Merchants that maintain frequent communication with loyalty programme members report three times more customer visits than those that do not send any communications, according to a recent analysis by digital loyalty marketing platform provider SpotOn.
The company's findings were based on user data gathered since February 2014 when SpotOn launched its 'Campaigns' feature, allowing merchants to send real-time, digital offers to invite customers to come back. The resulting figures point to a direct correlation between communication and increased customer activity - and specifically increased customer visits.
Small businesses that send loyalty members two to three communications per week have seen three times more customer visits than businesses that do not send any, with merchant sales reportedly increasing by 15%-50% as a result of these loyalty programme-driven communication campaigns.
However, the study also found that while consistent communication is good, there is a tipping point that can lead to diminishing returns. Businesses that sent more than 13 campaigns each month saw reduced customer visits.
Campaigns sent to loyalty members highlighting a promotion see an average open rate of 41%, compared to the 19% industry average open rate for email marketing. And marketing campaigns that included a redeemable offer achieved open rates that were more than 20% higher than non-promotional emails (such as newsletters or product announcements).
More than 60% of SpotOn's merchant clients have already sent at least one such campaign. For example, according to Bruce Chiang, owner of M&H Cafe in Davie, Florida, "We hit a record day in sales after trying our first campaign several weeks ago, and we've already increased year-on-year sales by 15%-20%."