The market is extremely competitive in today’s age and this has made winning customer loyalty much more difficult than it used to be. Customers have diverse choices and their needs and demands have become harder to meet.
And the competitiveness of the market and the resulting challenge of customer loyalty stand the same for Fast Moving Consumer Goods and Consumer Managed Goods as well.
So, in this guide, we will take a comprehensive look at loyalty programs for CPG.
What are CPG loyalty programs
Consumer Packaged Goods loyalty programs or CPG loyalty programs are specific loyalty programs for customer retention that are crafted towards building loyalty with consumer-packaged goods in mind.
It differs from traditional loyalty programs as it constitutes features, rewards and technology that are specifically designed for these verticals in particular. This by extension also can include Fast-Moving Consumer Goods as well. Key characteristics of loyalty programs for CPG brands include:
Focus on brand recognition
CPG loyalty programs, besides guiding customers towards certain actions, should also aim at the loftier goal of making the brand beloved among its customers. Brand recognition makes or breaks your business success so the reward program should be capable of building positive brand recognition with the incentives.
This generally starts out as monetary benefits like vouchers and gifts, and once you win customer attention, your CPG loyalty strategies should work towards building emotional loyalty. Community events, factory tours for high-tier members, gamified experiences etc. can help brands achieve this gradually.
Selling through retailers
Bringing the brand and the customer closer is one of the primary goals of a CPG loyalty program. Generally, both CPG and FMCG brands sell through retailers with brick-and-mortar stores and this is where the gap between brand and customer comes from. This brings forth the necessity of a system to validate the purchases of loyalty program members. To resolve this, brands can have mechanisms like QR codes, receipt uploading or unique product code verification, in place.
This can become a hassle for customers if it isn’t done right, and hence the goal of CPG loyalty strategies should be to make these actions meaningful for customers. One way of achieving this is by adding incentives behind these interactions. CPG brands today have to be creative and offer more value with the rewards today as traditional incentives like small discounts or bonus reward points do not cut it anymore.
What are the challenges of customer retention in CPG
The CPG and FMCG markets are expected to grow significantly over the next few years, with competition expected to rise equally. In such a scenario, CPG brands need to ensure that their customers stay, and nurturing brand loyalty is the only way to do so. But besides the competition, there are other challenges CPG brands face when it comes to retaining customers.
Lack of customer data
As CPG and FMCG brands mostly sell through third-party retailers and brick-and-mortar stores, collecting customer data can be difficult. Though customer behaviors, preferences and habits can be understood through ways such as surveys, receipt uploads and feedback requests, customers hesitate to provide data. This is especially true when customers have to go through extra actions to do so. Hence for analyzing CPG consumer behavior for loyalty and gaining genuine insights, there is a need to incentivize these actions.
Need for up-to-date tech
CPG and FMCG brands are always on the lookout for new business solutions and technology to improve brand recognition. There is hence a need for excellent technology as well as teams that can utilize this tech for the best results. CPG brands cannot only focus on setting up good loyalty program models but also need to fully realize their potential to stay on top of the competition.
Private labels
As living costs rise around the world and inflation starts affecting customers, customers are becoming even more price-conscious than before, and go for cheaper, lesser-quality deals. Hence there is a rise in private labels produced by big store chains that meet this trend. To compete with these private labels, CPG brands have to provide value and cost-effectiveness without compromising quality. Loyalty programs can be the right solution here.
Exploring D2C and subscription models
CPG brands today are trying to sell directly to customers and one way they are doing this is through the subscription model. But convincing customers to purchase a bulk of products or make recurring payments is difficult. For this reason, CPG brands have to explore more intriguing and effective reward program models.
Best loyalty program features for CPG/FMCG Brands
Customer retention in consumer packaged goods can only be achieved to the maximum, by opting only the best strategies and providing the best features that are guaranteed to make a difference. CPG brands should consider everything from the best program type, to the reward type to everything that impacts the overall journey for the customer. Below are some of the best loyalty program features that can help CPG brands build trust and create impeccable loyalty program experiences for customers:
1. Defining CPG Loyalty Strategy
Diverse and unique loyalty program types
Loyalty programs shouldn’t merely be a point collection scheme, with little diversity. If your business runs on a subscription-based model, you can have a paid loyalty program where the subscription blends into the reward program seamlessly, with added perks and benefits to subscribers who are willing to pay extra. CPG loyalty strategies can also be used to improve community building that can create a common sense of brand identity among its customers.
Incentivizing brand engagement
CPG brands can keep their customers aligned and engaged with the brand by promoting interactions in various ways. Customers can be rewarded for actions such as social media follows, sharing product reviews etc. or by running contests where best comments, captions or product images are rewarded. Besides this, brands can also reach new customers by offering referral rewards.
2. Connecting with Customers
Surveys
You can use loyalty programs to gain data from customers naturally through tier levels, reward point spending, purchases etc. Besides this you can receive zero-party data such as product preferences, lifestyle, etc. by running surveys. But for customers to engage with your surveys, there needs to be a compelling reward attached to it. For example, you can offer loyalty reward points for those customers who manage to complete surveys.
Coupon code campaigns
CPG brands can print out unique coupon codes that customers can submit via apps, in exchange for reward points. This is a great way for CPG brands to connect with their audiences, as most transactions usually happen between retailers and customers. Coupons can also be used to provide customers a chance at winning limited-edition products, merchandise etc.
3. Gamification
Badges and challenges
Badges and challenges offer CPG brands a simple way to shape and influence customer behavior as these will be viewed as milestones by customers, in order to gain more enticing rewards. For example, a badge titled “Reviewer” can be awarded to customers who complete five or more reviews, with additional benefits attached to the badge.
Prize wheel
CPG brands can gamify their loyalty programs further by having a prize wheel in their loyalty program. Customers who have submitted coupon codes can be presented with a prize wheel with different rewards or multipliers that would increase their reward points. Even though the reward is received based on pure luck, the intrigue and thrill will have customers hooked.
4. Enhancing rewards experience
Partner rewards
Besides rewards from the brand itself, CPG businesses can also expand their gift catalog with gifts, discount coupons and offers from other partnering brands. This diversifies the roster of rewards the customers will have to look forward to.
VIP rewards
Beyond transactional rewards and perks, CPG loyalty programs can build a more engaging rewards experience by giving its most loyal customers exclusive benefits that make engaging with the brand worthwhile. VIP customers can be given additional benefits like early-access products, special factory tours, free shipping etc. to foster stronger brand loyalty.
Examples of CPG and FMCG brand loyalty programs
These are some of the best CPG/FMCG customer loyalty programs out there today. Take notes and get inspired by them.
1. P&G
Procter & Gamble, the American consumer product brand’s loyalty program, Good Everyday, backs a very positive cause along with building trust in consumer packaged products. The brand has a key focus on charity tied to its loyalty experience. Here is how P&G’s loyalty program works:
- Members can upload each receipt and earn 50 points.
- These points can be redeemed for Gift cards of one of the 200 partners or for a P&G product sample. Even though this gift card mechanism sounds unimpressive, the diverse and huge collection of partner rewards is very intriguing and beneficial to customers.
- P&G reward points can also be used for entering their sweepstakes. The brand also gives customers an option to donate to charity as well.
2. Kellogg’s
Kellogg’s, the popular cereal brand has a fun and appealing approach to its CPG loyalty strategies. Revamped in 2022, its rewards program, Family Rewards, is a fine example of how CPG brands can reward customers for purchases done from retailers while collecting valuable insights on their customers at the same time. Here is how Kellogg’s makes it work:
- Customers receive tokens as well as entry to its monthly sweepstakes in exchange for uploading their receipts.
- These tokens can be used to win rewards such as gift cards, magazine subscriptions, branded Kellogg’s merchandise, etc.
- Customers can redeem rewards if they have five tokens. The brand also manages to keep customers coming back for more, by changing the rewards each month to keep it fresh.
3. AspenClean
AspenClean’s Treehouse is a loyalty program that prioritizes building unique and meaningful bonds with customers. This organic cleaning product brand encourages customers to interact with the brand in various ways in order to earn exciting rewards. Here is how AspenClean does it:
- Treehouse has a tiered structure combined with points, where, as customers move up the tiers, they receive more points per dollar spent.
- Points can be redeemed in exchange for exclusive discounts.
- The loyalty program also provides bonus points for birthdays, following on social media etc. By rewarding these non-transactional actions customers are kept engaged with the brand.
4. Lillydoo
Lillydoo, the Germany-based baby care brand has a loyalty program that attempts to encourage customers to repeatedly subscribe to their products with effective loyalty program engagement. Their loyalty program ensures that it increases touchpoints with customers and maximizes the chance of customers subscribing to their products more often.
- Lillydoo Club’s key CPG loyalty strategies are based on subscriptions as well as the earn-and-burn mechanism. The loyalty program has an instant appeal from the moment customers subscribe to their products.
- With their subscription, customers earn points that can be redeemed for exclusive gifts.
- Lillydoo also has a clever way of reaching more audiences. They encourage active subscribers to invite up to 10 friends to win a discount.
5. Yeo Valley Organic
Yeo Valley, since its establishment in 1961, has risen up as the UK’s top organic dairy brand. And their effective marketing for CPG customer loyalty has been central to winning over a loyal community of customers. Their loyalty program, Yoekens, has a unique and fresh approach to community building.
- By entering unique codes from the products, customers can gain Yoe tokens.
- These tokens can be redeemed for benefits like product discounts, community events, free annual organic garden tours etc.
- Customers can also enter Yeo Valley’s regular raffles or donate to company-endorsed charities using the Yeoken tokens.
Conclusion
To compete and stand out as a unique brand and improve customer retention in the consumer packaged goods industry, is not an easy task. Merely having a loyalty program also cannot be seen as a one-stop solution to all your problems either. For tangible results and success, your loyalty program should be unique and engaging and need to deliver the finest loyalty rewards experience.
For this, a solid, competent loyalty platform solution is a must.
Appstle allows you to build innovative and engaging loyalty programs that can scale with your business while enabling you to realize your most impactful loyalty program concepts.
Start building an on-brand, engaging and effective loyalty program right away with Appstle.
