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8 Best Practices for Customer Loyalty Programs

Marta Sobolewska
April 19, 2022
Happy worker at POS

A loyal customer is a dream of a lot of companies. But, how many of them have a carefully considered strategy that can lead to achieving it?

A well-managed loyalty program is an entire ecosystem of complex activities, knowledge, and experience. Thanks to it, it's possible to build valuable relationships that satisfy both businesses and customers.

This article will show you eight best practices you should consider when building a customer loyalty program.

1. Define your customers' challenges

Describe your potential customers and both their dreams & challenges. What are their needs (explicit and profound)? How does your product or service solve their problems?

Remember about the behavioral economy and heuristics. Keep in mind that you may be wrong if you draw your conclusions from assumptions, not data.

2. Monitor data

Monitor data and verify its correctness. The best solution is to integrate it into a cohesive data warehouse. This way, you'll avoid discrepancies and deviations.

Notice that personal, transactional, and behavioral data come from many channels. Remember about monitoring interactions with customers from different sources, including your website and social media channels.

Only data integrated into a single base will allow you to turn it into useful knowledge and make rational decisions.

3. Measure results

Define your key metrics - things that are truly worth measuring. Organized data described by metrics will help you build your scoring models and recommendation systems.

Also, pick control groups that will enable you to observe significant differences in results and do A/B testing.

Be up to date with the results and communicate them in clear presentations to help your coworkers understand decisions and plans. Consider unifying your approach to reporting indicators and standardizing mathematical definitions between teams.

Measurable marketing will allow you to focus on cost- and time-optimized actions.

4. Listen

Stop holding a monologue with your customers. Instead, listen to what they say about you on social media. What problems do they face? What do they really need?

Follow the trends and innovative solutions. Let your customers talk to you with their preferred channels, not yours - even if it's WhatsApp.

5. Communicate

Communicate accordingly to your company's values. Think about what archetypes are in your organization's DNA. Then, build a loyal community that aligns with those values.

Make your customers feel noticed and appreciated. Observe their reactions, dispel doubts, give advice, inspire, and make their lives easier.

What can you use? There are many options: welcome emails, birthday messages, push notifications using geolocation, SMS campaigns integrated with surveys, cross-channel campaigns, video tutorials, newsletters informing about launches/preorders, and more.

Also, think about using personalized triggers based on machine learning to maintain valuable communication, not SPAM.

6. Get them involved

Invite your customers to become a part of a bigger community. Enable them to unite around a socially-important goal (e.g., CSR campaigns). You can inspire them with a series of vlogs, webinars, podcasts.

Introduce play elements into your loyalty program (e.g., gamification). Cooperating with influencers and brand ambassadors who share your values can be very effective.

Make it as easy as possible to help your customer get involved. Your onboarding should be straightforward and take little time to join your program.

7. Automate

Evaluate what actions you do daily, periodical, and ad-hoc. Which ones take the most time? You can automate monitoring, reporting, and even communication.

Use recommendation engines and available tools. Let the software automate what's possible so your team can spend time doing creative and strategic work. Marketing automation can unlock your superpow

8. Audit resources

Analyze who and what you have in your company. Who or what is missing? Is it better to do it in-house, or should you outsource?

Consider the following areas: processes, people, data warehouse & maintenance, loyalty program management, reporting & analytics, presentation, hardware, software.

Summing up

Does it sound like a lot of work? It may surprise you, but loyalty programs aren't just about collecting points to save some money.

It's essential to map the entire ecosystem of dependencies and design a solid foundation for your customer relations. Your future self will thank you for this.

And if you need some help, we'd be happy to hear about your challenges and work out together the best solution.

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