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4 Powerful Tips to Create a Successful Customer Loyalty Program

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As a business owner, you’re probably familiar with the idea that to keep a consumer, you’ve got to continue wooing and rewarding them. One of the most effective ways to do so is through a loyalty program. Creating a customer loyalty program takes careful consideration of your consumers’ wants and needs as well as what your business can afford to offer in exchange for their continued business.

When designed well, loyalty programs can prove to be extremely beneficial. According to Hubspot, loyalty programs:

  • Help you retain 20% of your top consumers, who are responsible for 70% of sales
  • Generate twice as many referrals than paid advertising

So where do you begin? Don’t worry. We’ve compiled four tips for building a loyalty program your consumers will love!

1. It Starts With a Name

Memorability plays a huge role in consumer loyalty. The more memorable your brand is, the more likely consumers are to take a second look at your business. This is also true for loyalty programs, and it starts with your loyalty program’s name. When naming your loyalty program, it’s important to keep your business’s brand identity in mind because it’s something your consumers are already familiar with, which will make them more likely to try out your new offer.

When choosing a name, don’t be afraid to think outside the box. Whether you consider your consumer loyalty members to be something exotic, such as part of the Pizza Lovers Club, Supreme Shoppers, or you consider them VIP or preferred members, make sure the name of your loyalty program is catchy and grabs your consumers’ attention, while staying true to your brand persona. 

2. The Simpler, the Better

Rewards programs often rely on some type of points system to track consumers’ activity and rewards. Usually, there is a goal, or amount of points, consumers must earn before they receive a reward. The easier your loyalty program is to understand, the more successful it will be.

Start by deciding what actions will earn consumers points and how many of those points they’ll need to earn a reward. From there, you can decide what the individual rewards will be, and whether or not to create a hierarchy of rewards within your program. One question to ask yourself during this process is: “If I were a consumer, would I understand how I gain points and earn rewards in this program?” 

For example, let’s contrast Dunkin’ Donuts’ and Starbucks’ reward systems. Dunkin’ Donuts has one level of loyalty members, where after earning 200 points, consumers receive a coupon for a free drink of their choice. Starbucks offers a hierarchy of consumer loyalty—green and gold members. Members earn two stars for every dollar they spend, and after earning 125 stars, receive a free drink or food item. Gold members, those who earn 300+ stars in one calendar year, are eligible for addition deals available only to Gold level members.

3. Make Your Consumers' Loyalty Rewarding 

Creating a successful customer loyalty program means you need to build a program that not only entices consumers, but also offers rewards that are reasonably attainable. Make sure your rewards are something your consumers want and will be encouraged to work toward. Making them attainable goes hand-in-hand with developing your points system. To create an enticing and reasonable rewards program, ask yourself the following:

  • What type of reward is most appealing to my consumers?
  • Do these rewards provide enough value and benefits to encourage my consumers to sign up?
  • Can my consumers earn rewards in a simple, realistic manner that doesn’t break the bank for my business?

4. Don't Push Sales

In today’s marketplace, consumers tend to shy away from pushy sales tactics, and when it comes to loyalty programs, it’s important to make sure your loyalty program emphasizes your consumers’ rewards for interacting with your business rather than only focusing on their purchases.

Consider offering rewards for actions in addition purchases, such as leaving a review, taking a satisfaction survey, or following your business on social media. This will provide additional ways for your consumers to earn rewards and encourage them to share your loyalty program with a friend. 

When used correctly, customer loyalty programs are an extremely useful marketing tool to help build relationships with your consumers. They not only allow you to encourage additional purchases from consumers, but they let you reward and say thank you to your consumers for their continued loyalty. And as any good business owner knows—happy customers are the best customers!