), we used to monitor a churn prediction model (Churn: customers who do not make any activity i.e., no usage in consecutive last 3 months) through which we could analyze and predict churn rate (to be). Based on that we ran different offers based on the customers whose usage was found in a declining state. For example, we have identified 3 mil customers (out of 85 mil) who didn't use data services in the last 1 month. To engage these customers we have designed a special data offer so that at least 85% of customers can be engaged through availing data offers based on the success story of previous successful campaigns.

In email marketing, measuring and reducing churn is crucial for sustaining engagement and maximizing ROI. Metrics like unsubscribe rate, open rate decline, and inactive subscribers signify churn. For instance, tracking a decrease in open rates over time could indicate waning interest. To counter churn, segment subscribers based on engagement levels and tailor content accordingly. Offering exclusive promotions or personalized recommendations can re-engage inactive subscribers and prevent further attrition.

In my previous telecom company, we developed a tier-based loyalty matrix (Platinum Plus, Platinum, Gold & Silver) based on 2 different factors - Network Age & Customer Usage. The objective of this loyalty matrix was to "Make Good Customers Better". Any time, lower tier customers would be able to move to higher tier upon increasing their usages. Customers have been engaged in multiple ways i.e., partnership benefits, different events (music/drama focusing on local culture & heritage), privilege services at customer touch-points, activities using social media, and surprise offers. Loyalty offers were designed only for high-value customers so that general customers feel attracted to become high-value customers by increasing their usage.

What so few loyalty programs forget to build into their foundational core: It has to be easy to understand and use: Keep the program simple and transparent. We are often so tempted to add on more bells, whistles, hurdles, and the kitchen sink. All of the original sentiment of rewarding our most loyal members, gets lost in translation after a while.

In email marketing, designing effective loyalty programs involves crafting personalized experiences that foster engagement and retention. Tailor rewards based on customer behavior and preferences to enhance relevance and value. For instance, a clothing retailer can offer exclusive discounts on items frequently browsed or purchased, encouraging repeat purchases and brand loyalty. Implement segmentation and automation to deliver targeted offers, ensuring customers feel valued and appreciated for their loyalty.

Initially, we communicated our loyalty offers by using only BTL channels (SMS, company website, placing POS materials at different stores) with soft benefits only so that the company doesn't need to incur more costs in operations. Over time, customers' awareness increased, and started to avail of loyalty benefits. After doing some surveys from customer insights company started to invest more to engage high-value customers. Designed the loyalty program in such a way that top-tier customers shall get more benefits compared to lower-tier customers. The objective is to trigger low-tier customers to contribute more by giving revenue and moving to the upper tier. Statistics showed 12% of high-value loyal customers contributed 57% of revenue.

In a telecom loyalty program, customers are not required to subscribe to anything. Based on analyzing data through BI customers have been segmented into multiple tiers based on their network age and monthly usage. Customers with higher network age (who are with the company for long) will be included in the loyalty group even if usage is lower, whereas, customers with lower network age have to incur more usage to be enrolled in loyalty program. In a nutshell, top-valued customers (who contributed to the company more) will get top benefits from the company.

In the credit card industry, customers want choice with loyalty benefits which can range from cash back to points for travel, merchandise or gift cards.