November 18, 2016 | Categories: business Back to list

Creating A Loyalty Program That Actually Adds Value

Creating A Loyalty Program That Actually Adds Value

As a merchant, introducing a loyalty program can be one of the best ways to reward your customers for their support. When implemented properly, a loyalty program enables you to develop a deeper understanding of customer behaviors. It also has the potential to make a significant impact on your profits, and it can help with branding too.

A further benefit of loyalty programs is they tend to work well across all niches, so no matter what retail business you are in, a loyalty card scheme could bolster your company’s reputation.

Another reason why you might want to consider introducing a loyalty card is their continued popularity among consumers. Membership of loyalty programs is on the increase, according to the latest figures from Colloquy. On average, householders in the United States are a member of 29 different schemes on average, but they are only active in 12 of them. So how do you make yours stand out?

Understanding What Your Customers Want

If you are considering launching a membership program, begin by speaking to the people that matter the most: your customers. Everyone with have their differing opinions of what makes a good loyalty program and by asking a broad range of your current consumers you’ll gain a consensus of the preferred options.

Make sure you establish the type of rewards your customers would find attractive. Many consumers like a points program that gives them awards for products that they would buy anyway, or they might prefer having something to aim for, like a tier program that offers greater rewards the more active they are. When you’ve garnered enough opinions, you are ready to start developing a strategy.

Develop a Solid Plan

What do you want to achieve from your loyalty card scheme? Is it purely to encourage customer loyalty from your existing consumer base, or do you want to use it as means of reaching out to new customers? Do you want customers to keep coming back for more, introduce friends, spend more when they are in store or offer discounts and cashback on the items your customers purchase most often?

Your answers to these questions will help to determine how your specific program should be set up. For example, if you want to encourage bigger spends, you might want to offer discounts when a customer spends over a certain amount, like $2 off a purchase over $20 and $5 off a $50 purchase

Remember to Keep It Simple

The more complex your scheme is, the less consumers are likely to use it, so keep it simple; the most popular method among businesses is a points system. Offering points for each dollar spent, or a small discount when a consumer accumulates a set amount of points is the easiest method, and it’s clear to your customer.

By starting with a simple structure, it is easier to refine it as you go, and it is easier to take on board any changes that might be necessary as the scheme becomes more established. Limit the roll out of the program so you can spot any potential teething problems, and learn from your customers.

Once you have the basics up and running, you can begin to add some tiers if you wish or implement other features – but don’t make it too complex for consumers. When you are introducing changes, bring them in one stage at a time so you can see how it works and how the customer responds. Always seek feedback when new changes are made – if something doesn’t work, then tweak it and try again.

Running Your Loyalty Program

The software you use needn’t be too elaborate, but you will need to be able to measure the basis metrics and use the data from the program to gain insights into consumers’ behaviors and preferences so you can personalize offers to them. Select a software program that offers a high degree of customization so you have the flexibility you need; this is especially important if you want the ability to send out promotions, or send birthday/ anniversary announcements/vouchers to your customers.

Remember that your loyalty program should always be evolving. Use the data recorded to monitor the results and review its progress. Is it helping you achieve the aims you set out for your business and benefiting your consumers? Get feedback from users. Establish the changes your customers want to see and deliver them – it shows your listening, and this means a lot these days, especially when the retail experience has become so automated and impersonal.

Make It Personal

As this Retail TouchPoints article makes clear, a core part of your loyalty program should be about building relationships with your customers, rather than the loyalty points themselves. Make sure that the programs give the consumer value and that it is personalized to their needs. For instance, as a retail store, you could offer a small discount or extra points for products a customer regular buys.

Launching and Marketing

With your loyalty program set up and ready to go, you need to start getting the word out. However, don’t promote it too heavily to begin with – beta test it among a small group to make sure that everything works as it should, and the customers are getting email notifications when they sign up.

If you have a physical business, engage with your consumers to create a buzz, and start building sign ups and developing an interest before the official launch. Above all, make sure your customers are clear on the offer: customers need to know the advantages from the start and how it applies to their lifestyle.

Once the scheme is established, use social media and your existing email list to start getting the word out to a wider audience. As you begin your marketing efforts, make full use of sites like Facebook and Twitter to engage with customers, get their instant feedback and to find out what they like/don’t like about a program.


When implemented properly, a loyalty program can have immense benefits for your retail business. It can increase profits and help to build all-important relationships that are crucial to your company’s success. However, it is important to start with a clear objective and once you know what you want to achieve, put your plan into place to start achieving it.

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