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4 Elements of A Successful Loyalty Program


Successful Loyalty ProgramLoyalty programs are used to promote a dedicated buying pattern from customers. They are not a new invention. They have been used by retailers and business owners for decades. Local grocery stores would provide ‘Green Stamps’ that were saved on booklets. When the books were filled, customers could receive different types of merchandise. The amount of stamps a customer got was directly proportional to the amount spent. This simple and easy to understand program brought housewives out to shop. The more consumers spent the more stamps they received.

Developing a Loyalty Program

Before designing your loyalty program retailers must understand the reasons for using a loyalty program.

  • To keep existing customers
  • To increase the amount customers spend either by encouraging them to buy more of the same product or to up sell them into a higher margin product.
  • To find new customers

The fundamental starting point of a loyalty program is to create a positive customer experience.

4 Elements of a Successful Loyalty Program

  • Precision Targeting

Some loyalty programs are developed around offering discounts to all consumers. This often is a good way to get more foot traffic through the door, but understanding the customer, their interests and buying behavior will do more to develop brand loyalty than offering wide sweeping discounts to all customers.

A precision offer will identify special interest groups within your customer base. By having unique ‘opt in’ opportunities for specialty groups, according their demographics and interests, business owners can select and target which opportunities would benefit them most.

  • Honesty and Transparency

No one likes the ‘bait and switch’. The program needs to be clearly defined and customers must know and be able to understand the requirements of the program. Being able to explain the program, its intricacies and requirements are essential.

Having hidden agendas and caveats on items will diminish the integrity of the program and of the company offering it.

  • Add Value

Rewards offered by your loyalty program must have a value. To keep customers active in a loyalty program they must want to invest in obtaining the reward being offered. In addition to the actual monetary value, customers want to feel valued and be recognized.

  • Be Obtainable

A successful loyalty program should be structured to give customers an opportunity to achieve the reward. Tiered goals offer an opportunity for customers to maintain status and upgrade increase the excitement.

When establishing a new customer loyalty program communicate with your customers to find out how you, as a business owner, can enhance; your brand, your program and your customers experience. Offering the opportunity for your customers to discuss will engage your customers and allow them to become a significant asset to your business.

By engaging your customers you can ask them which offers they would like to receive and which offers they find the most enticing. This information offers powerful insight into the customer base and what things excite and drive customers into your place of business.

To learn more about building a successful loyalty program download our FREE eBook and have one of our loyalty experts contact you to develop an customized loyalty program.

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