After someone subscribes to a membership you offer, you try to make the member stay for the long term. During that period, you meet people who engage with your site consistently, participate actively, and maintain their subscriptions. These are the ones you may consider as your loyal members.

Now about how you can reward your loyal members to keep them connected, there are multiple options. In this content, you’re going to read a lot more about your loyal members and about these options of rewarding them too.

So, let’s get started!

Definition of What A Loyal Member Is?

Whether you have a membership site or perhaps a digital product-selling business loyal members are always going to be your most valued asset. A loyal member is someone who consistently engages with your brand, participates actively in your community, and maintains their subscription over an extended period. 

These members often form the backbone of your business, contributing significantly to its stability and growth. To put it simply, loyal members are the customers who:

• Regularly interact with your site.
• Engage with your content and community activities.
• Show long-term commitment by renewing their subscriptions.

Studies show that 57% of consumers spend more on brands they trust and are loyal to. This shows just how important it is to find and care for loyal members, as they are key to your business's growth and success.

The Importance of Loyal Members

As said earlier, the importance of loyal members is no small feat. A business’s lifeblood is its loyal members. And why is that? Because, their loyalty directly impacts retention rates, and growth metrics of your brand.

Not to mention, their high chances of renewing their subscriptions effectively reduce churn rate while increasing lifetime value. But there’s more to them–

• When a client is faithful to a brand, 46% will stay faithful indeed after an accidental sudden collapse in customer experience. (Airship)
• Your chances of selling to an existing client are 60-70% higher than regular customers. (Altfeld)
• For a brand loyalty program that achieves high levels of personalization along the part lifecycle, customers are 7.5 times more likely to prescribe and 6.4 times more likely to adjust the sum spent to maximize rewards. (Airship)
• Customers passionate about a company have a lifetime value of 306% higher and will recommend the business at a rate of 71% versus the average of 45%. (Motista)
• Emotionally-engaged customers will spend an annual total of about $699 with a company, compared to typical, satisfied customers who will spend an annual total of only about $275. (Motista)
• As compared to the industry average, loyalty leaders generate revenues typically 2.5 times faster and give two to five times the shareholder returns over the next 10 years. (Airship)

Loyal members often serve as brand advocates, promoting your site through word-of-mouth and social media. This helps attract new members at a lower cost. Curious about the membership churn rate? Learn more on Crowdfundly!

Measure The Loyalty Parameter With 11 Matrix

To measure member loyalty, you can take multiple measures depending on your business goals and needs. Here’s a brief breakdown of these measures and how you can calculate them for yourself:

1. Customer Retention Rate (CRR): The number of customers who stay loyal and connected with your brand for a given period of time. CRR represents that amount.

It is determined by the formula:  CRR = ((Ending Customers – New Customers) / Starting Customers) x 100.

Here are some of the most effective digital marketing tactics recommended by industry specialists for customer retention:

Source: invespcro.com

2. Customer Lifetime Value (CLV): This represents the approximate total revenue you can expect from a loyal member's lifetime relationship with your business.

The formula is: CLV = average customer revenue per year x average customer lifespan in years.

3. Repeat Purchase Rate (RPR): This matrix is used to reflect the percentage of customers who shop from a brand over a certain period of time.

It is calculated as: RPR = (Repeat Customers / Total Customers) x 100.

4. Upsell Ratio: This matrix helps your business understand how much of your total revenue comes from selling additional products or services to your existing loyal members.

Here's a formula to calculate it: Upsell Ratio = (Revenue from Upselling / Total Revenue) × 100.

Experts say that “95% of total customers are very likely to be loyal to a company they trust. And 92% among them are more likely to purchase additional products and services from them.”

5. Net Promoter Score (NPS): This matrix works as a tool for measuring customer satisfaction and loyalty. The values used are based on how likely your customer will recommend the company to others.

The formula goes like: NPS = [(% of Promoters) – (% of Detractors)] / (Total Respondents) x 100.

6. Customer Loyalty Index (CLI): This matrix is an ultimate combination of NPS, upsell ratios, and other measures. Specific measures that affect the overall comprehensive measure of your customer’s loyalty.
7. Customer Effort Score (CES): The CES matrix is to help you measure the amount of effort your customers put in, to contact your company and get their issue resolved.

Typically you can run a survey and ask your audience to grade the ease of completing a particular task or resolving an issue. The average result of this survey would be your overall CES score.

8. Active Engagement Rate: This shows the activity rate of customers dealing with a company's products, services, or communications.
9. Participation Rate: It is the involvement of a customer in discussions or any other activities within the community.
10. Churn Rate: The number of customers who stop doing business with a company over a given period.

It's calculated as: Revenue Churn Rate = (Lost Revenue from Churned Customers / Total Revenue) x 100.

11. Customer Satisfaction Score (CSAT): This metric measures the level of satisfaction of customers about the products or services of a company through direct feedback.

The formula is: CSAT = (% of Satisfied Responses) / (Total Responses) x 100.

How To Reward Loyal Members?

To reward your loyal members the best and most productive approach would be running a loyalty program. The industry specialist says— “According to Harvard Business Review, acquiring a new customer can cost 5 to 25 times more than keeping an existing customer.”

There are some strategic approaches you can use to reward your loyalty members:

1. Loyalty Programs: Deploy a program where loyal members can enjoy multiple benefits by staying connected with your brand. You can start with a point system in which 100 points = $1. This way members will be encouraged to earn rewards after gaining 100 points. Offer them to earn points by–

• Shopping and spending money.
• Referring people to new customers.
• Attend events and discussions, etc.

Source: antavo.com

2. Exclusive Content: Provide 2-3 pieces of specialized content every month to keep your members up active and interested. Based on your business niche this specialized content can include special articles, videos, or downloadable resources. 
3. Personalized Perks: Identify a group of loyal members who keep up the most interaction and then study their most picks and interests. Based on these data you can introduce personalized perks each quarter of the year which sums up to 4 times a year.
4. Discounts and Special Offers: Offer members a 10-20% discount on yearly renewals to incentivize long-term commitments. This way by offering huge savings, you’ll be attracting members to continue subscribing while also rewarding already loyal members. This is one of the best ways to reward loyalty and keep revenue consistent.
5. Community Shout-out: Feature 1 the most active member each month in your newsletter. So that, within a year a total of 12 loyal members would be highlighted. These highlights will be treated as your customer’s achievements making up for a more personalized community feeling. It's also going to encourage other non-active members to be more active too.
6. Behind-the-Scenes Access: Give behind-the-scenes access a few times a year to help your members feel connected. This could include virtual tours, exclusive interviews, or sneak peeks of upcoming projects. It builds trust and transparency with your brand.
7. Events: Events are, as a matter of fact, semi-annual activities that create exclusivity with experiences unparalleled in nature. Events can either be virtual or in-person, with special activities, guest speakers, or product previews. The special events create memorable experiences and a stronger member community.
8. Feedback Opportunities: Take advantage of feedback from loyal members through 2-4 sessions in a year. Give them an opportunity to be heard and make them feel their voices are heard. You can use the feedback sessions to improve your offerings and make them feel their opinions count.

Financial Strategies for Successful Loyalty Programs

It's clear that designing and implementing any rewards aka loyalty programs does indeed require some degree of finance. Besides, maintaining this program and marketing costs could add up considerably fast.

These additional costs need to be kept in check. For this reason, experts strongly recommend that businesses like yours make sure–

• To set clear goals for your loyalty programs and other marketing processes.
• Based on repeat purchases, average spend per customer, and customer lifetime value follow up on ROI from time to time.
• Based on loyal member’s feedback and performance metrics optimize and improve your rewards constantly.
• Heed the voices of your customers and their preferences. Then, create marketing plans and shape a reward structure working around those needs. This will keep your loyalty program popular and improve customer satisfaction and loyalty.
• Take extra precautions such as making sure your team is well-trained and well-prepared for the loyalty program. Because with time, needs, and trends the reward and rewarding strategies will need some updates and upgrades too.

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Moreover, To track your loyalty program’s financial impact accurately, calculate the Customer Acquisition Cost (CAC) effectively. Follow this formula: CAC= (Cost of sales + cost of marketing) / Number of new customers.

FAQs

What Is A Loyalty Reward?

A loyalty reward is a type of program that revolves around incentives designed to encourage customers to continue doing business. With this your customers are encouraged to make repeat purchases and in return earn points, discounts, exclusive benefits, etc.

What Is An Example Of A Membership-Based Reward?

An example of a membership-based reward would be the benefits offered to customers in the form of services provided by the company. For example, it can be the annual Christmas bonus or discounts, company retreat, or offer on yearly subscription renewal, etc.

What Are The 3rs Of Loyalty?

The 3rs of Loyalty are Rewards, Relevance, and Recognition. A deeper understanding of these three departments helps your brand get a better grip on key elements of your loyalty program. This Idea was first introduced by marketing executive Paulo Claussen.

Conclusion

A loyalty reward program has the potential to strongly improve member engagement, retention, and overall satisfaction of your loyal members. Not to mention it boosts your sells on the go too.

Understanding the traits of your loyal members is really important. This will help you create a reward program that benefits both parties more effectively. And of course, continuous evaluation and optimization of the loyalty program based on member feedback and performance metrics will make sure of its long-term success and sustainability.