Best Practices

Maximize the Value of Your Loyalty Programs

In this article, we’ll cover different loyalty strategies and how SMS marketing can improve loyalty programs and drive growth.

Mathew Gorka

By Mathew Gorka

February 20, 2023

12 min read

Maximize the Value of Your Loyalty Programs

In today's fast-paced world, businesses are constantly searching for ways to stay ahead of the competition. One way to do this is by using SMS marketing to enhance their customer loyalty programs. SMS marketing, or text message marketing, is a powerful tool that businesses can use to increase the lifetime value of their customers, generate better reviews, and gain more new customers via referrals from existing customers. In this article, we’ll cover different loyalty strategies and how SMS marketing can improve loyalty programs and drive growth.

What is SMS Marketing?

SMS marketing is a digital marketing strategy that involves sending text messages to customers to promote products, services, or special offers. It is a cost-effective, targeted, and personalized way to engage with customers. Unlike email marketing, SMS marketing has a high open rate and a low opt-out rate, making it an effective channel for businesses to reach their target audience. Helios is a tool designed to empower businesses to execute lightning fast, automated, personalized campaigns that ignite their audience.

Why Use SMS Marketing for Loyalty Programs?

SMS marketing is a great way to enhance your loyalty program for several reasons. It is an effective way to keep your customers engaged and informed about your business's latest offerings. It provides a personalized touch to your communication, making your customers feel valued and appreciated. It can help you gather feedback and generate better reviews. All of which can drive new customer acquisition and improve your reputation.

Incorporating Referral Programs Into Your Loyalty Strategy

One of the most significant advantages of using SMS marketing for loyalty programs is that it can help businesses improve their referral programs. Referral programs are an effective way to acquire new customers through the recommendations of existing customers. By incentivizing your loyal customers to refer their friends and family to your business, you can create a strong referral network that can drive growth for your business. SMS marketing is a powerful tool that can be used to incentivize existing customers to refer new customers by offering them exclusive rewards or discounts.

For example, a service-based business such as a fitness studio can use SMS marketing to offer its loyal members exclusive rewards for referring new customers. These rewards could be a free class or a discount on their membership fee. By doing so, the fitness studio can encourage its loyal members to refer their friends and family, which can lead to new customer acquisition and increased revenue. Fitness studios are, at their core, a community. Encouraging your patrons to invite their friends grows your community, and revenue, while giving your existing customers another reason to continue coming back. We’ve all done a fitness activity with a friend or family member, and most agree that it makes it more fun. Plus, spouses, family, and friends, will keep their partners accountable, meaning that attendance should rise for both members.

Subscription-based businesses can also benefit greatly from SMS marketing for loyalty programs. For example, a meal kit delivery service can use SMS marketing to offer its loyal customers exclusive rewards for referring new customers. These rewards could be a discount on their next order or a free meal kit. By incentivizing its loyal customers to refer their friends and family, the meal kit delivery service can drive new customer acquisition and increase the lifetime value of its existing customers. Use an analytical approach to ensure the cost of your reward is still beneficial to your company's bottomline.

Incorporating Exclusive Reward Offers Into Your Loyalty Strategy

SMS marketing can also help businesses improve their loyalty programs by offering exclusive offers to their loyal customers. Exclusive offers can be used to incentivize customers to join the loyalty program and stay loyal to the business. For example, a coffee shop can use SMS marketing to offer its loyal customers exclusive rewards such as free coffee or discounts on their purchases. By doing so, the coffee shop can encourage its loyal customers to continue to visit their establishment and increase their lifetime value.

Incorporating exclusivity is the best way to make your program stand out. For example, for the coffeeshop, the reward can be an “off-the-menu” latte, an exclusive and special “coffee of the month”, or even a unique pastry to accompany a customer’s coffee. Imagine a customer in line to purchase coffee. They see another customer in front of them get a special coffee and are enticed. When they go to order they decide they want to try the exclusive product and thus, they sign up for your program. This gets the customer more interested in your products and brand, without affecting your bottom line. Remember, you do not have to give away the house to delight your customers.

Another example of a perk (pun intended) that is cost-free is an express checkout. Whether that’s an express checkout line, the ability to order ahead, or a quick payment option, customers value time. As the old saying goes “time is money.” In this case, you are giving your customer a better shopping experience without discounting any of your items. In my time as a consultant I’ve set up, audited, and optimized numerous loyalty programs. Our goal was always to find out what the cost of the program was to the company. If you’re not seeing a measurable lift to your customer retention, or, if you’re not seeing the net profit you wanted at the end of the quarter, continue to revisit and refine your loyalty program strategy.

Rewards Points and Personalized Reminders

In addition to enhancing referral programs and offering exclusive rewards to loyal customers, SMS marketing can also help businesses improve their loyalty programs by sending timely reminders and personalized messages to customers. When combining SMS marketing with rewards points, your business can be sure that your customers are aware of their points, benefits, and most importantly, how to use their points. Most customers are confused by rewards points systems, so keep it simple, send reminders, and explicitly state when they are eligible for a reward.

By using SMS marketing to send automated reminders to customers about their rewards and special offers, your customers will become even more engaged and increase their lifetime value. If you’re not sure where to start, we recommend Starbucks. Whether you’re a coffee house or not, their rewards system is phenomenally effective, and its principles can be applied to virtually any business.

Personalized messages are another way that businesses can use SMS marketing to improve their loyalty programs. By using customer data such as their purchase history and preferences, businesses can send personalized messages to customers with relevant offers and recommendations. For example, a clothing store can use SMS marketing to send personalized messages to its customers with recommendations for new products based on their purchase history. Or, if a user has a high points balance but hasn’t used it, you can nudge them by letting them know how many points away they are from an item they’ve previously bought or saved. (more on this in our Personalization Marketing article)

SMS marketing can help businesses gather feedback and generate better reviews from their customers. By sending surveys and review requests to customers via SMS, businesses can gather valuable feedback and use it to improve their products and services. Additionally, by incentivizing customers to leave reviews, businesses can generate more positive reviews, which can drive new customer acquisition and improve their reputation.

Cashback to Boost Cashflow

Cashback programs are a popular marketing strategy that has gained traction in recent years and have proven to be an effective way of incentivizing customers to make repeat purchases while boosting customer loyalty.

One of the most overlooked benefits of cashback programs is that they allow businesses to differentiate themselves from their competitors. With so many options available to consumers, it can be challenging for your business to stand out in a crowded market. Cashback programs, however, give businesses a competitive edge by offering customers a unique and valuable incentive to shop with them.

In fact, these programs offer a range of benefits for businesses of every size, including increased sales, repeat business, and customer loyalty. By offering cashback incentives, your business can attract new customers and keep existing ones coming back. Customers who receive cashback rewards for their purchases are more likely to continue shopping with the business, as they perceive the rewards as a sign of appreciation for their loyalty. This creates a positive cycle of repeat business and word-of-mouth marketing, as satisfied customers share their positive experiences with others. In this way, cashback programs are a cost-effective way of creating a strong customer base, which is critical for the long-term success of any enterprise.

Incorporating SMS marketing into a cashback program can help small businesses take full advantage of the benefits of this marketing strategy. By sending targeted and personalized SMS messages to customers, businesses can promote their cashback program and encourage customers to participate. For example, a business could send a message to customers who have not made a purchase in a while, offering them a cashback reward for their next purchase. This kind of outreach blends personalization, SMS marketing, and loyalty marketing to re-engage customers who may have otherwise gone elsewhere.

SMS marketing, especially with platforms that incorporate personalization, automations, and AI, like Helios, bring your loyalty programs to the next level. That’s because text messages are the best way to keep customers informed about your brand. By sending regular updates to customers about how much they have earned and reminding them of how they can redeem their rewards, small businesses can create a sense of excitement and anticipation around their loyalty program, encouraging customers to keep shopping with them.


In conclusion, SMS marketing is a powerful tool that businesses can use to enhance their loyalty programs and drive growth. By offering personalized messages, exclusive offers, timely reminders, and gathering feedback and reviews, businesses can improve their customer experience, increase their lifetime value, and generate more referrals. SMS marketing can be especially beneficial for service and subscription-based businesses, which rely heavily on customer loyalty and referrals. If you haven't already, consider incorporating SMS marketing into your loyalty program strategy to stay ahead of the competition and drive growth!

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