7 Tips For Building Effective Customer Loyalty Programs

Posted by Angela White on Aug 15, 2019, 11:00:00 AM

6 minute read

7 Tips For Building Effective Customer Loyalty Programs

When we talk about loyalty, it’s likely that the first thing that manifests in your mind is expectations. Loyalty is something that you expect from your significant other, your employees, your partners, and definitely, your customers.

The concept of “one good customer will bring you ten more customers” is still very much relevant today. The foundation of brand loyalty depends on it. As you offer a superlative customer experience, you leave your client with little choice but to come back for more. The thought of looking for a better alternative disappears.The key is to affect customer at a subconscious level, so much so that they choose to put their trust and valuable cash on your product or service time and time again. The end game is to lay the foundation for an effective customer loyalty program through brand advocates and ambassadors.

Why are Customer Loyalty Programs So Important for Businesses?

Even half a century ago, the concept of customer loyalty, whilst present, did not carry the weight and significance that it does today. But in today's customer-oriented market, it has become essential for businesses to look after their customers not just for the gains but also to survive against the cut-throat competition.

In an advanced society of rapidly growing media and easy, cheap access to the internet, customers are presented with an array of viable options for quenching their need for a better product. The key is to stand out among your competition.

Customer loyalty should therefore be harnessed in every manner possible. Here are seven tips for building effective customer loyalty programs.

1. Consider Using Gamification

Imagine playing a video game on a hard level, just to get your hands on that unique skin that no one has. Gamification works in the same way. Gamification subconsciously engages your customer in a competitive reward-based program to retain them. And this engagement is very important as a survey shows that 70% of business transformation efforts fail due to lack of engagement.

Examples of triumphant gamification used in loyalty programs include the participation in contests or scratch-and-win games, the opportunity to earn extra points by sharing preferences or sharing the application with friends and even the introduction of a virtual reality game.

Look towards how big brands like Sephora have implemented their rewards system through gamification. Offer your customers exclusive offers, premium opportunities or credits for every action they take associated with your brand. Offer easter eggs and other surprise rewards to ensure that your customers are engaged with your brand consistently.  

Strategic Guide to Community Gamification

2. Offer Easy Ways to Earn and Redeem Points

Now that you are providing gamification experiences to your customers, you should make sure that they get their reward in the most hassle-free way. From a customer perspective, if they have to scratch open a reward, the last thing they want is to have to go through a ton of steps to claim a $20 discount. 

Surveys suggest that the mark of an effective customer loyalty program is their active participation in collecting points and redeeming rewards. You should consider giving points frequently enough so that loyal, high-value customers get their rewards within three months and others, within six months.

3. Market Research

To administer a successful customer loyalty program, your team needs to do some research before commencing with the program. There are various outlines available in the market, and you should choose the best survey questions that fit your business requirements.

You need to find out the targets of your campaign, comprehend the nature and size of your business, and build a program that can help you accomplish the goals outlined for your business. Also keep in mind not just your business objectives but also customer’s expectations, the behavior of your customers, and current market trends.

4. Stay in Contact with Your Customers:

Experian data also points out that emails targeted toward your loyalty program participant customers have a 40% more open rate. Also, 22% higher click-through rates, and 29% higher transaction rates, 11% higher revenue or response per email. Send out NPS surveys and customer satisfaction surveys regularly to keep a track on customer sentiment. This is an activity that is an absolute must to stay in contact with your loyal customers after creating an effective relationship with them.

5. Formulate Non-Monetary Programs Around Your Customers' Values:

A complete understanding of your customer base means understanding their importance and sense of worth and shared value. Tool like NPS software, and CES software will give you an idea of the number of customers that will be loyal to your brand.

CeB surveyed consumers on customer loyalty and discovered that consumers were loyal "not to companies, but beliefs." Depending on your business, your customers may find greater value in non-monetary or discounted rewards. Though any company can offer promotional coupons and introductory discounts if they want to, businesses that can add value to the customer in ways other than dollars and cents have a unique opportunity to connect with the customer base. 

6. Market Your Loyalty Program Effectively

“Marketing strategy is where we play and how we win in the market. Tactics are how we deliver on the strategy and execution for the process.”Mark Ritson

No matter how attractive your customer loyalty program is, it doesn’t matter if customers do not know about it. Invest in marketing your customer loyalty program to let your target audience be aware of what additional value your business has to offer. If you have a physical location, then think of investing in flyers and information boards throughout the store to attract more loyal customers. Create a marketing strategy that lets your customers know what they gain by being faithful to your brand.

7. Make Use of Your Social Media Channels

The people that follow you on social media or subscribe to your newsletters and blogs are your potential customers. Apply social media channels and email newsletters to get your potential clients excited with exclusive, limited-time deals and discounts.

Create a standout hashtag for the offer. Give out discount codes and apply the unique hashtag consistently across all your social media channels. You can easily track the campaign and can organize and formulate your offers based on how the campaign is performing.

Unquestionably, customer loyalty is an integral part of any business; whether it is a small scale  business or a multinational corporation. The experience your customers have with your brand is detrimental to the loyalty they cultivate. The key to an effective customer loyalty program is the coordination between departments. Managing customer experience should not be limited to just one department, the entire company should work towards improving CX in every way. 

When your customers enjoy their association with you, loyalty is automatically cultivated. Use the tips mentioned above to build your ideal customer loyalty program. Think out of the box on how you can retain your customers, and put it into practise to ensure the success of your business. 

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