5 Things Businesses Forget to Do After Launching a Loyalty Program
When done right, a loyalty program can generate as much as 20 percent of your profits, but building a successful, profitable loyalty program isn’t as easy as it sounds. Here are 5 things businesses often forget to do after launching a loyalty program. Make sure you do these things if you want to build a lasting loyalty program that generates positive buzz and pads your bottom line.
1. Collect data about customers
One of the greatest benefits of launching a loyalty program is having the ability to collect and analyze data about your customers’ spending habits. Your loyalty program software records everything that loyalty program members buy. Over time, you can accrue a significant amount of data that enables you to track trends and patterns. Tracking sales also enables you to determine who the most and least profitable customers are. Manipulating this customer data correctly offers huge potential benefits.
2. Identify the most profitable customers
Don’t make the mistake of investing your resources in the wrong customers. The real payoff of loyalty programs comes from identifying and locking in the most profitable customers. Companies must do all that is in their power to retain their most profitable customers because they generate significantly more profits. According to a study by the Forte Consultancy Group, one customer at the top of the pyramid generates as much profit as 16 of those at the bottom end of the pyramid.
3. Treat the most profitable customers differently
All loyalty programs should treat customers differently once they reach a certain spending threshold. Just be sure to pay careful attention to how the tiers of your loyalty program are designed, so you don’t let down loyalty program members who are expecting additional benefits.
4. Offer a variety of rewards
One size does not fit all in loyalty programs, so companies should not force limited options onto loyalty program members. Well-designed loyalty programs offer a variety of rewards to ensure that all members get the perks they truly want. If you offer few rewards choices, your loyalty program will not satisfy the majority of your customers.
5. Measure the loyalty program’s performance
Ultimately, the success of your loyalty program must be measured by the returns it provides your organization. That’s why it’s essential to track the results of your loyalty program and determine where it is succeeding or falling short. Measure and evaluate not only the tangible results, but also the intangible results of your loyalty program. If your program isn’t producing the returns expected, implement changes that will improve outcomes.