10 Do’s and Don’ts for Customer Loyalty Programs

by Grace Miller |

10 Do’s and Don’ts for Customer Loyalty Programs

As consumers, we love customer loyalty programs. Who doesn’t love free things? Everyone from major retailers to your local mom and pop shop are implementing some sort of loyalty program to keep consumers coming back. According to the SBA, roughly 400,000 businesses are started each year and that’s a ton of competition just domestically. With an abundance of competition, it’s imperative to your business model to find a way to keep customers coming back. That being said, here are the top do’s & don’ts for your customer loyalty strategy!

DO: Personalize customer loyalty programs

Personalization has a way of converting a whole lot faster and easier. Sending a personalized email or app reminder about a customized suggestion makes users feel like there’s a person on the other side of the screen. Segmenting your customer lists will allow you to cater your products to the right people, which has proven to help create loyalty rusbank.

DO: understand the client

Get out of your C-Suite brain and get into the brain of the customer. Knowing your products, services, and customer base is key to understanding what reward would drive them to come back. By doing as much learning as possible, you’re able to really hone the customer experience.

DON’T: ignore data

We’re betting you have an awesome CRM in place and it should be constantly collecting data on your consumers. Utilize your loyalty program and other data methods to track things like purchasing behavior, engagement information, and even location can go a long way. Some of these are harder to collect but you can do it. Get creative with the types of data and use it. For this purpose, we recommend the Receipt Data Aggregator, which can help you collect and decipher how your customers spend.

customer loyalty program
Inside MacKenzie-Childs’ loyalty program

DON’T: limit how you reward points

There are so many other things you can reward customers for, from purchasing goods to even following your brand on Instagram. We as consumers know we listen to a recommendation from a friend over any marketing materials sent our way. Reward clientele for writing a testimonial, sharing on social media, referring a friend, etc.

DO: know your sales funnel

Understand that there are so many buyer personas and stages in the sales funnel. There are different ways to approach loyalty from each stage. Understand where the consumer is and meet them where they are. And even if they’re not ready to buy, find ways of nurturing that relationship until they are ready!

DON’T: force the loyalty card

Grocery stores are a prime example of how to handle this issue. How often do you forget your loyalty card in the grocery store? Probably more times than you can count. They often ask for the phone number associated and some stores are only utilizing phone numbers and no physical loyalty card. This is a great way to keep consumers coming back without the fear of forgetting. If you have a loyalty program in place, consumers get annoyed when they can’t capture their “points” due to forgetting a physical card. Email addresses, phone numbers, and other unique IDs will help both you and the customer long-term.

DO: monitor your KPIs

It’s so crucial to have a plan in place to track the success of your loyalty program. It costs 5X more to replace a customer than to retain one so know how much you’re spending on acquisition and retention. The KPIs (key performance indicators) will help you track how you market to new consumers so you can turn them into repeat buyers.

DON’T: constantly change the customer loyalty program

Don’t make it difficult for your consumers to understand the program and how it works. If you’re going to make any changes, ensure that it benefits the customer. No one wants their reward program to annoy a customer, so be sure to add incentives but don’t get rid of those rewards you already have in place.

ASOS's successful visual commerce gallery shows off their customers.
Customized branded hashtags for Instagram

DO: Create a Catered Customer Experience

From the very first brand interaction all the way through to conversion, it’s all part of one branded experience. Social media posts, branded hashtags, retargeting ads, and even billboards; ensure your loyalty program is on-brand and has a stellar experience for your clients. 87% of consumers believe brands need to add more to the customer experience, something to consider when catering product for your loyal followers.

DON’T Make Rewards Unobtainable

Meaning the reward should fit the loyalty. Starbucks is great at this. Yes, you need over 150 points to get a free coffee or snack but they offer double point days and easy tasks you can do daily to earn even more points. Chances are the tasks are things you already do because they personalize the experience to the clientele. Make the offer something obtainable and worthwhile.

A successful loyalty program takes a team effort and understanding your consumers. With the right consulting, you’ll know exactly what to do and what not to do in customer loyalty. Here at Annex Cloud, our experts will lay out the right plan to help your brand see great return. If you’re struggling with your loyalty program, Annex Cloud offers some great solutions to your loyalty program needs. Let’s talk today to see how we can help you create a loyalty program that keeps customers coming back for years to come.

[White Paper]
[White Paper]