A customer loyalty program is a customer-oriented marketing strategy designed to create incentives for people to continue to choose and engage with your store, ultimately creating brand loyalty. This guide will walk through the eight steps for creating a customer loyalty program.

In a typical customer loyalty program, consumer activities and behaviours get recognition in return for rewards. Depending on the objectives you want your loyalty program to achieve, you’ll determine which behaviours to reward and what incentives to offer. Whether you want to encourage referrals or boost social media engagement, define the objectives of your loyalty program so that it promotes specific shopping habits and boosts targeted goals for your business.

For example, in order to increase trust and traffic to your e-commerce site, let’s suppose you want to improve your online reviews. You can set up your loyalty program so that participants receive benefits each time they submit a product review. Using dedicated loyalty software makes this particularly simple.

What actions you will reward ultimately depends on the objectives of your loyalty program. The next step is to decide what those rewards will be once this has been established.

When creating your loyalty program, you need also think about the incentive, especially whether the reward you are giving your consumers would be appealing to them. In the end, a desirable incentive will encourage customers to connect with and spend money at your business and will increase customer loyalty.

When choosing a reward incentive, take into account what will excite your clients. For example:

It’s time to choose a customer loyalty program structure after you are aware of the objectives of your rewards program and the offerings you will present. The structure of your rewards program specifies precisely which actions result in rewards whatever those incentives are.

The seven distinct types of loyalty programs you can select from are listed below, along with examples of their use in successful scenarios.

After you’ve decided how to structure your loyalty program, you’ll need to decide whether you want to run your program manually or with a loyalty program software. If you go the traditional manual approach, you’ll be the one tracking when customers perform loyalty actions and manually awarding them points, rewards, or whatever you want.

Loyalty program software, however, can automatically integrate your loyalty program with your existing POS and e-commerce site and track member actions, keep member information on file, award points or other rewards, send outreach messages, and generate program success reports.

To make sure that your loyalty program is consistent with the rest of your business, you must also brand all of its components.

It has been demonstrated that presenting a brand consistently throughout the rewards structure can boost revenue by 33% and encourage customers to spend money with you.

Any marketing campaigns aimed at clients who are not physically present in your store are categorized as outreach marketing. The most popular form of outreach marketing used in loyalty programs is email and text campaigns that offer exclusive benefits, reward for certain actions or just serve to remind customers about your company. These messages can be distributed manually or automatically using loyalty programs software.

A loyalty program’s marketing may take on numerous forms. You can get in touch with people to inform them about events or sales, offer them deals, send out surveys, remind them of their rewards opportunities, or just remind them about yourself. It’s up to you what your messages say, but as with everything in the loyalty program, be sure that what you think of will be both engaging to your members and consistent with your brand identity.

Before launching your loyalty program, you should also think about how you will recruit your first participants. It is rarely enough for consumers to give their information without some sort of signup offer, therefore you must establish an initial incentive to join.

The most popular and appealing choice for clients, in my opinion, is to receive a 10–15 % discount. However, you can provide a discount for your next purchase or even a free gift. Your membership options might be so amazing in some scenarios that you don’t even need to provide an additional acquisition deal.

Depending on your marketing strategy, you can use automation to send a series of triggered messages or actions (or both!). Building automation with triggers reduces the amount of time you spend creating and sending text or email marketing campaigns. Automation also helps you:

• Increase engagement
• Nurture leads
• Boost customer retention
• Deliver a personalized customer experience
• Communicate with new subscribers in real-time
• Shorten sales cycles

Although you are the one who designs and manages your program, it is your employees who will carry it out on a daily basis and introduce it to potential new members. Make sure you train your employees not only on the program interface but also on how to introduce it to new customers, so they can answer questions and resolve any issues. Additionally, you should document your internal training program in writing so that others can use it.

Having some form of reporting mechanism is the last thing you want to accomplish to guarantee the sustainability and continuous effectiveness of your loyalty program. Create a way to track your actions over time while trying new strategies, improving your program, or just evaluating how well it is doing.

Built-in reporting systems for the majority of loyalty program software track program effectiveness over time and provides reports on customer behaviour and journeys to help you understand how different customers engage with your brand and how you can better target them to increase loyalty.

Consider what metrics and what key performance indicators are most crucial to you for understanding the progress of your loyalty program. Think about: Customer behaviours; Number of members; Customer segmentation; Offer effectiveness; etc. Whatever you choose, use reporting findings to change your program in a way that will make it successful.

Customer loyalty programs are incredibly important for growing your business. You should be careful to build a loyalty program that is consistent with your brand and will appeal to your clients. This includes branding your communication with customers, the rewards you offer them, and the program’s overall structure. Use the checklist above to lead you through creating your loyalty program, then watch as customers return again and over again.

Are you eager to discover everything you need to know about loyalty programs?