Zsuzsa Kecsmar is the Chief Strategy Officer of Antavo Enterprise Loyalty Cloud, a top loyalty technology vendor.
Customer loyalty feels more elusive than ever before—yet it’s never been so crucial for businesses. Across industries, companies are on a constant search for strategies that promote sustainability and growth. The key to success lies in retaining existing customers.
One powerful tool at your disposal is a loyalty program. However, to create a successful loyalty program that moves the KPIs your business needs, there are many things to consider before choosing your loyalty technology and beginning the implementation. That’s why it’s wise to invest your time upfront in the planning phase, so there won’t be any timeline- or budget-breaking surprises. Once you have a solid concept for your loyalty program, everything else, from vendor selection to implementation, can run more smoothly.
While there are many details to consider while building a loyalty program concept, here are some of the best practices and considerations to help you craft a successful loyalty program. These go beyond the more obvious point systems and program structure, drawing insights I’ve learned from working with loyalty technology for over 12 years.
Mapping Out The Member Journey
Knowing how customers will interact with the loyalty program from start to finish is important. While enrollment and opt-out seem like relatively small details, it’s actually worth planning these processes early on. Consider what steps customers will need to take to sign up, what kind of information they’ll need to share, and on what channels they’ll be able to complete registration. (In your stores? On your mobile app?)
Equally as important is account deletion. Making opt-out straightforward is to the benefit of your customers. Even though this step won’t be a first impression, it’s still important to let customers go without souring their opt-out experience. Ask for feedback so members can tell you why they’re leaving. This may serve as a key source of information for improving your loyalty program later on.
Data-Driven Personalization
A successful loyalty program begins with personalization. Personalization affects everything from communications to the benefits and rewards offered. Brands that don’t want a one-size-fits-all program benefit greatly from offering the right perks to the right audiences.
To do so, they must analyze customer data, including purchase history, browsing behavior, and demographics. This helps businesses segment their customers effectively and offer incentives that resonate with each group. Making data and segmentation a part of the concept discussion helps ensure you’re building your loyalty program in a way that will help you achieve your data goals.
For instance, retailers might offer exclusive discounts on new products to segments of customers who are historically bargain hunters. Meanwhile, they might provide early access to a sale for their most loyal members who are interested in exclusive experiences and want to feel unique and valued by the brand. By customizing rewards and experiences, brands can create a sense of exclusivity and relevance, enhancing customer loyalty.
Experiential Rewards
While we’re on the topic of choosing rewards, let’s talk more about experiential rewards—a flexible yet unique kind of reward that can work for most industries. The heyday of simple points programs and discounts has gone. Customers expect much more today. That’s why I believe all businesses should consider offering experiential rewards. These rewards go beyond traditional discounts and merchandise to delivering unique and memorable experiences.
Experiential rewards can leave a lasting impression and forge emotional connections with customers. Let’s take a travel agency for example. The agency could reward loyal customers with an exclusive guided tour at a popular landmark where the customer plans to travel. This type of reward encourages continued patronage and creates brand advocates who share their positive experiences with others. (By the way, partner rewards are a great way to make this happen cost-effectively.)
Transparent Communication
Transparency is a cornerstone of trust-building in any relationship, including between a brand and its customers. Loyalty programs should communicate clearly about the program’s terms and conditions, as well as how rewards can be earned and redeemed.
Moreover, brands should provide ongoing updates about the program and any changes that may occur. Open and honest communication instills confidence in customers and ensures they feel valued and respected. Ensure communication is discussed early on as you build your loyalty program concept.
Seamless Omni-Channel Integration
You already know it’s a digital world where customers interact with brands across multiple channels—brick-and-mortar stores, websites, mobile apps, social media and more. A successful loyalty program seamlessly integrates across these channels to offer a consistent experience.
Omni-channel loyalty programs allow customers to earn and redeem rewards both online and offline. This flexibility not only enhances convenience but also encourages engagement across various touchpoints.
Best practices for a loyalty program include carefully considering what channels customers can register for the program on, the exact steps they’ll need to take (including information they’ll need to provide), and considering which channels members can engage with the program once they’re enrolled. Which channels will allow them to earn points? Where can they use their rewards?
Final Thoughts
In an era where customer loyalty is the lifeblood of business success, loyalty programs have become indispensable tools in nurturing customers’ relationships with brands. However, not all programs are equally effective. Success starts in the planning stage, and investing your resources up-front will lead to a much smoother implementation process later on.
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