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The dos and don’ts of loyalty programs

Successfully used by quite a few companies, customer loyalty programs are part of most consumers’ everyday life. According to Bond Brand Loyalty, the average Canadian actively participates in a total of 8 loyalty programs, which is far from negligible.

That being said, not all programs are created equal. Differentiating yourself and better investing in your loyalty efforts requires a high-performance, attractive and profitable program. But how do you achieve this?

Here’s what to do and, most importantly, what not to do to inspire long-term loyalty with your customer base.

Creating customer loyalty: 5 things to do

1. Do create a program that meets the needs of your customers | Loyalty programs

Put yourself in the customer’s shoes when creating your program. This will allow you to better meet their needs and expectations. Don’t hesitate to dig a little deeper by researching consumer interests or by conducting a customer survey in a bid to collect even more information.

2. Do bank on data | Loyalty programs

Data is gold when it comes to loyalty. Leverage the data on hand to increase your customer knowledge and personalize the user experience. Using data enables you to adapt your program and improve your loyalty offers.

Don’t underestimate what loyalty data allows beyond loyalty! Armed with his knowledge, you will be able to make better decisions about how to market your products. It’s also a great tool for conducting tests with your qualified customers.

3. Do monitor your results | Loyalty programs

Look closely at the test results with your customers. Loyalty constantly shifts and evolves to meet customer needs. To be successful in your endeavours, you need to identify your goals from the start before tracking the KPIs and readjusting as needed. Follow up by adapting your KPIs according to the program’s evolution and maturity, depending on whether it is in its launch phase or at full maturity.

4. Do develop a culture: put the program at the heart of your business | Loyalty programs

Loyalty solutions must embody brand values. Don’t forget, people are buying the brand, not the program itself. A rewards program is a tool to convey brand values ​​and create value for customers through rewards. For this, the identity of the program and its unique selling proposition must align with the brand itself.

5. Do reward commitment, not just purchases | Loyalty programs

Loyalty is far more than just a plastic card one takes out when paying. Loyalty allows you to connect with your customers on various channels where they want to be acknowledged for their commitment to the brand. Giving them this emotional rather than transactional recognition requires thinking outside the box. For instance, include incentives for them to join or participate more actively on social media or via online product reviews.

Maintaining customer loyalty: 5 things to avoid

1. Don’t make rewards too hard to get | Loyalty programs

Avoid putting too many restrictive conditions. Focus instead on encouraging customers to exchange and use their rewards. Using rewards ultimately stimulates customer engagement and satisfaction. Bond Brand Loyalty notes a 1.6-fold increase in the satisfaction rate among customers who redeem rewards versus those who do not.

2. Don’t forget about your employees | Loyalty programs

Your employees are your greatest brand ambassadors. To better include them in the process, implement a training plan, measure performance and set clear loyalty goals. Invite employees to take part in the program and offer them specific benefits or an employee bonus.

Benefits like employee discounts can even be turned into discounts through the program. Review the benefits offered to employees when the program is first launched so that they may participate. Ultimately, employees sell the program better if they are actively involved.

3. Don’t make the program too complicated | Loyalty programs

Keeping it simple is often the best option for the customer. This means avoiding a complicated or very long membership process. Also to be avoided are excessive restrictions on earning points, such as exclusions that do not award points. Try as much as possible to include everything while respecting regulatory constraints.

In the same manner, avoid restricting the use of points by making the redemption thresholds unattainable, by excluding too many ineligible items, by making the redemption process more complex (forcing the customer to go online, redeem a coupon, print it and redeem in store, etc.) or, on the contrary, by favouring payment by points and redeeming rewards directly online or at the point of sale.

4. Don’t copy competitor programs | Loyalty programs

No one likes a copycat. Create a program that reflects the values ​​of your business. A loyalty rewards program is an opportunity to set yourself apart from your competitors and offer a more personalized experience to your customers. Why not offer experiential rewards, for example, to offer experiences that your competitor has yet to offer?

5. Don’t sit back and do nothing | Loyalty programs

Being passive and not doing anything won’t get you anywhere. You can’t generate customer loyalty simply by offering a points program without properly maintaining it. It’s essential to analyze the data and adjust as needed along the way.

When setting up and managing the program, plan a budget for rewards or promotional points so that you may run it throughout the year. You can also schedule special promotions for your top customers, for new customers or for customers who aren’t redeeming as much as they used to, for example. Finally, make sure you constantly motivate and train your employees to better achieve your goals.

When it comes to customer loyalty, being proactive rather than reactive is the name of the game. Don’t be afraid to innovate! For starters, why not incorporate new features in your existing rewards program to continue surprising and engaging your customers? Your success will be measured in terms of your customers’ level of satisfaction.

Are you thinking of launching or reviewing a customer loyalty program in light of these tips? Our loyalty experts provide strategic and operational support to companies who want to stand out. Contact us for more information.