Identify the right loyalty programme for your business

As brands clamour to compete for the attention of increasingly time-starved customers, loyalty programmes are often touted as a beacon of hope to help cut through the noise. They’re implemented as a means to build deeper, more meaningful connections with customers and develop fruitful relationships with audiences paralysed by the overwhelming choice on offer – both in their lives and to their wallets. 

However, customer loyalty programmes aren’t always the simple, attention-grabbing solution brands are searching for – they’re much more complicated than that. Effective loyalty schemes look different to different companies, depending on the market, target audience and platform. But if you get the formula right, loyalty schemes can help increase customer retention, drive sales, boost profitability and improve brand awareness. 

Perfectly positioning your loyalty programme

The first thing to consider when we think about loyalty is that it’s much more than a programme – it’s an outcome. When done right (and for the right reasons) loyalty schemes can garner greater insight into your customers, helping you meet their needs, make sure they’re happy and keep them coming back for more. But done badly, it can lead to an onerous rewards programme that customers simply don’t engage with. 

So before you embark on your customer loyalty strategy, take a step back and ask yourself: what does loyalty mean to you? And what do you want to achieve with a customer loyalty programme?

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.

Read next: Customer Loyalty: more than just a newsletter subscription

Loyalty isn’t freely given, it’s earned

Businesses can’t increase customer loyalty just by handing out rewards cards – loyalty must be earned. Brands can attract new customers by being in the right place at the right time, but to ensure customers stick around for the long haul, brands need to get the basics right; high-quality products and services, value for money, consistency, great customer service and easy transactions. By being good at what you do and consistently exceeding expectations, you’ll earn loyalty from your customers. 

What’s missing from this picture? There’s not a rewards card in sight. This doesn’t mean loyalty cards don’t have a place in your overarching customer retention strategy, you just need to nail the basics first. Once you’ve perfected those, it’s time to start building a plan of action. 

Mutually beneficial rewards 

The next question to consider is all about your expectations. Many businesses implement loyalty strategies to provide customers with a reason to return to their brand. If you’ve got the basics right, and your rewards provide good enough benefits to keep customers coming back, you’re on to a winner! 

For other businesses, loyalty initiatives have been driven by a need for insights. By keeping customers around for longer, brands can learn more about customer preferences, understand why customers choose them over their competitors, and gather the data they need to improve products, services and relationships. 

Depending on what you hope to gain from your loyalty programme, there are three simple steps you can take to start the ball rolling: 

1. Improve customer experience

Simply improving your products or optimising the customer experience will help build loyalty. Think about brands like Apple and ASOS. Both have massive, loyal customer bases, but for very different reasons. People return to Apple time and again for their  premium products (and are willing to pay a premium price tag), while ASOS is the nation’s go-to online retailer due to their intuitive interface, slick service and fast deliveries. These brands are the best at what they do and provide an enjoyable experience for customers – and that’s enough to keep their customers loyal. 

2. Offer exclusive extras

Enhancing your brand offering with exclusive extras customers can’t get elsewhere will make your brand too good to leave – especially if the rewards are unexpected or exciting. Brands like O2 do this well. O2 Priority customers get priority access to gigs and events, as well as free gym memberships, restaurant discounts and complimentary cinema tickets. The benefits can’t be beaten elsewhere, so customers have no choice but to stick around. 

3. Build benefits into buying

Rewarding customers for spending with incentives, points and discounts they can use on their next purchase is a great way to increase customer retention. The benefits feel tangible and redeemable, so customers feel like they’re getting a good deal. Reward clubs like Avios and Pets At Home VIP are great examples. Customers collect points that can be redeemed for financial discounts or incredible perks. 

Playing to your strengths

When you have a clear idea of what you want from your loyalty programme, and the sorts of steps you’d like to take, it’s time to start planning! Remember to play to your strengths and improve upon the great work you’re already doing. Ask yourself: what else can we be doing for our customers? How can we take our customer experience to the next level? As long as you keep your audience in mind, you’ll avoid any potential pitfalls (such as positioning and ease of access) and be well on your way to building a broad base of loyal customers. 

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,