Ecommerce tools have made it easier than ever for businesses to create and manage loyalty programs, but creating a quality loyalty program is not as easy. Sure, a store can create a program that offers points or deals to customers that regularly purchase, but the question remains — is the loyalty program serving its true purpose of engaging customers and giving them a reason to keep coming back?
According to the 2017 COLLOQUY Loyalty Census, the average American household is enrolled in 29 separate loyalty programs — yet they only actively participate in about 12. With more choices than ever available to customers, it's critical to create a loyalty program that actually engages and incentivizes each individual.
Read on to learn four ways you can create a successful loyalty program.
1. Keep It Simple
Many loyalty programs today use a point-based system. These programs typically offer points for taking certain actions; the customer accumulates points and can redeem them for a reward once a threshold amount is reached. To keep customers engaged and interested, the process of earning and redeeming awards needs to be easy to understand and simple to use.For example, if you send an email that says, “Earn an extra 10 points when you make a purchase this month that can be used to get $5 off your next order,” your customer will quickly lose interest. It's ineffective because it requires way too much thinking. But maybe your email subject line says, "Earn 10 points. Get $5 off your next order." That's clear. It tells tells them what they get and how they get it. Get their attention with something simple. Then you can easily outline how your customers gain points, what the points can be used for and how they can redeem their rewards.
2. Gather Data and Personalize
Personalization is a key strategy many marketers recognize they need to use — and incorporating it in a loyalty program is no different. By adding personalization, a brand can differentiate itself and truly build a relationship with its customers. Gathering customer data at every touchpoint to understand their interest across channels — in store, in person and online — is crucial to a successful program. Marketers then need to apply this data to offer relevant, individualized incentives that encourage each customer to return.
3. Incorporate Customer Values
Before deciding on a rewards program, it’s important to understand your customers and what they value. Customers of certain industries may find more value in non-monetary rewards than customers of other industries. A company in the financial industry may see better results by offering loyal customers better cash-back discounts on a credit card. But for a travel company, a better reward may bea seat upgrade on a customer’s next flight. Consumers are more likely to engage with a brand that understands their values, so incorporating those values into a loyalty program can vastly improve your program.
4. Tier-Leveled Program
One major customer complaint about loyalty programs is that it takes too long to accumulate points or rewards. Consumers want to have the opportunity to redeem their points for rewards of value. This leaves businesses in a tough spot — they need to satisfy both the customer’s desire to see regular progress andshow their commitment turning to something of value. A tiered system that rewards customer behavior — beyond just transactions — can resolve this. Rewarding customers for things like event attendance, social engagement, brand advocacy or just being a long-term customer with different amounts of points than for transactions, can help satisfy both. Customers recognize the progress for each of their actions and can eventually get the reward they value.
With the increasing amount of loyalty programs out there, simply having one is no longer enough. Marketers need to analyze and understand their customers to build a loyalty program that customers engage with and see value in. Remember to keep it simple, gather data to personalize your program, incorporate customer value and consider tier-leveled programs for the most successful results.