9 Loyalty Program Best Practices

Every brand should have some form of a loyalty strategy. Whether it is providing points with every purchase, specific promotions geared toward only loyalty members, or something simple like immediate cash back, every marketing strategy benefits when loyalty is encouraged. Far too often the goal of marketing is to get new customers. Loyalty helps bring those customers back.

These best practices have been developed over time because they have been proven to enhance the experience for everyone involved. If you’re thinking about starting your own loyalty program, then be sure to keep the following ideas in mind as you design it.

1. Different Levels, Different Rewards

Not every customer has the same spending habits. What incentive does a customer have if they get the same rewards for buying 100 items that another customer receives for buying just 2 items? Incorporate different levels of status within the loyalty program and enhance the rewards received at each level. Your best customers want and deserve to be recognized. This helps to accomplish that.

2. Keep It Simple

A complex system of rewards is confusing and will ultimately drive customers away. Keep things simple and consistent. Whether people earn badges, points, or even specific titles, the equity in the loyalty program should be easy to understand and then act upon.

3. Reward Engagement

Loyalty programs should include more than just an incentive to buy more stuff. Reward your customers who engage with your brand in some way. There really is no limit to the possibilities here. Visits to your website, taking a phone survey, and referring other customers to you are all ways that people will interact with you. Reward them for that and they’ll keep coming back.

4. Make It Unlimited

The only thing that is better than something that is completely free is a free item that has been earned through specific behavior. People like to win. When a loyalty program offers unlimited rewards for specific actions, then there will be people who will become a brand ambassador for you without hesitation. Just make sure the reward is worth the effort that the customer is making. Working hard for 3 months to become a #1 provider of referrals is worth more than just a 20% discount on a future purchase, right?

5. Go Mobile

If you haven’t taken your loyalty program mobile yet, then today is the day to do it. The benefit of being on tablets and smartphones is that your brand strategy can speak to customers and prospects on a continual basis. Consider offering rewards for mobile engagement to get people used to using the platform and then offer mobile specific rewards that are behaviorally based so you can see a boost in sales.

6. Create Excitement

Some components of your loyalty program should only be for a limited time. There should be consistency within a program, such as always receiving 1% cash back on every purchase. Then there should be limited time promotions that help to create more excitement and inspire more sales. In this example, consider having 5% cash back on fuel during one quarter, then 5% cash back on groceries another quarter.

7. Stay In Contact

Loyalty programs need to have a certain level of human contact associated with them to be successful. You can setup an automatic program that triggers an interaction between the customer and your staff after specific actions are taken. If a customer reaches your highest tier during the year, for example, a quick phone call to provide a personal thank you can further secure the relationship foundation and even potentially create more sales.

8. Make It Competitive

People will only compete with themselves for so long. Not everyone is inspired by achieving a personal best in a loyalty program. Competing against others, however, can actually change spending habits. If someone knows they only need to spend $86 to reach your #1 spot will cause someone to spend $120 because they’ll want some distance between them and #2. Publish occasional results and watch people scramble to become a top brand ambassador.

9. Give It a Boost

Even the best loyalty programs grow stale over time. Give a program a good boost by having games, in-store events, or partnership deals that will let members realize even more value. Not only does this freshen up the program and encourage more participation, but it will also increase your brand exposure throughout any partnerships you form.

Loyalty programs are an effective way to create more revenues from your existing customer base. Include these best practices with your program and you will begin to see immediate results.

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