They improve your brand reputation through word-of-mouth recommendations. They increase your revenue and ROI – and they also reduce your marketing costs.

It costs five to ten times more to attract a new customer compared to retaining an existing one. If that fact doesn't persuade you to focus your efforts on customer retention, how about this: returning customers spend 67% more, on average, than new customers.

Through an SMS loyalty program, you can reward customers to keep them incentivised and wanting to return. In this article, we'll show you how.

What is an SMS loyalty program?

Customer loyalty programs take many different forms. There are punch cards where customers take their physical loyalty card in-store to have it punched or stamped. The modern-day version of these is loyalty card apps.

Then there are points systems, where the customer has to clock up a certain number of points through spending to redeem rewards. Not forgetting tiered programs where customers hit spending milestones to access a higher level of reward.

These types of programs are often complicated and expensive to manage. However, a text-based loyalty program is much simpler. It involves encouraging existing or potential customers to provide their phone numbers and sign up for your loyalty program. And then you send out text messages with incentives and rewards.

Why your business needs a text-based loyalty program

An SMS loyalty program doesn't involve expensive customer loyalty software, app development or large-scale marketing. Here are some other benefits:

• SMS is direct and impactful – text messages grab attention, and almost all of them get opened. (Related: fascinating facts about text messages.)
• Texts are sent and delivered virtually instantly.
• It's cost-effective – even though you'll need SMS messaging software to send and track your campaigns, you'll usually only pay for the texts you send. (This is the case with Messente.)
• It's a well-targeted approach – nowadays, consumers think carefully about whether or not to give a business their phone number. So anyone who has signed up to your list will be receptive to being contacted by SMS about rewards.
  

How to launch and promote your SMS customer loyalty program

Follow these steps below to get your SMS loyalty program off to a promising start:

1. Name your loyalty program

Make your customer loyalty program instantly recognisable with a unique name. Some of the biggest brands around do this, e.g. 'VeryMe Rewards' from Vodafone, 'IKEA Family' from IKEA and 'Beauty Insider' from Sephora.

2. Start collecting phone numbers

There are several ways to collect members for your loyalty program. Add loyalty program opt-in checkboxes to existing flows (such as your online checkout). Contact previous customers and request they opt-in to your rewards program. Create a sign-up form on your website or display flyers around your business premises to encourage customers to sign up by text message.

3. Decide what loyalty benefits to offer

How customers will earn rewards and what those benefits should look like need to be decided before you start promoting your loyalty program.

For example, you may decide to offer early access to discounted products, a free product worth $10 after so many purchases, or the chance to join a members-only networking community. Rewards must offer value to customers if you want them to stick around.

4. Choose an SMS messaging provider

To enable you to send out SMS loyalty campaigns in bulk – and track their performance – you'll need to use an SMS platform that integrates with your CRM system. It's essential to utilise data insights to see which customers are opening and engaging with your loyalty program texts and whether your rewards are fulfilling their purpose – increasing customer lifetime value.

5. Continually promote and evaluate your SMS loyalty program

Promote your rewards program regularly as part of your marketing strategy. Use your website, email campaigns, social media platforms and other text marketing campaigns to hammer home the value it brings to loyalty program members.

Regularly review how your loyalty program is doing so you can identify room for improvement. Monitor metrics such as subscriber growth rate, click-throughs and conversions. You may need to change up your incentives now and then, increase the frequency of rewards or focus more on the customers that spend substantial amounts with your business.

What an SMS customer retention program should look like

To inspire your text-based loyalty program, here are some tried and tested campaign examples that consistently perform well:

Thank you message

Drive loyalty behaviour right from the start with a campaign that targets brand new customers and encourages loyalty program signups.

Example:

Hi [Name]! Thank you for your purchase! Why not join our loyalty program (free) to receive rewards by text? Reply Y to opt-in or STOP to unsubscribe.

Discount code campaign

Offer exclusive discounts to loyalty club members that aren't available to anyone else.

Example:

Save big, [Name], with 25% off our entire stationery range. Only available to members until this Friday. Enter code SAVE! at checkout!

Birthday text message

Birthdays provide the perfect reason to contact existing customers and make them feel valued. A birthday reward is a real treat for customers and may entice them to spend more than they usually would when purchasing from your business.

Example:

Happy birthday to you, [Name]! Celebrate this special day with a $10 voucher to spend in-store. Simply show this text at checkout. Redeem within 30 days.

Referral campaign

A great way to grow your loyal customer base is to enlist customers to recommend new ones. Offer a reward for both your existing customer and their referral if they sign up.

Example:

Hi [Name], get a free month's subscription worth $14.99 when you refer a friend. Your friend will get a free month too! Learn more: [URL]

Drive repeat business campaign

If you offer consumable products, drive repeat orders by providing a free product after so much spend.

Example:

Hey [Name], when you buy 10 bags of Waggy Tails dog biscuits, you'll get your 11th bag free (worth $32)! Track your progress here: [URL]

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