6 Steps for Developing a Killer Customer Loyalty Program

07.10.21

Advice from Zeemo’s eCommerce and Digital Marketing experts on developing, implementing and marketing an effective customer reward program.

In the cut-throat world of e-commerce, online shoppers have come to expect some level of reward for showing a brand their loyalty.

Adding an innovative customer loyalty program to your digital marketing strategy is a great way to satisfy and thank your existing customers, increase customer engagement, and boost conversions.

With a growing range of digital automation and artificial intelligence tools, it has never been easier to implement an effective customer reward program.

Let's look at what it takes to make a winning customer loyalty program.

What

What is a Customer Loyalty Program?

Customer loyalty schemes are marketing and promotional tools to encourage consumers to connect to a particular brand and promote repeat business. Consumers often join to earn discounts or points they can then redeem for rewards such as goods and services.

With e-Commerce, social media and digital automation changing the way customers transact with brands, 'loyalty' now encompasses more than just being a company's regular buyers.

Loyal customers can be:

  • People who bring in referrals through social sharing
  • People who spread a good word for you through online reviews and testimonials
  • People who have resisted switching to your competitor
  • People who subscribe to your mailing list

Therefore, a good customer loyalty program strategy is structured to offer customers relevant and timely incentives based both on the potential referral value they bring to your brand and their direct buying habits with you.

Customer loyalty is earned through consistently providing good customer experiences. So to build an effective customer loyalty program, you must make it a seamless and frictionless transactional experience across all touchpoints of the customer life cycle. To help you do this, there is an ever-evolving suite of new technology available that makes the most of your customer data to personalise your reward offerings.

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Creating a Customer Loyalty Program that brings you and your customers closer.

Do Your Research

If you are a modern human, then chances are you've already signed up for many customer loyalty and reward schemes. Whether it's getting your stamp for the 10th coffee free at your local cafe, receiving an instant 5% discount when you scan your loyalty card at a large chain store or accruing frequent flyer points with your preferred airline, customer loyalty programs are in use all around you.

Before jumping into implementing a rewards program, you will need to consider all the various ways to approach rewarding customer loyalty and research their effectiveness and narrow the options down to the model that will best fit your business requirements.

In deciding which path to take, be clear on the objective of your campaign and analyse customer expectations, buying behaviour, and current market trends in your niche. Customer data is available through various sources, such as your website analytics, CRM, ERP, social media and search advertising. This data can help you develop a customer avatar to truly understand how they engage with your brand and the sorts of campaigns your customers will most likely respond well to.

You will also need to research the cost and complexity of implementing an appropriate rewards program; the nature and size of your business can be major factors that inform the type you choose. For example, the cafe's ink stamp on cardboard system requires no expensive special technology and costs much less than the individual plastic barcode cards, scanning equipment and software the chain store uses, which is significantly cheaper than running complex multi-affiliate points programs like those used by the airlines.

Start Simple

Once you have decided the type of rewards program best suited to your business, you will need to design an implementation model that is as simple and straightforward as possible. If you overcomplicate your loyalty rewards program or make your customers jump through too many hoops to access it, there is a good chance they either won't understand it or will decide the effort isn't worth the reward.

Starting simple means not reinventing the wheel; give people a perks program they can immediately recognise the value of in a format they know how to use and make it as simple and painless as possible for customers to sign up, for example, issuing a loyalty card when a customer signs up to your program in-store or providing a digital coupon code when signing up online.

If you have decided to reward customers with points on the back of purchases, you need to clearly explain how and for what discounts, experiences, goods or services they can redeem accumulated points for and whether or not points expire, and if so, when. You will also need to provide a means of tracking points both for the customer and at the point of redemption.

Choose Your Rewards

The rewards you provide customers should make financial sense for your business whilst also offering something your customers want.

Deciding on the most appropriate incentives for a loyalty program will come down to your target customers' needs and buying behaviour.

The most basic and common reward is to offer your customers discounts on future purchases with your business or free products or services when they meet a certain value threshold. These sorts of rewards are generally easy to implement and effective, provided you find the viability sweet spot between cost and value. For example, giving away every second coffee could send a cafe bankrupt; however, making a customer collect 50 stamps before giving them a free coffee is excessive and would likely fail as an incentive.

Increasingly popular with larger businesses are reward programs that provide value to customers through affiliate partnerships and third-party contracts. Examples include showing a supermarket docket for a discount on fuel or using frequent flyer points for discounted car rental or hotel bookings.

Sometimes freebies or discounts may not be appropriate and could actually devalue your product or services, so exclusive incentives such as experiential rewards can make a program unique by providing customers with experiences they can't get elsewhere. These can include invitations to member-only events, exclusive previews of upcoming products, or access to educational resources such as webinars and white papers.

Whatever you decide to offer, just remember: for a rewards program to work, it must offer value to the customer.

Automate Wherever Possible

Automation and Artificial Intelligence (AI) are helping improve the personalisation capability of brands to craft more timely and tailored loyalty programs than ever before. By investing in loyalty program management software and technologies, you can significantly cut the time and effort involved and offer more proactive service.

These tools can help you offer a seamless omnichannel experience to customers, whether they shop on desktop, mobile, or in a brick and mortar store. They can allow you to personalise product recommendations or offers based on a buyer's preferences or behaviours and automatically apply discounts at checkout or calculate and display point balances.

AI can act as a virtual assistant, managing much of the support, guiding customers through the sign-up process, answering questions and giving advice associated with running a simple or even multi-tier rewards scheme.

Market Your Rewards Program

It goes without saying there is little point in going to the effort of setting up a rewards program if none of your customers know it exists.

Therefore, wherever you have an opportunity to engage with customers, you need to include a gentle reminder to join up to access the perks you are offering.

Rewards program awareness can be worked into your digital marketing strategy to support your business and customer engagement objectives.

Digital marketing options can include:

Traditional marketing options can include:

  • Brochures & Loyalty Cards
  • Press Releases
  • Newspaper Ads
  • In-store signage

Stay Connected With Your Customers

The best way to guarantee a successful rewards program is to stay in touch with your customers after signing up for it.

One of the easiest, most cost-efficient ways to connect with your rewards program participants is through a well-structured strategic email marketing campaign.

Emails allow you to keep your brand awareness high while letting customers know of available perks they are entitled to and special member-only deals and discounts that can incentivise them to win further business.

Emails containing personalised rewards can also be an excellent way to nudge cart abandoners or customers you haven't seen in a while.

Another great way of connecting with customers is through social media to give your followers exciting and exclusive limited-time deals or discounts. Social Media platforms provide valuable insights into your customers and make it easy to track and tweak campaigns. Social sharing with unique hashtags and link-to posts can help to build brand awareness and are a simple way for customers to refer others to your website.

Conclusion

By giving away something of value to customers, you can boost profits and improve customer retention.

There is no one-size-fits-all loyalty program; every brand needs to decide on the most appropriate incentives and program model based on their customers' needs and buying behaviour and the overall objectives and capacity of the business.

Implemented and managed well, the right loyalty program can reward your loyal customers and bring long-term business success.

If you need help setting up a killer rewards scheme that integrates into your marketing strategy and is perfectly tailored to help reach your business goals, contact Zeemo today.