Creating a Loyalty Program

Jacob Brain


Loyalty programs have become a mainstay of customer engagement in both the physical retail and online shopping spaces. Loyalty programs allow you to collect information on your customer’s behaviors, with the trade off of presenting them with more relevant information that increase per customer revenue. In creating a program, we need to look at three factors that can enhance your program to make it stand out.

First, be unique.

A loyalty program that relies on points and plastic cards can get lost in the shuffle. Your loyalty program, just like any marketing or advertising should be relevant and engaging. A brewery that does engraved mugs instead of loyalty cards is a great example of how your program can be relevant to your company’s offering. And the program should engage your customers in a way that not only pushes promotions, but opens up the dialog and shopping experience to engage in a deeper, more meaningful interaction. Focusing on the “Why” of your company is a great way to instill deeper value and loyalty. Loyalty programs, are not loyalty creators. They just allow you to measure the activity. Your messaging and efforts behind the program are what create loyal customers.

Make it measurable

If you do anything with a loyalty program, you should have the ability to collect lifecycle metrics on each of your customers. At the end of the day, if you can not calcualte LTV, or sales inside your loyalty program, you are wasting time. Every interaction and sales that customer makes should be tied into your program. Loyalty program are one of the greatest cohorts a company might ever have of measuring customer return. There are a number of tools that give you reporting, but at the high-level, you need to be able to pull demonstrate the active return in referrals, LTV, NPS, and return ratio on reach measures.

Do more than discounts

Loyal customers are created on more than price. In fact, loyal customers are the ones who are most likely to not care about price in selecting a service.  So why make the carrot on the end of your loyalty stick a discount? You can explore some feedback here, but in most cases the intention is to build value, and you can do that by giving more, not taking away. Find ways to increase what you give to customers, not just take away from your profits. Think outside your box. Even if you sell tires, it does not mean that a gift card to a restaurant would be a irrelevant reward. In the pursuit of being memorable and unique, your rewards can be a big help.

Creating a loyalty program for any industry starts with the intention of making more with every interaction and understanding your customer in more meaningful ways. With a successful loyalty program, its a win-win for both the customer and the company.

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