Loyalty Program Do’s and Dont’s

BY Lucy Fang
Mar 16, 2016
Analytics, Brand, brand-to-customer relationship, Customer Engagement, Customer Incentives, Gamification, instant gratification, loyalty program, millennial, mobile

When it comes to loyalty programs, companies are struggling to figure out what works and what doesn’t to inspire loyalty in customers for their brands.

Customer incentives have never been harder to define. According to a recent study from Experian, three out of four (75%) U.S. companies with loyalty programs generate a return on investment. This clearly shows a benefit for most companies who spend money on loyalty programs.

There is no denying that loyal customers are more profitable than acquiring new customers time and time again. Actually, according to Experian, 69 percent of U.S. companies with loyalty programs track the lifetime value of each customer for an average value of $1,803.

However, getting to the point of customers returning time and time again to shop with their favorite brand is easier said than done. Should brands offer fuel rewards? Or would points off groceries work better?

Marketers have to get customers involved and eventually have them advocate for their brands by sharing products on social media and referrals! Below is the ultimate marketer’s list of do’s and dont’s of loyalty programs.

Do set a goal for the consumer

Customer goal setting is beneficial for setting either a timeline or a call-to-action. This can be done through the use of coupons or special offers. Offering an incentive with a timeline places urgency on the action and has a higher rate of engagement for consumers than simple messaging alone.

Don’t view loyalty as purely transactional

Inspiring customer loyalty is much more than making a sale. It is selling a positive experience and taking the time to develop a brand-to-customer relationship. Building a positive relationship shows the customer that the company is willing to go the extra mile and put in the effort to develop a positive customer (overall) experience.

Do make the rewards regular

Customer rewards should not be sporadic or offered on rare occasions. Customer incentives do cost the company but can be cost efficient based on the higher frequency of sales that loyal customers will be making. Make rewards regular such as coupons, sales, or even rewards for spending a certain amount with the company regularly.

Don’t fear privacy backlash

As loyal customers repeatedly return, marketing tactics are necessary to continue the customer relationship. These tactics include email marketing, SMS marketing, and even asking for customer opinions through surveys and feedback. Customers oftentimes feel invaded but willingly offer their personal information for discounts and deals. Do not fear the privacy backlash. This is a common issue in the digital information age.

Do make the rewards compelling

When choosing a customer incentive or reward, be cautious of what you choose. Every aspect of marketing sends a message. So make your incentives send a message to your customers. Choose a reward that will help them accomplish a task or to help them save time or money.

Don’t make it too complicated

Customer incentives should not take your customers through hoops. Don’t make the campaign or promotion too complicated; be sure to offer proper directions for consumers to follow and earn their rewards easily.

Do make your program mobile

Nearly 51% of online visitors are using their mobile devices to search and shop. Mobile users receive their information quicker and engage in brand content four times more than non-mobile users. Mobile devices include Smartphones and Tablets.

Don’t be misleading

Brands in the millennial era are transparent and honest. Do not be misleading with your products or services. Customer loyalty can be tricky. But, it is imperative that your advertising is honest for your customer’s sake and your own.

Do make it easy

Simplify your loyalty program so your customers get instant gratification and rewards as soon as possible. Customers do not want to jump through hoops. If the process is not simple to redeem rewards, they will give up even if they are halfway through. Make your loyalty program worth your customer’s time and efforts.

Do advertise your loyalty program

Advertising boosts viewers and increases customer engagement. Definitely advertise your loyalty program. However, make sure you are 100% honest and open about the program. Do not advertise benefits that are not truly in your loyalty program.

Don’t just set it and forget it

Keep an eye on your efforts. Track your results with analytics and learn how to improve with each step of the process.

Do measure the program

With the help of analytics, you will create a better loyalty program over a longer period of time. See the good and bad consequences of your efforts, take note, and retry. It is tedious but extremely rewarding once you find the perfect customer service recipe.

Do select a system that is flexible

When building your program, select a system that can be changed easily with the ever-changing internet. There will be continuous changes throughout time. Find a platform that will easily change with those times.

Do make it fun

Make your loyalty program fun and give your customer a positive experience. Include elements of Gamification to draw your customers in and get them to refer their close friends and family.

Don’t give up

Creating a loyalty program is hard work! Let All Digital Rewards partner with you to build your business brand and increase your customer engagement.