Did you know that an Accenture study found that more than 90% of companies use one or more loyalty program strategies to attract and retain customers? That means if you type any company name on the Google search bar along with the words “loyalty program,” “loyalty program strategies,” or “rewards program,” you will get a hit at least nine times out of ten!
At a time when nearly two-thirds of organizations say that loyalty programs are extremely effective when it comes to connecting with customers, more businesses than ever before are looking to design tailored and distinctive loyalty program strategies to engage both first-time and repeat customers.
This blog post discusses everything about loyalty program strategies as well as key steps to create an effective loyalty strategy. So, without further ado let’s dive into the realm of loyalty program strategies and discuss it in detail.
What is a Loyalty Program Strategy?
A loyalty program strategy is a well-thought-out and methodical approach that an organization designs and implements to attract new customers and retain existing ones. It entails a set of planned actions and initiatives to create positive and long-lasting relationships between the brand and its customers. A good loyalty program strategy also delivers deep insights and builds customer relationships by being simple, modular, and open. Some examples of loyalty program strategies are:
- Providing redeemable points
- Offering cashback
- Providing paid premium services
- Creating hierarchies
- Joining coalitions
- Gamifying rewards program
- Building community
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Steps to Create an Effective Loyalty Program Strategy
To create an effective loyalty program, it’s extremely crucial to follow the right sequence of steps. Here are seven steps that’ll help you create an effective loyalty program strategy:
1. Understand your customers and identify their needs
Let’s be clear about one thing at the outset. The purpose of your company, your products and services, and your loyalty program strategies is to serve your target customers and make their lives better and easier. Without customers, everything is meaningless. That’s why you must do whatever it takes to understand your customers and identify their needs, preferences, pain points, and shopping behaviors. Once you find out what your customers need from you, it will lay a strong foundation stone for your loyalty program strategy.
2. Determine your objectives
If you want to create a loyalty program strategy, you must have an objective to begin with. Do you want the loyalty program to collect more customer data? Do you want the program to set you apart from your competitors? Or do you want to attract new customers and enhance your sales? Once you define what you intend to achieve with the loyalty program, you can design the right loyalty program that you desire.
Suggested Read: Customer Loyalty Programs: A Ultimate Guide 2023
3. Be clear about your brand values
Brand values are your company’s guiding principles. It encompasses how it sources its raw materials, how it delivers products or services to customers, how it treats its employees, and more. As more and more customers are conscious about a company’s brand values and they see how well it aligns with their values, ensure that you have enough clarity about your brand values before creating a loyalty program. Once you are clear about your values, you can communicate the same using your loyalty programs.
4. Communicate effectively
Communicating your loyalty program(s) is extremely crucial in your loyalty strategy. Designing a high-quality loyalty program and not communicating it to your target customers is worse than not creating a loyalty program at all. That’s why before even creating a loyalty program, determine the channels you’ll use to market it. The channels can include email, website, landing pages, social media, and more.
5. Make enrollment easy
Do you know what many contemporary customers hate in loyalty programs? The difficulty in enrolling and getting rewards. A study conducted by KPMG found that almost 70% of millennials said that they find it more difficult to enroll in loyalty programs and earn rewards compared to less than 50 percent of baby boomers. When creating a loyalty program strategy you must keep the ease of enrolling in mind. Make the enrollment process as simple as possible and avoid excessively complicated process.
6. Provide meaningful rewards
When selecting rewards for your loyalty program, ensure that they are meaningful and valuable to your target customers. The rewards don’t necessarily have to be monetary. More customers have been found to value experiential and non-transactional rewards than customers who value transactional rewards. The best way to make rewards meaningful and valuable is to create an attachment between customers and rewards. When customers put effort into getting rewards, they will value those more.
7. Encourage engagement
Last but not least, encourage customers to engage with your loyalty programs and brand beyond purchases. Encourage them to refer friends, take part in surveys, as well as interact on social media platforms. The more engaged your customers are, the more they will purchase from your brand.
Taking everything into consideration
A well-designed and well-executed loyalty program strategy can be extremely beneficial for every business. At LoyaltyXpert, we have helped many businesses of various types and sizes design effective loyalty program strategies and create well-crafted reward programs. If you want to know how we can help you in achieving high-quality results, contact us today to book a free demo.