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Do’s and Don’ts of Running a Customer Loyalty Program


Offering a customer loyalty program can be one of the easiest ways to keep your customers coming back. If these programs are not set up properly, however, they can cause existing customers to go elsewhere and keep new customers away. To keep your customers satisfied – and money in your till – be sure to follow these simple do’s and don’ts of running a loyalty program.

Do keep it simple. Loyalty programs are supposed to be simple. Too many businesses end up ruining an otherwise decent customer loyalty program by making it too complicated. This tactic is not conducive to keeping your loyal customers, nor is it conducive to gaining new ones. Try some of the following tips for keeping your loyalty program simple:

  • Make it easy to sign up.
  • Clearly explain how the reward system works.
  • Keep the process of earning loyalty rewards simple.
  • Make it easy to redeem the rewards.

Don’t make it difficult to sign up. As mentioned above, most aspects of a loyalty program should be relatively simple, including signing up for it. Customers who believe that it’s too difficult to sign up for your program most likely won’t bother. By not signing up, these same customers will not have any added incentive to remain loyal to you, which means that you’ll lose their business. To make signing up easy, try these tips:

  • Offer more than one way to sign up. For instance, offer a paper form, as well as an online form.
  • Make the sign up form simple, only asking for vital information, such as name, address, email, and phone number.
  • Have employees fill out and process all of the necessary paperwork.

Do promote your loyalty program. Not promoting your existing loyalty program is a major mistake. Think of it this way – if they don’t know it exists, they won’t sign up for it. You can promote your program in a number of different ways.

  • Send out paper fliers.
  • Advertise on the radio or television.
  • Post the possible rewards on the price tag of an item.
  • Require all employees to ask customers if they would like to join as they are checking out.

Don’t charge a fee. Customers who sign up for loyalty programs are typically looking to save money, not spend it. By charging even a small fee, you are most likely scaring away a large percentage of potentially loyal customers. If you feel that you absolutely must charge a fee, however, at least offer a free trial period, which can help your customers see the benefits of your program.

Do make rewards attainable. If you make it too hard to earn rewards, your loyal customers will feel more frustrated than valued. Making it easy for loyal customers to earn rewards, however, will typically keep them coming back.

Don’t make it too easy to easy to earn rewards. Always remember that your customer loyalty program is about rewarding your best customers, not just any customers. Although offering very easily attainable rewards will often help bring in more business, you may actually lose money in the long run, especially if you offer free products or deep discounts.

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