Loyalty Program for Your Business
Before you get started planning, you should ask yourself if a customer reward program is a good fit for you and your business.
While loyal customers are an important part of any business, some companies aren’t a good fit for loyalty programs.
How about a turkey leg restaurant?
Yes, a loyalty program is perfect for food services and restaurants where customers are likely to want to visit regularly.
People need to eat, so give those consumers a reason to eat at your establishmant…and often!
What about a pharmacy? Or a sporting goods store?
Yes and yes. Giving customers rewards for being a loyal shopper is an excellent way to keep them coming back.
It’s the little things like this that will get your customers driving past the competition and into your parking lot.
Yes, this too.
People are likely to fly a lot less often than they eat at a restaurant or visit a particular pharmacy, but it’s still something that millions of people do several times a year.
If a customer can accrue rewards like miles towards a free flight, why would they ever fly with anyone else?
Wait a minute…Then which ones aren’t a good fit?
That’s a great question. Loyalty programs probably wouldn’t work well for industries like construction or appliance repair because of the frequency of purchase.
Isn’t the market already flooded with loyalty programs?
You could say that, yes, but that’s also why it’s important to throw your hat in the ring.
It will be up to you to make sure your program stands out from the rest.
If you don’t have a rewards program to begin with, customers might just go to your competition instead.
Well, how come I hear about so many unsuccessful loyalty programs that end up losing money?
You can’t just call something a loyalty program, set it in motion and expect it to work.
If you want a successful loyalty program, you need to put the work in.
Careful planning, research and preparation are necessary, and if done right, your business could reap enormous benefits.
Benefits of a Successful Loyalty Program
- First and foremost, the most important benefit is in the name: loyalty. By generating loyal customers that spend money with your business regularly, you are creating a source of revenue that you can genuinely count on. Customers that keep coming back for your products and rewards are also likely to refer their friends and family to do the same.
- Second is customer retention. You may already have an army of loyal life-long customers, but if a hip new competitor opens up in town can you guarantee you’ll keep them? No, but if you have a great loyalty program, chances are much better that you’ll keep them on your side.
- Do you think having a few loyal customers who shop at your establishment a few times a year is as good as it gets? Wrong. A loyalty program can increase customer engagement online and in-store in a never ending quest to collect the great rewards you offer. A loyalty program can turn a customer who shops a few times a year into a customer who shops several times a month!
- Last but certainly not least is data. When a customer signs up for a loyalty program, they are giving you crucial demographic and other information that you can connect with their spending habits as they participate in the program. Using this data, you will know which promotional messages and offers are the most relevant to send to specific customers.
How to Create a Successful Loyalty Program
When planning and putting together the details of your new loyalty program, there are a few important questions you should ask yourself to give your program the best chance for success.
A successful loyalty program must benefit your business and your customers.
What goals do I have for my business?
Your loyalty program should focus on rewarding the customer bhavior that fortifies your overall brand strategy.
If your primary goal is to sell products, then reward customers for how many and how often they buy.
Will my program create any actual loyal customers?
Just because you call something a loyalty program doesn’t mean you’re actually generating loyal customers.
The purpose is not to give away free stuff-it’s to reward and reinforce desirable behavior, encouraging profitable customers to return time and time again.
Will my program be offered at a premium fee?
Choosing to offer a pay-to-join loyalty program can be wonderful and rewarding, but it is something that should be implemented delicately.
If your membership fees are too high for the rewards you are offering, you can scare potential customers off.
If the fees are too low, you risk losing money.
Make sure the rewards you offer are appealing and attractive enough to make the sign-up costs beneficial and cost-effective to your customers.
Which customers are the most valuable and who should benefit from rewards?
An important part of a successful loyalty program is identifying and rewarding your best customers.
The more profitable a customer is, the better the rewards should be.
This will encourage them to continue to be a loyal patron and offer motivation to spend even more.
Will my rewards plan be profitable?
In order for a loyalty program successful, the value you receive must be greater than the cost of the program in general.
Any in loyal or repeat customers is useless if you’re spending more rewarding them than they are spending at your business.
Will the offer be appealing to my customers?
As was already mentioned, the landscape is flooded with forgettable reward programs, and it’s up to you to stand out and appeal to your customers.
Be unique and do something different than simply offering discounts.
Loyal customers are less likely to care what the price of a service or product is compared to the competition, and because of that it is more beneficial to offer additional value for their loyalty rather than giving a discount.
Aim to make participating in the program fun and make sure what you’re offering is something that your customer base will actually want.
How to Successfully Launch a Loyalty Program
Even the most popular loyalty programs in the world would have had difficulty finding success if they didn’t have a strong launch.
When the time comes, make sure you are prepared to launch your program with everything you have-it could be your only shot.
Get the word out
Getting the word out is the most critical step in launching your loyalty program.
If no one knows about about your program, failure is imminent.
Launch a promotional campaign; use social media, email, and even direct mail to inform your customers about the new program.
Print, radio and television can also be a powerful communication tool if you have the budget.
The rewards should be well known
Just because your customers know that your new program exists doesn’t mean you’ve done your job.
It’s just as important for them to know how your program works and how membership can benefit them directly.
Besides sending them details out in your promotional campaign, the program can also be explained and pitched to your customers in person or at the point of sale.
It’s easier to convince a customer to join when they are in the process of purchasing items, especially if they can begin collecting rewards on those purchases immediately.
Also, all employees should be well versed in the program and be able to explain and recommend its value to your customers accurately.
When launching your program, remeber that one of your primary goals is for your customers to grow a personal relationship with your brand.
Approach and introduce your program on a personal level, this way customers who join will feel like they’re becoming part of the family rather than a part of the system.
Reward members promptly
Customers should be able to start redeeming their rewards soon after signing up.
If loyal customers are kept waiting too long for benefits, they can begin to question the value of the program and even end their membership.
It is better to remind them how much their business means by rewarding them with smaller benefits more often than offering larger rewards that are few and far between.
Maintaining a Successful Loyalty Program
Once your program has been launched successfully and is proving to be beneficial for both your business and your customers, your work is not done yet.
In fact, if you want to stay successful, your work will probably never be done.
Here are some things to consider to keep your loyalty program on top.
Keep things new and exciting
Update your program and change up the rewards you offer regularly.
This will give your customers something new to be excited about and an excuse to stay active with your brand.
Listen and learn from feedback
If you’re getting consistent feedback or suggestions from your program members, it might be a good idea to look into it.
Keeping the customers happy is always in your best interest.
Keep your customers informed
Make sure customers not only understand that they are receiving loyalty rewards, but also why they are receiving them.
Positive reinforcement won’t exist if a customer doesn’t realize thay are being rewarded for brand loyalty.
Respond to the competition
Be prepared to adapt and change based on the programs your competitors offer.
You should always aim to have the most attractive program.
Think outside the box and utilize your business strengths to offer something the competition can’t.