How to Get Your Loyalty Program Off the Ground

Contributed content / By Sandra Gudat / 29 August 2019

It is easy to start off a new loyalty program on the wrong foot and alienate customers by not keeping their interest. Use tried-and-true methods for launching a successful loyalty program. 

Launching a customer loyalty program can help your company reap profits and can be the difference between having customers keep coming back and having customers forget about you.

Following these two steps can help ensure your loyalty program idea resonates with consumers and offers a high return on investment (ROI). 

Convince the Higher-Ups That Customer Loyalty Programs Are Valuable

Do you have a new CEO who doesn’t believe in loyalty programs or an existing one that doesn’t see the value of your loyalty marketing initiatives? We get it. After all, CEOs, especially in retail, tend to focus with laser-like precision on maintaining margins.

The mistake some CEOs make is thinking that loyalty programs don’t enhance margins – They believe customers would shop with you with the same frequency even if you didn’t leverage loyalty techniques.

That’s where we have to disagree. 

Customers have no end of choices, so why should they choose you?

Therein lies the true purpose of a well-designed loyalty program: to motivate customers to consolidate their category purchases with you. 

Strong loyalty programs build, strengthen, and maintain.
Loyalty programs can attract new customers, and strengthen and maintain relationships with existing ones. 

A well-constructed loyalty program can provide a high ROI for your organization in terms of conversions and brand recognition

Keep Your Loyalty Program Simple

Complexity and inconvenience on many levels can very quickly lead to disengagement. 

This can not only diminish the revenues your program yields but also sour customer relationships — and add a blemish to your company reputation.

By keeping your loyalty program simple, customers will know what they have to do to get rewards.

Simple customer loyalty programs follow a Do X, Get Y structure.  
For example, it can be as simple as “Spend $200 and earn a reward!”

To avoid creating obstacles to loyalty, check your program for these customer inconveniences and challenges:

Challenge 1: Your Program Is Complicated to Understand

Make sure that the program advantages — and how to attain them — are crystal clear to customers. Have the details and rules in an easy-to-locate place and prominent enough to be noticed.

Challenge 2: Enrollment Is Lengthy and Time-Consuming

Don’t try to gather all the customer’s personal information right at enrollment. Instead, start with the minimum, such as full name, address, and mobile phone number or email. Then build a profile over time. 

Too long of an enrollment process will send a customer running straight to your competitors.

Challenge 3: Earning Points Involves a Complicated Formula

Your members don’t want to whip out a calculator to figure out how many points they’ll earn with a purchase. Make sure your earning structure is intuitive and easy to understand. 

Keep the points system in increments of 5 or 10 to make it easier for customers to remember. 

Challenge 4: You Set “Unattainable” Targets for Rewards

Simply put, don’t make it too hard for people to actually earn a reward! Rewards boost satisfaction and a desire to earn more rewards which will lead to more visits and sales. 

If you only have prizes available for maximum points, you will alienate your customers.

Challenge 5: Redeeming Rewards Is Complicated or Restrictive

Can your members redeem their rewards through multiple channels? 

Do you give them a reasonable amount of time to act before their rewards expire? 

Are you careful to limit the number of exclusions and restrictions you place on reward redemption? 

Answering all of these questions and having an easy-to-follow plan in place will ensure that your customers remain active within the loyalty program.

Challenge 6: It’s Difficult to Get a Status Update or View Benefits

Provide clear, regular communications that tell members their rewards or points status and remind them of program benefits. 

Customers already have a lot of complicated things going on in their lives, let’s not make the loyalty program one of them.

Challenge 7: You Recognize One Tender Type Only

Programs that allow members to participate with any form of payment tend to garner better results. But you can still offer added benefits for customers who use your private label credit card.

If customers have options, they have less reason to avoid your program.

Challenge 8: You Require an Actual Membership Card

People are tired of carrying stacks of cards and digging through to find the right one. (Just look at the increasing popularity of mobile wallets.) 

Replace this barrier with a phone number or other intangible identifier. This will ensure that your loyalty program does not slip through the cracks.

Challenge 9: Lack of Staff Knowledge

If a member asks a question about the loyalty program, can your staff answer it? Lack of knowledge in your loyalty program can set leave customers with a bad impression. 

Why should they care about your program, if your employees don’t? Encourage employees to enroll in your program so they understand it from the customer perspective and can become true advocates.

Auditing your loyalty program for these obstacles can help you create a truly customer-friendly initiative that helps boost overall performance.

Build a Solid Foundation for Your Loyalty Program

Digital marketing experts advise businesses to follow these steps so they can win approval from customers. 

With all these pieces in place, you’ll set the foundation for a successful, effective loyalty program with the potential to improve customer relationships while it increases profits for your store. 
 

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