5 Simple Steps to a Better Customer Loyalty Program
Getting your business to follow this action plan will go a long way towards building a loyalty program that your customers can appreciate .
According to recent studies, the majority of customer loyalty programs today lack research, thought and effort in implementation. Beyond designing a webpage, loyalty card and some promotions, many management teams simply ask customers to join, then offer enticements that the company “believes” will encourage loyalty and increase sales.

Without aligning your objectives to the customers’ needs and wants, these programs usually fail to deliver on expectations, both for you and your customers. SAS Insights, a publication of the respected analytical software and company,  released an action plan to address this situation based on the results of their commissioned research by the International Institute of Analytics (IIA) (The full report is titled “Keeping Customers: Successful Loyalty through Analytics.”)

This action plan advances principles based on strong evidence to build a loyalty program that delivers better results:

Step 1. Offer rewards that customers actually want.

To learn if your current loyalty program is giving offers that customers want, look at the number of active members in them. Are the numbers trending downhill? The likely answer is yes, according to research. If you think your offers benefit customers, but they don’t see it that way then your customers don’t have any incentive to remain loyal.

Researchers found that marketers underuse customer information in favor of a general approach. The survey results confirmed their hypothesis. Most businesses were not confident of their loyalty offerings because they don’t know their customers’ preferences with regard to their products/services, as well as they should.

For better success, you need to invest more effort in collecting and analyzing relevant customer information, then make use of that information to customize your offers.

Step 2: Measure your success.

It may surprise you to learn that around 45% of businesses don’t know how to measure their loyalty programs to see if they’re working. The first obstacle is identifying the right metrics to measure. The second is agreeing on what the best metric is. The IIA research says the top metric choice is customer retention, followed closely by customer satisfaction.

A good advice to consider for whichever one you choose – Don’t go overboard with offering such extravagant rewards trying to raise your scores that you begin to hurt your profits.

Step 3: Make your rewards special.

Most customers are members of several loyalty programs and, there’s often little to differentiate one from another. According to research findings, those that stand out are programs that bond customers with your brand. In fact, brand empathy is the top difference maker between customers choosing to remain and those opting out.

Here are some features that can make your program stand out:

  • Range of offerings. Effective programs offer more incentives.
  • Focus on rewards points – they are identified as a top attraction.
  • Exclusive discounts or sales. People like to feel they are members of a special group.
Step 4: Make use of all your marketing channels.

Customers expect to see your loyalty program in all your marketing channels, whether on your website, in-store, Facebook, print media or any other channel. 42% of businesses surveyed in this research identified this objective as one of their top challenges.

Every channel has a different way of communicating with customers, which adds to the difficulty of using each effectively. According to research, knowing how to communicate, how often and when to contact them with offers is critical to the success of your loyalty programs.

5. Make the effort to really connect with your customers.

It’s important to remember the power of emotion to develop loyalty. How your customers feel about your brand plays a big role. The challenge is to reconnect the delight that customers experience with your products or services, onto your marketing channels via effective communication.

You want them to remember the satisfaction they felt when they engage with your business. This is a key part of your brand message.

These 5 steps are simple in concept but a real challenge to execute. Getting your business to follow this action plan will go a long way towards building a customer loyalty program that delivers results, and can meet your expectations.