How to Design a Loyalty Program That Keeps Customers Coming Back

The optimal structure for a loyalty program depends on the specific goals of a business. Finding a rewards scheme that reflects your brand values and resonates with your customer base is essential.

It should also make financial sense and offer something your customers value. You can also reward existing customers by giving them a discount for their friends and family, encouraging word-of-mouth promotion.

Offer a variety of perks

The goal of any loyalty program is to encourage customers to spend more than they would otherwise, so companies need to offer precious perks. Market research and analysis will reveal which benefits will motivate your audience. For example, apparel and outdoor gear retailer offer their top loyalty members exclusive discounts, VIP events, and a customized experience that aligns with their lifestyles. These perks are more valuable than free gloves, which could be offered to all customers.

Another great way to drive retention is to make the program easy for new customers to join. Incorporating information about the program in thank-you emails and the onboarding process will help new customers understand how to participate. Moreover, marketing teams can promote the program on social media and email campaigns.

Finally, it’s important to set measurable goals for the program and track its progress. For example, suppose an e-commerce company wants to increase average order size (as well as customer lifetime value). In that case, the team can identify if the loyalty program is helping achieve those goals by tracking purchase behavior.

In a world of competing products, loyalty programs can help organizations differentiate themselves from the competition and build loyal audiences. They can be points-based, referral-based, cash-back, and more. With the right strategy, loyalty programs can significantly impact the bottom line.

Make it easy to earn points

Loyalty programs are more effective when they are easy to understand and use. If customers have to keep track of how many points they need or constantly rethink whether they will earn their reward, they may lose interest in the program. That is why it is essential to design a loyalty program that will work for your audience and then regularly communicate changes to the program. Organizations can do this through in-store signage, promotional emails, and social media.

When designing a loyalty program, it is essential to consider how quickly customers will earn their reward. It should be fast enough to keep them striving toward their goal but not so fast that the reward loses value. For example, if a customer has to spend $100 on products to earn a $10 discount, they will probably only try to reach their goal once they get there.

Some brands, such as apparel and outdoor gear retailers, offer flexible ways for consumers to redeem rewards. Offering a personalized experience helps companies remain competitive. They also encourage members to share their experiences online to drive referrals and brand awareness. 

Make it easy to redeem points

A loyalty program provides value to your best customers in exchange for their ongoing affinity with your brand. It’s a win-win that allows you to retain more customers and increase sales. At the same time, your most loyal consumers do your marketing for you by recommending or promoting your business on their social media or to their friends and family.

When you create a loyalty program, make sure it’s easy for your customers to redeem their points when they want to. A recent study found that 75% of global shoppers prioritize – and shop with – brands that offer loyalty programs with fast, automatic redemption.

Many retailers set up loyalty programs to incentivize repeat purchases, but other ways exist to deliver value for your most valuable customers. 

Another way to build customer loyalty is to give back by donating some of the profits from your rewards programs to charity or welfare organizations. It is an excellent option for businesses committed to their community and can help build loyalty in a unique way that your competitors can’t replicate.

Make it easy to transfer points

The best way to encourage loyalty is by ensuring your program’s rewards are easily redeemed. Customers are more likely to keep shopping with a business that automatically applies their earned rewards rather than one that makes them go through a complicated process of checking their accounts and tracking their progress. Providing easy redemption mechanisms can also build trust between customers and brands.

Another way to increase loyalty is by rewarding your loyal customers for sharing about your brand with their friends and followers. It can generate new business and grow your social media following, boosting your sales and marketing efforts. The key to implementing this type of loyalty program is to ensure that your company’s mission and values align with the goals and measures you establish for your loyalty program.

Aside from establishing what types of rewards to offer and the mechanics of your program, it’s essential to research your audience’s specific preferences. Studies show that shoppers value rewards that give them instant value, provide a sense of exclusivity, and save them money.