So, What Is Customer Loyalty Platform, Anyway?

Ira Nachtigal
January 7, 2021
9 min read
what is customer loyalty
Ira Nachtigal
January 7, 2021
9 min read

In this fast-paced day in age, as a retailer, it is paramount that you nurture existing customers and attract new ones – all done through a customer loyalty program. From offering clients affordable and quality products to presenting clever discounts and ensuring your clients’ overall satisfaction, customer loyalty programs work for a reason.

What is a Customer Loyalty Platform?

By definition, a loyalty platform is a marketing strategy used to reward the most loyal customers by providing them with perks like points, discount codes, salon loyalty cards or free giveaways on the first sign-up.

This features can be used for a vape loyalty program, loyalty program for restaurant, a coffee shop loyalty program and others.

With this program, you can build a dedicated community of customers who are thrilled to buy from you, all while your business gains a serious edge against your competitors.

Like many things in life, even these beneficial programs have their pros & cons.

In this article, we will try to present all the pros & cons of customer loyalty programs, while also providing an insight into customer retention and taking advantage of it.

Let’s begin!

Customer Loyalty Program: An Overview

What is customer loyalty and why is it essential for the businesses?

Loyalty programs are an essential feature for any business, but they’re not unflawed. Designing a strategy is one thing, but executing it in practice is another.

As mentioned, such programs are significant for your company’s profit and require creating a stable, loyal community of buyers that keep on purchasing your products.

One of its main advantages is undoubtedly customer retention prioritize because repeated customers bring better profit returns.

Now, let’s explore this advantage in depth.

Customer Retention

The main motive behind any loyalty program is to retain its customers by awarding them upon every purchase.

These rewards can vary from discount codes to free items on the very first purchase, and it’s up to you to decide which method suits your brand the best.

A customer loyalty program is actually a helpful tool in retaining buyers, by giving them a reason to purchase from your company – again and again. Statistically, a loyalty program can increase your company’s revenue from 5%-10%, with most loyal members buying 20% more than occasional customers.

On the other hand, statistics show that if you own a business with, say, a 60% customer retention rate, you will likely lose 3 to 4 times more customers than a business with a customer retention rate of 80%.

Long story short, a retention rate only 5% higher will boost your profit by up to 95%!

Even though customer retention is not without its flaws, it still remains the ultimate benefit for your company’s customer loyalty program.

Now that you have an insight into customer retention, let’s explore its pros & cons.


Advantages of a loyalty platform

Customer retention helps to increase and improve the customer’s lifetime value and to reduce churn. Repeat customers will always deliver more returns than others. Statistically, your loyal buyers will buy around 90% more frequently and are willing to spend over 60% more than the usual customers. They will always bring more than 20% bigger revenue and profit than one-time buyers.

It’s important to mention that even a small change can bring you great results, so it’s up to you to implement the best retention plan and start executing it immediately!


Disadvantages of a loyalty platform

If you are a business owner and trying to maintain a high customer retention rate, you might forget to focus on the needs of the other customers. There is no point if you focus only on your most loyal buyers.

You must pay attention to the needs of all customers because your loyalty program is created for everyone. As you can see, there are more advantages than disadvantages here, all confirming what we said before – customer retention is a crucial part of your business.


How To Calculate the Retention Rate?

When it comes to calculating the customer’s retention rate, follow this equation:

Number of customers at the end of the time period, minus the number of customers acquired in that period, divided by the number of customers at the start.

The approximate result you should get is just below 20%. If you get higher output, you are on the right path! If the result is below 20%, you can use some of the strategies to improve your program, and the numbers will go up. Your loyalty program will attract new customers with the right calculations, and the retention rate won’t go down.

Why Does Retention Marketing Work?

The retention market will always work if you execute the play flawlessly. As soon as you release a new product, there is around a 50% chance that your loyal customers will purchase it than your other customers. On the other side, you’ll spend approximately five times less on customer retention.

Keep in mind that there are many benefits of customer retention, but you shouldn’t forget about your new buyers. The way to increase customer retention is finding a way to retain new customers.

Once you’ve found a way to attract and retain new customers, you’ll have tons of returning customers, making your brand increasingly favored by the day.

Best Ways to Increase Customer Retention Rate

Now that we’ve explained customer retention and its pros & cons, let’s look at some strategies that will help you increase the retention rate and improve your loyalty program. There are various ways for you to increase your customer retention rate, and it’s up to you to choose which one will be on your loyalty program!

Make an Online Quiz

Making an online quiz should be the easiest way for you to increase the customer retention rate. Throughout an educational quiz, you can learn your customer’s needs or interests, and later use the gathered personal info for retargeting with emails, ads, or similar operations.

There are a lot of quiz types that can be used, and you won’t go wrong with any of them. For example, you can make a picture quiz for customers to choose from or create questions focused on the buyer’s needs. Once the quiz is done, gather the information and use it and improve your customer retention.

Customer Service is Helpful Too

Customer service might not seem like the most reliable tool to increase your retention rate, but it can be of great assistance. Some statistics point out that over 50% of loyalty program customers will make an additional purchase because of a positive customer support experience.

The moment you show your customers that you care for them by helping them out with any question they have, they will be more satisfied and will have reasons to purchase from you. Whether it’s phone support, email, or a live chat, make sure your employees are polite and willing to help with any question or issue.

Feedbacks and Reviews Are Crucial

Feedbacks and reviews are probably the best customer retention program. One of the most used ways to encourage customers to return is to show them that their opinion matters. To gather feedback or a review for any of your products, just simply add a feedback section on every product.

The customers can post their experiences, both positive and negative. Feedbacks are an excellent way to increase and improve your business. Use every response to enhance your products, and the buyers will notice that.

Top 4 Key Ways to Keep All Customers Coming Back


1. Offer More Than a Discount

Discounts are a fruitful way to attract customers to your loyalty program, but not the only way. Other than discounts, you should also appeal to customers with other dynamic engagements such as a downloadable loyalty card, redeemable prizes, and more.

2. Trust the Power of Gamification

Turning shopping experiences into games is a super-efficient way to engage your customers to pay and play!

Some of the games you can consider for your loyalty program include:

  • Redeemable points;
  • Badges;
  • 30-day purchase challenges;
  • Performance graphs and leaderboards for your most competitive customers.


3. Develop a Deeper Connection

Having loyal customers purchase your products and services can only be done successfully if you create a lasting bond with them. Namely, allow customers to partake in social programs that always give back – whether with rewards or points.

By interacting with customers more often, you will increase the retention rate and have them commit to your brand long-term.

4. Keep It Simple

Overcomplicating your loyalty program will leave your customers confused and unwilling to purchase further. Therefore, no matter which loyalty program type you implement, ensure it is simple to use, understand and put to practice so your customers can make the most out of it.

The best way to do this is to use automated loyalty program software, like GlueLoyalty, that uses punch cards to simplify the experience for new and existing customers.

How to Build a Successful Customer Loyalty Program?

Implementing a customer loyalty program successfully is just as important as building it right. When building your customer loyalty program, you should aim your focus on several key aspects, as follow:

1. Know Your Customers

Customers will never buy products they don’t need or want, and barking up the wrong tree never made anyone any money. Therefore, you need to establish a suitable interaction with your customers and learn their product and service preferences.

This way, you can build your loyalty program to be detailed and specific to all customer requirements and needs. The best way to design your loyalty program to serve your customers ideally is to:

  • Design customer contact information as part of your loyalty program;
  • Track customer behavior to better estimate customers’ preferences and wants;
  • Categorize customers by personal traits and preferences. Whilst a lengthier process, this approach is all about understanding your customers better and tailoring a loyalty program that perfectly matches their needs.
  • Boost social media engagement with customers to connect to them through all viable marketing channels and present and design your loyalty program in a better light.

2. Choose a Fitting Customer Loyalty Program Type

It’s not easy to decide which customer loyalty program you will use.

Like we mentioned before, there are many programs used in practice, and it’s up

to you to decide which loyalty program fits your business needs to perfection. Although there are various options to consider, the most common customer loyalty management system include:

The Birthday Program

By tracking your customers’ birthdays, you will maximize their satisfaction with your brand. Using a birthday reward for your customers will bring back inactive customers and continue to reward loyal buyers, whilst offering birthday discount codes will give your celebrating customers the pampering, acknowledgment, and awards they want!

The Points Program

The points loyalty program rewards your customers with points for every purchase made. Collected points can be used by customers to purchase products in the future or to exchange them for an award.

The Paid Program

The paid program offers customers the chance to pay a single-handed or one-time annual fee and thus join your VIP list of clients. The most loyal members will then have instant access to new rewards of members-exclusive perks.

The Charity Program

The charity loyalty program differs from the rest as it doesn’t use rewards for purchases but leverages social values shared by your brand and your customers.

A charity program will let your customers see the mission beyond your business and encourage them to contribute to a charitable cause.

The Partner Program

Partnering up with other brands can be its own loyalty program that helps drive a wider spectrum of audiences, thus fortifying the reputability and trustworthiness of your brand.

The Community Program

As the name states itself, the community loyalty program is all about unification and connects your buyers with a like-minded community.

The Subscription Program

In a subscription program, the subscription fee is paid monthly and at a more affordable price, unlike the one-time payment system seen in the paid loyalty program.

The Tiered Program

The tiered program is reserved for customers that spend the most on your products. It is designed to take care of your most loyal buyers by allowing them to collect points for future rewards and follow a set of rules in obtaining those prizes.

3. Reward Certain Customer Behaviors

Not all customer interactions should be rewarded, so it’s important you determine which buyer behavior is worthy of a reward. Some of the behaviors you can reward include:

  • Active customers who continue to shop from your brand even and especially when business is slow;
  •  Customers who refer other potential customers to your brand;
  •  Buyers who continuously engage with your brand on social media.


4. Initiate the Sign-Up Process

Once you have decided on customer loyalty program strategies to implement, you’ll need to promote your products and services, best done by allowing your customers to sign up to your site. To do that, you can rely on in-store ads, website, email newsletter, and sign-up customer rewards.

5. Implement a Customer Loyalty Software

Digitizing your customer loyalty program through automated loyalty software like Glue will save you time, money, and effort in reaching out to customers. Ensure the loyalty software you use is staff-friendly, easy to track, affordable to integrate, and simple to understand. This way, it can help you overcome so-called ‘barriers to entry’ that are essential to the success of your program.

Wanna Estimate Your Loyalty Program Success? Try This Checklist!

Once done with setting up your customer loyalty program, you should evaluate its efficiency to ensure your efforts have paid off. The best way to do that is to go through this checklist!

  • Check Your Customer Retention Rate

The customer retention rate will let you know how long a customer has been shopping from your brand. The simplest way to check the customer retention rate is to compare the behaviors of customers who are part of your loyalty program and those who are not.

  • Check Your Customer Churn Rate

Alongside the customer retention rate, you also need to look into the customer churn rate. This is the rate at which customers cease to shop from your brand. That said, a negative churn rate is a rate at which customers optimize their purchasing activities, and both rates are important to evaluate as essential parts of running a successful business.

  • Offer Customers a Satisfaction Survey

If you really want to learn how productive and functional your customer loyalty program is – ask your customers! You can do this by initiating a survey or a poll that will let your customer provide feedback on your service. With it, you can gather valuable information on what your customers like and dislike about your loyalty program.

  • Read your customer’s feedback and utilize it! This one is self-explanatory – listen to your paying customers and implement the feedback that will yield you the biggest returns!


Why Choose Glue?

Out of all, Glue platform is the only one that strategically focuses on your business needs and customizes your customer acquiring goals.

Through answering a few simple questions regarding your brand, Glue will help personalize and optimize your business, in terms of goals and attracting customers.

Our products work in favor of your business and help set up a branded loyalty program for your business, thus enabling you to easily connect to customers via various channels, all rich in essential loyalty features.

Glue’s products ensure that you have the proper incentive for your business and receive notifications and reminders to further enforce loyalty and ultimately – your revenue.

To better customize your loyalty program and prioritize your goals, GlueLoyalty will send you a series of interactive questions.

Once the questionnaire is answered, we will establish your personalized members’ club so you can reach out to your clientele over a variety of channels and approaches.

With Glue’s customer loyalty solution, you will always stay both on top of your customer needs and in the business loop!

Related articles