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Cecilia Beard
Senior Content Writer @ Yotpo
August 10th, 2022

Entering Your Recession Era: Why Loyalty Members Matter More Than Ever

Invest in loyalty members during times of economic uncertainty.

Table Of Contents

As news and speculation of an impending economic downturn circulate, brands are, once again, rethinking their current marketing strategies. Already, U.S. shoppers are beginning to curtail their spending as inflation rates loom. To cut costs, many brands are reducing their spending on acquisition efforts, like paid social and search, to prepare for further downturns in consumer spending.

While it’s impossible to predict the ins and outs of a recession, well-prepared brands are turning to a data-proven approach to weather this financial storm: their high-intent loyalty members. Compared to a new customer, brands have abundant data on their loyalty customers: their purchase history, VIP tier, favorite products, and more. As a result, brands don’t have to guess what loyalty customers want; they already know and can predict their buying habits accordingly.

Investing in loyalty members is a recession play

Investing in loyalty customers prioritizes dependable profit over uncertain growth during a tumultuous economic period. According to Forrester, on average, loyalty rewards program members in the U.S. and Canada spend $99 more with traditional and online retailers than non-members within a typical three-month period. Based on data from our 2022 brand loyalty survey, loyalty programs influence over 83% of shoppers to buy again from a brand.

Looking back on March 2020, another period of economic ambiguity, many brands turned to loyalty programs to bolster their business — and they’re all the better for it. By capitalizing on a sure win — loyalty members — these businesses focused on retention and high-intent consumer behaviors. For example, Homeworx, a home fragrance brand, launched loyalty during the pandemic to expand their D2C presence. As a result, their program, Club Homeworx, increased their retention rate by 25%, and program members have made 4x purchases as non-members.

It’s time to minimize risk and make your marketing efforts count

With Yotpo Loyalty & Referrals, you can identify your loyal customers and ensure your marketing efforts succeed during financial uncertainty. With strategic insights, understand and predict when customers:

  • Should be re-engaged and how
  • Are most likely to buy again
  • Might churn

But, it goes further than understanding. With Yotpo, your brand can engage loyalty members effectively and at the most impactful time. “There are so many opportunities to tailor promotions based on the shared data within Yotpo’s platform. We can send a text message to just one loyalty VIP tier and also offer them a segmented promotion,” says Callie Tivnan, eCommerce Manager at Barefaced.

Here are just a few examples of how you can engage loyalty members:

Target loyalty members with less than 200 points expiring in the next three months with a double points campaign.

By reminding shoppers of their soon-to-expire points, you entice them to return and make an immediate purchase as well as return down the line to buy with their doubled-earned points.

Target shoppers who have not purchased in the last 30 days but have purchased in the past year with a punch card campaign.

Punch card campaigns give your loyalty shoppers a goal to strive toward. This adds inherent value to your customers’ purchases, giving them a reason to choose your brand over a competitor.

Segment customers who left a low rating on their last review, then offer them bonus points to re-engage them to make another purchase.

Don’t leave shoppers with a bad impression of your brand. Instead, reduce churn and improve customer sentiment in one fell swoop by offering loyalty points to at-risk customers — at scale.

Choose VIP tier shoppers who have left more than one product review, then target them with SMS messages encouraging them to refer their friends.

Conquer acquisition efforts by leaning on your best shoppers. VIP members are already among your happiest shoppers, especially if they’ve left multiple positive reviews. These customers can act as organic brand ambassadors, cutting down CAC and making them feel like a bigger part of your community.

Segment based on VIP tier and send tailored high-impact SMS messages.

Over 55% of customers prefer text messaging because it’s immediate, convenient, and lets them quickly get updates, which is even more true among VIP shoppers. By sending personalized messages to loyalty members, you deliver the bespoke experiences customers crave — and act on.

Encourage top-spending members to “subscribe and save” on their repeat purchases.

Because you have a 60% to 70% chance of selling to an existing customer, versus a 5% to 20% chance of selling to a prospective customer, subscriptions offer more stable proft during times of uncertainty.

The Turmeric Co., a holistic health brand, uses Yotpo’s all-in-one approach to leverage and cultivate loyalty members’ value. Using information collected across touchpoints, the brand has seen a 600% increase in revenue in just 24 months. “Not only do reviews help us understand why customers are purchasing, but we also use segmentation to develop additional flows to drive even higher engagement rates for the loyalty program,” says Thomas Hal Robson-Kanu, Founder.

Knowing your most loyal customers takes out the guesswork

By hedging bets on your loyalty members, you take the guesswork out of your recession strategy. A customer’s loyalty profile stores all of their data in one place, from the time they joined, to which of your social channels they follow, and their purchase and engagement behavior throughout your program. With Yotpo’s integrated approach to loyalty, brands understand when, why, and how their high-intent customers purchase.

By tapping into members’ profiles, you have readily available data on sentiment, purchase behavior, product preferences, and repeat purchases. You know how these customers have rated their past purchases, how many points they have before they reach their next VIP tier, and even analytics to predict churn and shoppers’ immediate next purchase. Loyalty members empower your brand to market with certainty.

Bubble, a new-school skincare brand, acts on loyalty member data, like purchase behavior and motivators, to catalyze customer action and passionate engagement. Bubble sends personalized texts to target shoppers who haven’t purchased in a while, reminding customers of their redeemable points balance. And, they’re encouraging their happiest shoppers — loyalty members — to leave detailed reviews on their favorite products.

Having a loyalty program is the first step to recession-proof your business, but the real advantage comes from encouraging active member participation. Bubble has tailored its program specifically to its Gen Z shoppers, catalyzing a significant lift in reward redemptions. In fact, loyalty redeemers are now the brand’s most valuable customers: The average revenue per redeeming loyalty customer is 171% higher than non-redeemers, and the repeat purchase rate is 73% for redeemers versus 13% for non-redeemers.

Follow the data: Your loyalty members are a sure win

Recessions are a time to remain calm and rely on time-tested strategies. Your brand already won over loyalty members. Now is the time to offer them the experiences they’ve already asked for, leverage the data readily at your fingertips, and execute with confidence. Ready to talk about loyalty? Let’s talk.

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