Small Business Brief


How Do You Create a Customer Loyalty Program? 10 Must-Know Tips

In the modern age, competition is steep for businesses of all sizes. This makes customer loyalty more important than ever–but also harder to attain.

Did you know that customer loyalty programs can increase the number of customers who stick with you for years by 30% or more?

Now that you do, the real question is, how do you create a customer loyalty program that will hold your customers’ attention? What incentives make it worth their time and what methods can you implement to get the best ROI?

Read on for 10 must-know tips to create a cutting edge customer loyalty program.

1. Research and Blueprint

Before you start coming up with ideas, you need to take the time to research your customers. Use things like website analytics, sales, and even conversations with customers to inform your understanding of their buying habits. What has already proven to work in the past?

Once you have this information, take the time to determine what you want to accomplish with your customer loyalty program. Do you want to encourage frequent purchases or big purchases? Do you want your customers to use their word-of-mouth power in your favor?

2. Don’t Overcomplicate Things

Chances are, most shoppers who sign up for your customer loyalty program are savvy shoppers. This isn’t their first rodeo!

While you want to be unique, you don’t want to deviate so far from the norm that your program is confusing. Generally, you want the model to be as simple as, “When you do this thing for us, we do this thing for you.” Anything involving too many steps is going to confuse–and repel–your customers. 

3. Embrace AI

Personalization and user-friendliness are key in this day and age. Both aspects of customer loyalty programs and other marketing tools increase the likelihood that sales will be completed. 

AI technology offers you a way to track your users’ data and come up with customized solutions faster. Pairing your app with their web or mobile browsers can generate leads on what they’re seeking out. This can enable you to advertise corresponding products directly to interested customers.

4. Stick to the Points Method

Remember what we said about not overcomplicating things? The best way to do that is to stick to the good ole’ points system.

Under the points system, your customers build up their points by shopping your products or services. The more they buy, the more points they get.

What you do with those points is up to you. It may entitle them to free gifts throughout the season or discounts. As long as they benefit from increasing your sales, you’re on the right track.

5. Maintain Contact

Don’t expect your customer loyalty program to do the talking for you! Make sure you continue to reach out to your customers in a variety of ways to grab their attention.

This is where standard marketing comes in. Send emails, blast sales on social media, and implement direct mail marketing. Keep in mind that the customers who have joined your customer loyalty program should hear from you more, not less, than everyone else.

6. Be Smart with Incentives

There is such a thing as over-incentivizing. If you start giving away too many products or offering large discounts, you can actually devalue your products.

Look at it this way. Incentives should encourage your customers to shop your products frequently and at full price in order to gain access to freebies, sales, and discounts. If you give away too much too fast, you’re creating an aversion to paying full price.

7. Don’t Forget Referrals

What’s one of the biggest reasons that loyal customers are of such high value? They refer you to their friends. For many people, that genuine, person-to-person referral is far more effective than the savviest of marketing schemes.

The best way to encourage referrals is to offer your participating members with a unique link or code to give to their friends and family. Every time this link or code is used upon checkout, they receive a reward. This can come in the form of points or merchandise.

8. Consider a Tiered Customer Loyalty Program

If you sell either high-demand or high-priced items, consider implementing a tiered loyalty program. This format rewards the most loyal customers with, well, more incentives! 

Note that this format doesn’t work as well if you don’t get a lot of large carts, either online or in stores. If people tend to spend a small amount of money at a time in your store, offering them increasing incentives with their purchases could hurt you more than it could help.

9. Market Your Customer Loyalty Program

So you’ve created a customer loyalty program. Now what? Tell people about it!

Use your social media and email marketing to inform people of this new and exciting option. Use push marketing in your online store and ask your sales clerks to mention the option upon checkout.

One way to provide an immediate incentive is to offer a discount upon signing up. In other words, let your customers know that if they sign up for your customer loyalty program before making their purchase, 10% will be taken off of their bill! 

10. How Do You Create a Customer Loyalty Program Without the Hassle? 

This probably sounds like a lot of work, and truthfully, it is. After all, Rome’s customer loyalty program wasn’t set up in a day!

That being said, there is a way to take all of the footwork out of the equation. Create an account with a custom rewards programs generator. They collect all of the relevant information you can provide and set up everything else for you!

Reward Your Customers and Reward Yourself

Hopefully, you’re no longer asking, “How do you create a customer loyalty program?” and instead, saying, “Sign me up!” Rewarding loyal customers is a great way to secure their loyalty and increase your sales for years to come.

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