User Research

Customer loyalty schemes: Where to begin

03 February 2022 • 4 min read

Customer loyalty - where to start

If you’re thinking about launching a loyalty initiative, it can be tempting to start dishing out loyalty cards and rewarding customers with points and prizes, in the hope that they’ll return for more. But there’s a lot to be done behind the scenes to find out what customers actually want before you get to that stage. 


The first place to start is with background research. Understanding the other loyalty schemes available and deciding which one is the best fit for your customers and business is key. This relationship needs to be symbiotic and mutually beneficial. The success of your loyalty programme will largely be determined by how much you understand this balance, and whether you address the challenges and opportunities a loyalty scheme presents for both your business and customers. 


Insight is key to success – which is where AND Digital comes in. 


Loyalty is an outcome, not just a programme 


At AND Digital, we have a wealth of knowledge in the customer loyalty space, and have built customer loyalty programmes for many market-leading brands – such as ASDA and Avios. What have we noticed along the way? No two loyalty programmes are the same. We’ve helped develop loyalty schemes from scratch, rework points programmes, and launch brand-new loyalty apps – each with different objectives. 


For one of our clients, their aim was to increase frequency of purchase. With the overwhelming choice and lack of differentiation in their market, the challenge was to encourage customers to visit more than once a year. For another client, looking to build a very different loyalty offering, the objective was to increase audience reach and engagement, encouraging more sustainable and valuable buying behaviours across a wider customer base.


In both cases, loyalty was the outcome, not the objective. AND Digital supported with audience research and helped each brand build an effective loyalty programme that resonated with customers and benefited their business.


If you are seriously thinking about customer loyalty, why not download our free whitepaper “Exploring customer loyalty in the ecommerce era” which explore the origins of loyalty, the metrics for success and some tips on how to implement a successful customer loyalty program based on our work with ASDA and Avios.


Identifying the right loyalty scheme isn’t difficult in theory, but not everyone gets it right. Why? Because they create programmes based solely on what the business needs or what the customer wants. In order to be successful, loyalty initiatives need to be mutually beneficial – so how do you begin this journey towards striking the perfect balance?


Stakeholder interviews


Talking to staff is a good place to start. Another employee may have been thinking about customer loyalty for a while, and may have even tried to launch their own initiative (or may be working on their own plan as you work on yours). Organisations are naturally siloed, so reaching out to other people in the business and listening to their ideas will help you join the dots. Stakeholder interviews also offer employees the opportunity to get things off their chest – not a bad thing if it helps you hone in on the answer that may have been right in front of you all along. 


Customer consultation


Customers tend not to shy away from sharing ideas for improvement. They’ll be your harshest critics and point out all the little things that grind their gears and push them towards your competitors. That being said, they’ll also share what they love about your business, why they keep coming back, and why they’ve become your biggest advocates. 


Inviting customers to get involved in the early stages of your loyalty journey will help them feel like a valuable part of the process. You can frame the conversation around designing a customer loyalty programme, but remember to prompt them to think more broadly about why they chose you in the first place, what’s missing from your current offering, and why they return to you anyway. You can also gain insights around other loyalty schemes they may be a part of – what they like and dislike about how other businesses do things. 



Learn more: Customer Experience drives successful loyalty programmes



Market benchmarking and analysis


Don’t be afraid to peek over the fence and see what other brand’s loyalty programmes look like – including those outside your sector. There’s as much to be learned about customer loyalty from your local corner shop as there is from your nearest competitor. 


Not all loyalty programmes are built around points and prizes, so start by researching different models and identifying if any of the mechanics being trailed by other brands could be translated to your own operations. 


If you found this article helpful, why not take a look at our whitepaper “Exploring customer loyalty in the ecommerce era” which gives insights into modern customer loyalty programs and how to ensure you are keeping your customer at the heart of your offering.


User Research

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