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11 Ways to Make Your Loyalty Program Work for You

Posted by Tasnim Ahmed

August 5, 2020

Keeping your customers on board can be quite challenging in this competitive world. Businesses should have effective and innovative customer loyalty programs if they want to increase engagement and retention. Many companies are also using loyalty programs to boost their marketing and customer service programs, since these platforms can bring referrals through social sharing or positive reviews. But many companies don’t know where to start when building theirs. The following strategies can help you develop an effective loyalty program to achieve the best ROI.

1. Analyze Customer Buying Habits

A customer loyalty program is comprised of a set of strategies for rewarding customers based on their purchases. Having a clear objective of your business goals and knowing your target customers can help you create an innovative loyalty program. Start with analyzing your customers’ buying patterns so you can find effective loyalty programs for them.

Gather your customers’ data from a variety of sources, like your website analytics, sales, customer satisfaction surveys, past conversations, etc. Use these data-driven insights to design your customer loyalty program and improve your products or services to deliver excellent customer service.

2. Create an Easy-to-Use Points System

Your customer loyalty program should reflect the needs of modern customers. Make your rewards system easy to join, understand and track. Give out points to customers based on their purchases, and explain how they can redeem those earned points, whether or not those points expire, and if so, when. Also, provide your customers with points for referring new people to your program and for encouraging others to follow you on social media. The reward points can help your business generate long-term loyalty in your customers.

3. Choose a Name with Deeper Meaning

The name of the program should be unique enough to prompt curiosity and interest in participating. Your name should allow people to understand the benefits of your loyalty program to make it as compelling as possible.

4. Build a Multi-Channel Loyalty Program

Customer loyalty is typically a result of a good customer experience. Consumers will often pay more for a guaranteed good experience. Therefore, if you want your customer loyalty program to be more effective, deliver a seamless, user-friendly, multi-channel experience, be it on the web, mobile or in a brick and mortar store. Try to resolve customers’ issues during the first interaction, and offer a frictionless payment experience to customers across all platforms.

Having an omnichannel loyalty program is one of the best ways to stay connected with your customers, especially when they need help. It can boost business, allowing customers to engage across different channels. It can help customers receive incentives for purchasing items in stores or posting favorable reviews on social media. Brands should ensure that their loyalty program will operate seamlessly regardless of the channels through which they interact.

5. Embrace Technology for Personalized Offerings

Technology helps you record customers’ past experiences with your brand, like emails, calls and messages, to create a more personalized journey. This helps you customize products or services with multifaceted content and descriptions based on customers’ expectations and behavior, as well as current market trends.

Many brands personalize experiences with the help of visual engagement tools. Another great way of connecting with your customers is through live chat enabled on your website or app. For smaller teams, artificial intelligence software like chatbots can relieve the workload of organizing and distributing incoming requests. You can also use email automation tools to deliver large numbers of emails efficiently.

6. Adopt Affiliate Partnerships

Explore partnerships to provide customers with more compelling offers. You can forge affiliations with other businesses to create offers that benefit you, your partner and your shared customers. For example, many grocery stores partner with fuel companies to offer discounts on gas based on past grocery purchases.

7. Inform Via Messaging Campaigns

Using email and messaging campaigns to let your customers know about special offers can make your program work better. Experian data shows emails targeted toward your loyalty program participants have 40 percent higher open rates, 22 percent higher click-through rates, 29 percent higher transaction rates, and 11 percent more revenue per email.

8. Market the Program

No matter how effective your customer loyalty program is, unless your customers know about it, it’s not going to get you very far. Invest in marketing so your customers are aware of your loyalty program, and make sure you create a marketing strategy that fits with your business' needs. You might consider online and newspaper ads, social media, press releases, in-store signage, and/or an email newsletter.

9. Set Up Exclusive Deals and Discounts

Businesses can find ways to reward their customers for their loyalty, irrespective of their industry. Your social media followers and email subscribers are all potential customers. Use a unique hashtag for providing offers to your social media customers. Utilize social media and email newsletters to give your followers exciting and exclusive limited-time deals and discounts.

10. Share Positive Customer Experiences

Customers are driven by their own goals and will be loyal to the company that can best fulfill their needs. Gather positive customer experiences or feedback, and share those reviews to inform others about the benefits that your company can provide. Broadcast these stories across all your communication platforms.

Customers tend to trust other customers' reviews more than your advertising, so it's important to leverage your positive reviews to maximize your brand value. You can also encourage customers to share testimonials, which can then be uploaded to your website for other leads to see. If your customers enjoy the benefits of your loyalty program, they can also refer their friends and family — which can generate revenue for your business.

11. Incentivize Customers with Valuable Rewards and Gifts

Whether you choose to offer discounts on future purchases, free rewards or gifts, the rewards should provide value to the customer and make financial sense for your business. To find the most appropriate incentives for your loyalty program, analyze the needs and purchasing behaviors of your target customers. Simple service prioritization methods can also add value for your loyal customers.

Loyalty programs can encourage customers to continue purchasing from you while maintaining long-term relationships. Another way to provide more value to your loyal customers than just discounts is to offer different rewards. You can reward a variety of customer actions as follows:

  • Incentivizing reviews and ratings on websites and social media can result in authentic user-generated content from customers.
  • Rewarding points to customers for a variety of different actions — like reading, replying or subscribing to your blog posts, watching product videos, or following and sharing social media content — can help boost engagement.
  • Free trials are also a type of incentive used to convert potential leads, but they can also be utilized as rewards programs.
  • You can incentivize customers for referrals to expose your brand to new potential customers. Develop a rewards program that mutually benefits both the company and the customer.

Customer loyalty programs can help you keep customers engaged with your business beyond just the point of purchase, subsequently boosting profit. Implementing the right loyalty program for your customers and managing it well can ensure long-lasting success for your business and better customer retention.


Tasnim Ahmed
Tasnim Ahmed

Tasnim Ahmed is a content writer at Escalon Business Services who enjoys writing on a multitude of subjects that include finops, peopleops, risk management, entrepreneurship, VC and startup culture. Based in Delhi NCR, she previously contributed to ANI, Qatar Tribune, Marhaba, Havas Worldwide, and curated content for top-notch brands in the PR sphere. On weekends, she loves to explore the city on a motorcycle and binge watch new OTT releases with a plateful of piping hot dumplings!

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