Building An Effective Customer Loyalty Program


Customer loyalty programs have extensive benefits for businesses of all sizes. When you boost customer loyalty and retention, you can also increase revenue. It’s less expensive and easier to retain a current customer as opposed to acquiring new ones.

There are other benefits of improving customer loyalty numbers as well. For example, repeat customers tend to spend more on average than new customers, and these programs provide businesses with a competitive advantage.

The ROI on customer loyalty programs also tends to be impressive.

The following are some tips for a modern, effective customer loyalty program.

Make It Exclusive

Customers love to feel special and exclusive. Try to evoke these feelings in your loyalty program. One example of this is the Sephora loyalty program. Sephora doesn’t let people just sign up to be part of the program.

Instead, the program requires that users spend a certain amount to be part of it. This creates the sense that it’s something to be earned by customers.

Also, within the program, there are varying tiers based on yearly spending. When a customer gets to a certain spending point, it’s framed as an upgrade in their membership. The Sephora program is an excellent example of a loyalty program that encourages spending and creates a sense of exclusivity.

Choose a Format That Will Work Well For Your Customers

There are different ways you can offer a rewards program. For example, you can go with a swipe card, but that becomes difficult to manage, and it’s somewhat of an outdated option.

Another option is to do an email-based loyalty program. This means that user automatically receives reward points that are saved to their email account every time they do certain actions.

The best type of program usually comes in the form of a smartphone app. The points are automatically managed, and users can access everything they need while simultaneously interacting with your company app.

The option you choose is going to depend on who your customers are, but with the widespread use of mobile devices that tends to be a program style that’s going to work for the most people.

Reward Actions Beyond Spending

There are ways to reward customers other than their spending, and they’ll appreciate that in terms of loyalty.

One example is providing rewards when customers interact with your mobile app. Another option is to reward customers for sharing your social media content or signing up to receive your newsletter.

Measure Your Success

Finally, the idea of loyalty is often one that’s passed off as being somewhat abstract and difficult to manage, but in reality, it’s not. This is especially true if you’re utilizing a loyalty program.

When you’re designing a program, think about the metrics that you can use to measure success.

For example, maybe you’ll assess analytics based on how many customer interactions you get with your app, or maybe the number of reward redemptions. There are very specific behaviors you can use to gather data and measure the effectiveness of your program. These analytics can then be used to drive other marketing decisions throughout your business.

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