Top 8 Best Practices for any meaningful Loyalty Program
Loyalty programs are a great tool to influence sales and build brand awareness and adoption, however these programs can be hard to create – delivering quality to your returning customers and standing out to new customers.
We have outlined the top 8 best practices – both internal and external driven – when creating a meaningful loyalty program for your business and your customers.
Internal Best Practice 1: Make Sure a Loyalty Program is Right for Your Business.
Loyalty programs are hard to create and they are hard work therefore it’s important to take a few factors into consideration before creating your own program to know if it is right for your business. Do you offer goods or service that consumers willingly purchase on at least a semi-regular basis? If so, you have the right goods and services to encourage repeatable sales and create a meaningful loyalty program, Are your offerings similar to those of your competitors? If so, you have an incentive to differentiate using a loyalty program.
Internal Best Practice 2: Determine What Your Motivator is for Your Loyalty Program
There are four main benefits in creating a loyalty program for your business: gaining new customers, increasing your returning customers’ spending, retaining more of your new customers, and guiding customers toward higher margin products. You can choose to focus on one or several of these benefits, but just make sure to identify what your motivator is, then align your goals prior to designing and launching your loyalty program.
Internal Best Practice 3: Know and Understand your Customers – Not Every Customer is Created Equal
Take a good look at your current customer base and perform an analysis —meaningful loyalty programs create segments, targeting customers and providing them with the best services and rewards. There are typically four segments your customers will fit into.
Lead: These customers are plentiful, but they are likely to cost your business more money than they are worth. Focus your attention on the other customer segments.
Iron: These customers are infrequent, cost-conscious buyers. They may not cost your business money, and they may make up regular part of your revenue; additionally, they have the potential to transition into the next segment.
Gold: These customers are frequent purchasers, less sensitive to pricing. They deserve the most of your attentions and focus and will tend to generate the most revenue for your business.
Platinum: These customers are highly frequent purchasers and do not care about price. They are few and far between, but both platinum and gold segment members tend to be motivated by lifestyle and status perks, rather than discount based incentives.
Internal Best Practice 4: Pick the Right Strategy for Your Business and Your Customers
Knowing your goals and your customer segments, make sure you choose the right components for your loyalty programs. There are many options to choose from, but the most popular are: flat discounts offered to all customers, buy x get y free offers, tiered rewards, and personalized offers based on customer shopping habits. Truly meaningful loyalty programs match their methodologies to their customer segments.
External Best Practice #1: Make Signing Up to Your Loyalty Program Easy
Nothing is worse than a long and drawn out process to sign up for anything – including loyalty programs. Signing up to your program should be user focused, seamless, and easy to do and include post sign-up contact/confirmation immediately. There’s not much worse than struggling to sign up to a program and then wondering if you’ve completed the process!
External Best Practice #2: Build a Relationship Not a Promotional Channel
Financial rewards is a large driver for implementing a loyalty program, however your program should go beyond that. A large percentage of your customers see loyalty programs as a way to build a relationship with or is part of the relationship with a brand / your business. Part of participating in a loyalty program is buying into your business / brand and your values. There is a strong connection between a customer’s satisfactions in a loyalty program when the brand demonstrates it is aligned and committed to their personal values. Demonstrate these values when you communicate and interact with your consumer.
External Best Practice #3: Communicate Often and Well
A foundation of any good relationship is communication. Members of loyalty programs want to receive and expect communications from their programs. The key to not becoming a spam-brand is to be relevant and timely with your communications to your customers.
External Best Practice #4: Live Up to Consumer Expectations
A good and meaningful loyalty program is nothing if you don’t live up to your consumers expectations and have top quality services or goods. The thing with loyalty programs – you can gain your customers attention and loyalty, but if your product isn’t up to scratch you will lose them!
NextBee enables you to build an army of loyal customers who are as excited about your brand as you are! Contact Us Today to learn more about our platform to create a top quality loyalty program.