Customer loyalty programs are designed to keep your customers coming back to you rather than heading to the competition. There are many different ways to implement a customer loyalty program, with benefits both to the customer and the business.
Before starting a customer loyalty program, there are a few things to consider. How will you encourage your customers to join? Is your approach worth the time and effort? Here are some helpful tips for implementing a customer loyalty program.
Consider Your Approach
Think of which execution method makes the most sense based on the product or service you offer. If you’re a consultant, for example, it may make the most sense to offer a straight discount once a client has reached a certain expense threshold within a given time period. If you have a coffee shop, you might look at various punch card examples to keep clients happy.
There’s no one approach that’s better than another; it will all depend on your business model and what you hope to accomplish. Look at the various options, from building an affiliate network to developing an app, and see what works for you.
Set Definitive Goals
It’s important that all decisions made within a business have a strategic purpose. Sure, the point of a loyalty program is to encourage customers to come back, but it’s only a small part of what will bring customers to your door. Additionally, there needs to be a set of measurements in place to determine if the effort that goes into maintaining a loyalty program is worth it. If your loyalty program is ultimately losing you more money than it’s gaining, it’s not a worthy venture.
Set goals surrounding the use of the loyalty program. What increase in business would you like to see after its implementation? What is the threshold on offering a perk in relation to your margins and profitability? Setting goals sets you up to have an evaluation period to determine the effectiveness of a program.
Evaluate and Re-Evaluate
Once you know which metrics you’re collecting, be sure to revisit them often. A loyalty program that makes sense one year may not make sense five years later due to inflation rates or the changing competitive market.
Evaluate if the loyalty program is effective. Is it bringing customers back time and time again or are they tapering off after a brief usage period? It’s important to look at how you’re adding value to the program to encourage engagement with your customers. If you don’t know what your customers want, ask them with a simple survey. Most customers are more than willing to share their thoughts if they believe it will improve the value of their expenses.
Don’t Rely on the Program
Many businesses make the mistake of relying solely on their customer loyalty program rather than looking at the other areas of customer relationship management (CRM). A customer loyalty program is meant to get customers through the door; great business practices is what will keep them coming back.
Businesses should take the time to get to know their best customers and treat them like humans, rather than a number on a membership card. Depending on the nature of the business, this could mean hosting special events for loyal customers or using targeted marketing campaigns that encourage mid-line customers to become more engaged with the organization.
Remember Your USP
The customer loyalty program you use should be a medium for your core USP (unique selling proposition). It should be a continuation of what sets you apart from your competition. If it’s not in alignment with the USP and the core brand strategy, the loyalty program will fall flat. A customer loyalty program should be a reward for your customer’s loyalty, not something that they’ll take advantage of until the competition comes up with a program of their own.
By taking a strategic approach to implementing a customer loyalty program, you can create a special bond and rapport with your customers that will keep them coming back for more.
