How to Build a Customer Loyalty Program the Right Way

How to Build a Customer Loyalty Program the Right Way


Poorly designed customer loyalty programs require more effort and money to operate than they generate in increased sales. The worst programs aren’t value added to the business or customers, hindering transactions more than if you didn’t have one at all. Here are a few tips on how to properly build a customer loyalty program.

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Do Your Research

There are several models for customer loyalty programs. Some programs reward people with points they can choose how to redeem based on their interests and your offerings. Some loyalty programs create separate tiers of service, one for members, and one for non-members.

A few loyalty programs require you to pay to join in order to access rewards, but few brands can pull this off, so we won’t address that in more detail. Cash-back loyalty programs outright reward people who buy from you, whether the person gets a rebate directly from your business or a coupon worth that amount they can redeem at any point. Determine what type of loyalty program would be attractive to your customer base.

Make Joining Painless

Marketing the loyalty program is a no-brainer. Getting people to sign up shouldn’t be hard, either. If filling out the enrolment form is as time-consuming as filling out a job application, no one will sign up. You shouldn’t ask for tons of information; you’ll collect that as they buy items through your loyalty program. Create a loyalty program that people can sign up with using existing contact information like a phone number or email address so that they simply get started.

One popular way to reward people for purchases now under the loyalty program is to give them a coupon towards their next purchase; now you’ve increased the odds they will come back, especially if they’ve only recently signed up.

Reward Them the Right Way

Offer people discounts and incentives like freebies to get them to sign up in the first place. Then give them tangible rewards for using your loyalty program. This could take the form of a standard discount for members, special discounts on specific items (which you can choose based on what you need to move the most) or extra privileges.

Conversely, emailing member-only discounts and coupon codes is a good way to keep people engaged with the brand and feeling like you’re rewarding them for being members. And if you make it clear that this is how you send them coupons, they’ll have to provide a valid email address.

Keep Them Engaged

There are several ways to keep people engaged with the loyalty program. Send them surveys to ask what they thought of the service. Give them rewards periodically simply for being in the customer loyalty program and still buying your products or services. Note that you can use loyalty programs to generate new business referrals if you give people points or coupons in return for referring a friend.

Customer loyalty programs done right will get customers engaged in a long-term relationship with your company. You could increase the amount they spend with your business while gaining valuable information for marketing to analyze to improve retention for far less money than it takes to attract a stream of new customers.