Dominating retail, airlines and financial services industries, loyalty programs are common practice. And for good reason: studies have shown it can cost a business anywhere from 5 to 25 times (Harvard Business Review) more to acquire a new customer than to retain an existing one.
But creating a loyalty program from scratch is a significant project. There are many factors to consider, and without a strong foundation your efforts may fall flat. Use the tips below to get started with a loyalty program that delivers tangible results.
Effective Rewards Programs – Top 10 Rules
1. Business Objectives are your foundation
Ask yourself what you are hoping to achieve here. Loyalty programs can benefit all types of business, but without a solid strategy you could be wasting precious time and money. Think about your wider business objectives, and set goals based on this. Focusing on the growth required, and dollar value that can be given back to your clients will set your foundation.
2. Build a unique experience
Create a unique program your customers will love. Focus on your unique product/service offering to offer benefits and rewards that align to your industry and brand. Creating a unique experience will not only influence behaviour but can create a lasting memory on your clients.
3. Ignore the data noise
With any new rewards program, a new breadth of data will emerge. With so many metrics at your disposal, it can be tempting to track and report on every single data point. Identify what is most important to your business and focus on only the things that matter.
4. Keep it simple
If you can’t explain your rewards program in four sentences you’ve gone too far. Keep it simple stupid. Set up a clear framework and make sure this is fully explained to all users so they understand how the system works and what benefits they can expect to receive.
5. Do your research
Offer the rewards your customers want and need. It’s a good idea to run a survey or poll to understand what would most benefit your customers. Allowing your customers to shape and build the rewards available will enable an extended level of interaction with your program.
6. Align to your brand
Value the things your brand values. For example, if your company prides itself on being environmentally conscious, offer double points on your most environmentally conscious products.
7. Make it omni-channel
Invest in ease for your customers. They should be able to buy products on mobile, desktop and in store, with a seamless experience throughout. Their rewards features should update as quickly as possible after every qualifying event and should be accessible from any device.
8. Serve Personalised Data
With new rewards and points data available in your business, serve your customers with insights into their points and rewards developments. Staying front of mind in your customers will enable them to get the most out of their program.
9. Test and learn
It’s extremely damaging to a company’s reputation to launch a loyalty program, only to shut it down a few months later. Identify a small group of beta users, test your program and adapt it based on any issues that are identified. Don’t release the full version until you are confident it can operate without a hitch.
10. Optimize constantly
Creating a rewards program isn’t a one-and-done activity. Continue to monitor engagement levels and new sign-ups to see which aspects are performing well, and cut back on areas that aren’t delivering results.
When planned and implemented correctly, loyalty programs can be a huge tool in improving the profitability of an organization. No matter the size or sector of your business, there’s a system that can work to increase profitability and encourage loyal consumers.