May 15, 2022

Leveling Up Your Loyalty Program


What do your customers really think of you? The answer lies in loyalty. Growing a loyal customer base should be your end goal as a retailer, and it’s a big part of your bottom line. This is why so many businesses rely on loyalty programs. Here’s how to make yours stand out from the rest.

Do Loyalty Programs Really Work?

In short, yes. There’s quite a bit of evidence in favor of loyalty programs, and the numbers speak for themselves.

  • It’s easier to get a current customer to make a repeat purchase than to sell to a new one. The chances of selling to an existing customer sit at 60-70%, while the chances of selling to a new customer are between 5-20%.
  • Decreasing your customer churn can have powerful results. Even a 5% reduction can increase profitability as little as 25%.
  • Close to half of consumers spend more with brands they feel loyal to than brands they don’t.

But, You Have to Level Up

All of the uncertainty with the pandemic and supply chain disruptions caused a huge increase in the number of loyalty programs out there. Consumers couldn’t do the same face-to-face business that had been the standard for decades. Retailers then had to make a sudden shift, taking all their conversations to the digital space and crowding the loyalty app market.

It’s gotten to the point where simply having one isn’t enough. You’ll need to stand out from the crowd; it’s no longer guaranteed that your customers will join your program just because it’s there. There must be an element that sets your brand apart. Pre-pandemic foot traffic is on its way back, so it’s important to occupy the right digital space to stay top of mind.

Loyalty Program Challenges and How to Overcome Them

Generic Rewards

Sometimes, the rewards you’re offering might be a little too basic. You might not be getting the consumer engagement you’re looking for. But, fear not! This is where data can save the day.

Look at your consumers in segments and see how each grouping behaves. What do they like? What do they expect? All this information can be used to create a full view of each customer, which you can then use to target them with rewards that align with their habits, preferences, and demographics.

A Points-Only Loyalty Program

While some customers may enjoy the opportunity to rack up points with your brand, others prefer the power of choice. Instead of every consumer getting the same items at a particular tier of the program, you can develop a way for them to exchange their points for a variety of apparel, samples, branded merchandise, or food.

Discount Loyalty

Here’s where differentiation becomes crucial. When your loyalty program is all about transactions, customers don’t feel as connected to your brand as they should, and they might not stick around for the long haul.

Smaller, non-transactional rewards are often a better place to start. Quick actions such as following your brand on social media, referring friends, and taking satisfaction surveys help to build a lasting relationship.

Experiential rewards are also not something to shy away from. Maybe certain members of the program can receive early access to new launches or be a part of an exclusive brand ambassador community. Consumers will want to continue participating in the program to have access to these opportunities and connect with your business.

Low Loyalty Program Registration

If consumers aren’t bothering to register for the program, there might be an issue with the sign-up process. How much information are you asking for up front? Many consumers are hesitant to give up a ton of data the beginning, so streamlining your registration process should be a priority. An app that can be scanned at the cash register, rather than a form, might just be the easiest way to go.

Final Thoughts

Crafting the perfect loyalty program is not without its challenges. It requires strategic implementation, innovation, continuous optimization, and the technology to support it. Find the perfect combination of all four, and you can level up your loyalty program with ease, no matter what kind of business you run.

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