Top 3 Things Marketers Should Keep in Mind When Implementing a Loyalty Program for Life Science Researchers
Submitted by Madhu Augustine on Tue, 05/02/2017 - 20:31
Loyalty programs, or rewards programs offered to customers who make frequent purchases, can be an effective investment for life science vendors: they promote brand loyalty, encourage repeat purchases and increase the lifetime value of a customer. However, most life sciences vendors have not implemented a program, either because the right tools are not available or because they simply don’t know if a loyalty program will work for them.
That said, there have been successful examples in this sector and, when properly implemented, loyalty programs can help vendors’ bottom line. Here, we break down the benefits of loyalty programs and the main factors that life sciences vendors must consider before incorporating one into their business model.
Loyalty Programs: The Basics and the Benefits
While there are many different types of loyalty programs available today, the overarching concept is the same across the board. In essence, a loyalty program is a marketing system that rewards certain purchasing behavior in order to increase factors like engagement, customer loyalty and customer retention rates. These rewards can take various forms, giving customers access to things like free merchandise, discounts, coupons, rewards or even exclusive access to certain products or offers.
So why bother creating such a program? Well, it helps increase profit and ROI. On average, it costs a business 5-10x more to acquire a new customer than it does to sell to an existing one. On top of that, nurtured leads tend to make purchases that are 47% larger than non-nurtured leads, and existing customers tend to spend 67% more than new customers. In other words, it just makes good business sense for a company to nurture their existing contact base and focus their marketing efforts on this segment, and loyalty programs are one of the most effective ways to do just that.
The added benefit for life sciences vendors is the opportunity to develop a direct relationship with end users. How, exactly? A rewards program gives companies the opportunity to identify customers who are purchasing through purchasing agents and supply centers and communicate directly with them.
Getting it Right: Strategies and Examples
In general, a successful loyalty program needs to be intuitive and it has to speak to the target audience’s interests and buying tendencies. If it’s confusing, distracting, or perceived as simply not worthwhile, customers will likely disengage and bounce from the site.
In life sciences, there are many successful examples of such programs. ThermoFisher’s program, for instance, gives customers points for purchasing eligible products. They then get rewards once they have accumulated a certain number of points: 5,000 points, for example, can give them $100 off a $500 order or access to 1 month of craft coffee delivery. And it’s working - the company is seeing higher sales from people who are using the program.
Abcam’s “Abpoints” program takes a slightly different approach, providing their customers with points when they complete certain actions on the site - like submitting data, a product review or an image. Rather than focusing on purchases, then, they reward customer engagement and feedback on their site. Once they accumulate enough points, customers can then choose from a list of available awards and trade their points in accordingly. It’s a different approach, but it’s just as user-friendly and approachable - which means it’s just as effective.
So What’s the Hold-Up?
There are a few common problems that keep people in the life sciences industries from starting a loyalty program or understanding how to make it work in their field:
- In many cases, purchases are made by a third party - like lab managers or purchasing agents - which means that vendors simply don’t know who their end users are or how to contact them.
- For health care providers, there are restrictions on what gifts can be given. These restrictions can vary by country. For example, companies may be restricted from giving gifts to individuals at pharmaceutical companies, to doctors in hospitals or to employees at government organizations.
- Oftentimes, institutions make their purchases through supply centers that buy and stock commonly used items - with the researcher, or end user, buying from that supply center rather than from the vendor. In this case, it can also be difficult to figure out who is using the product and how to contact them.
Life science vendors, then, must be aware of these obstacles - when applicable - and take them into account when creating their loyalty programs. If there are gifting restrictions, for example, the rewards program will need to find innovative ways to reward users without breaking any rules.
This could take the form of a lab gift - a gift that can be shared or used by the entire lab - like ThermoFisher’s coffee delivery, social media recognition, etc. Similarly, if purchases are made through supply centers, the rewards program will need to include ways to identify and reward users who buy from supply centers. This can be done effectively by creating a partnership with the supply centers themselves.
Overall, the main point here is that while loyalty programs may look different in the life science sector, they can still be used to effectively increase conversions and repeat customer engagement. The key, then, is to look at your business model, consider the benefits and decide whether or not a loyalty program is right for you.
