A Beginner’s Guide to Building an Effective Customer Loyalty Program

Ira Nachtigal
August 30, 2020
4 min read
loyalty program guide
Ira Nachtigal
August 30, 2020
4 min read

Making use of a loyalty rewards program within your daily business tasks aids in providing you with a higher percentage of your customers’ wallets, and, supposedly their love. This is a brilliant method to encourage the return of customers, again and again, tightening the connection between them and your business or your brand.

To gain the benefits of adding a loyalty program to business tools, you need to plan, create, and maintain a well-designed loyalty system.

What is a Loyalty Program?

Loyalty programs have evolved drastically throughout the years, with the core concept remains the same. Loyalty programs are structured to encourage customers to keep using and purchasing from the business which runs the program.

Customer loyalty management system furthermore allow businesses to collect data about their customers. All of this allows the business to develop a deeper emotional connection with its customers. Making use of a loyalty program is an excellent way for small to medium-sized businesses to encourage loyal customers to buy again at your business and not to be drifted to larger offerings by bigger brands. Gaining this relationship can be done easily with companies that have a smaller chain of command and shorter levels of hierarchy.

How Can You Start a Loyalty Program?

There are a variety of steps that need to be followed to ensure that you establish a successful customer loyalty program.

Decide what type of rewards you wish to offer your customers (and eventually mix between various types)

The type of reward is only limited to your imagination. Different types of incentives can work more efficiently in various industries and sectors. Some incentives may not function as effectively as others, as this is dependent on the type of business you’re running. For example, a small service provider like a beauty parlour might use subscription programs, customer loyalty cards and scheduling tools in her loyalty program, while retail shops like coffee-shops, hardware or fashion stores might want to try a coupon program, membership cards and online purchasing and ordering as their choice. 

Here are some ideas that can work in most industries and sectors of activity:

  • Free shipping for members
  • Discounts on specific products or services (for subscribers or as an incentive to join the program)
  • Early access to products or access to exclusive sales. These can work best during the holiday season. Redeemable points for purchases, like punch cards and featured discounts for members

Nonetheless, your loyalty program should include a wide variety of tools and incentives, from which some should be executed only seasonally, as offering only one reward can fail to attract a broad spectrum of customers.

Decide what actions you wish to reward

There are endless examples of behaviors that you may wish to reward.

  • Mentioning your product or service on social media platforms (reward for sharing)
  • Making purchases that are over a specific monetary value (buy X, get Y)
  • Making purchases at a slower time of day or quieter days of the week (Happy hours)
  • Referring a new customer to support the business (referral reward)
  • Buying a particular brand or product that you’re trying to move (preferably after having enough data to decide on which product or products to focus)

To choose the correct rewarding system, you need to take a look at where your business needs to improve. By doing this, you’re able to highlight the problems faced by your company and tailor your reward system in a way to improve on these flaws. For example, if your business isn’t attracting new customers, offer rewards to existing customers for referring new ones.

Make it appealing for your customers

Simply put, customers won’t sign up for the loyalty program if they don’t think there’s value in it. By offering a wide variety of rewards, you can convince customers of the value of the program as well as keep it exciting and fresh. Try to be creative in the way it presented to the customer, to add the extra spice of your brand.

Review the options you have chosen

Before finalizing your loyalty program, you should research answers from the following questions:

  • Is it easy for you and your team to set-up?
  • What is a loyalty card?
  • What are the costs involved in setting up as well as maintaining the loyalty program?
  • Is it easy for customers to understand and use?  Is it communicated and channeled to the customers in the right way? Using mobile apps and notification, for example, is a great way to meet the customer on her own terms.Is it designed to offer a variety of rewards and customize rewards to specific members? The holy grail here is to use personalized data, like birthdays, to empower the program to become customized for each customer.
  • Is it able to be integrated with tools that are already in use, such as your email marketing software or point-of-sale system?

After doing this research, you’re able to receive accurate information that can aid in providing an effective loyalty program to your customers.

Begin signing up customers

After setting up your loyalty program, it’s essential to ensure that the program is functioning correctly. This prevents any inconveniences from occurring after the application is live and out to your customers.

Once the program is functioning without any glitches, you must promote it exceptionally well, to get as many sign-ups as possible. Using in-store signage and online forms in sync, is a great way to encourage customers to sign up. Make announcements about your loyalty program through your various social media platforms.

Employees play a massive role in the enrolment of customers. Thus, it’s essential to train your employees to promote the loyalty program while conducting sales.

Let Glue automate this great loyalty process for you, to help you focus on your daily business!

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