9 Tips to build a strong customer loyalty program

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Customer Loyalty Program Ideas

Personalised loyalty offers your customers can’t resist

For your customers, there’s a dopamine high that comes with the thrill of buying something new. That’s because humans, by nature, are reward-driven creatures. In fact, our bodies crave the shopping experience and that’s a key reason why loyalty rewards make customers feel special.

As part of a comprehensive CRM strategy, customer loyalty programs are a main focus for retailers. Done well, enrolling a customer in your loyalty program can dramatically increase their lifetime value (that’s the amount of money they spend with your brand in their lifetime).

If you don’t have a strong loyalty program in place, you’re missing out on a huge opportunity.

Loyalty programs may sound straightforward, but there are lots of tactics and features to consider when planning your program. Your program should:

  • delight customers
  • nurture and grow relationships
  • yield measurable benefits for your business

If your loyalty strategy is not carefully thought out or rushed to launch, it can indeed disappoint your customers and have a detrimental impact on your bottom line.

Why are Loyalty Programs Important?

These days, consumers expect to be rewarded for continuously shopping your brand. In fact, customers are willing to spend more if the rewards are worthwhile. That’s right, they’ll spend more (or spend again) to gain certain rewards.

Benefits of ramping up your loyalty landscape include:

  • Customer satisfaction
  • Retain existing customers
  • Optimise sales
  • Attract new customers
  • Increase brand recognition
  • Positive word of mouth
  • Capture valuable customer data

However, the returns you achieve will depend on the strength of your loyalty program. So, let’s take a look at how to make sure your customers love your loyalty program.

How can you create a strong customer loyalty program?

Here are nine tips to elevate your customer loyalty program to greatness:

1. Decide the customer loyalty framework

A popular choice for retailers is a ‘spend and earn’ program. For every $1 spent, the customer receives 1 loyalty point. Once they’ve earned a certain number of points, the customer receives a reward – for example ‘spend $200 and get a $10 rewards voucher.’ A great example of a points-based loyalty program is M Dreams Dreamer Rewards.

Customer Loyalty Program Ideas

You may want to create loyalty tiers so customers who spend more get extra perks, such as extra points or exclusive events for VIP members.

You can choose to include your staff in your rewards programs to make them feel valued, which in turn increases loyalty to you as an employer and helps to reduce staff turnover. You can also run promotions based on the different loyalty customer types, such as ‘staff members get double points.’

2. Clearly define the terms and conditions

Make the loyalty scope clear to customers and include the terms and conditions on your website.

You may like to exclude certain purchase methods from earning points. For example, ‘all purchases via the redemption of loyalty vouchers, credit vouchers and gift cards are exempt from earning points’.

Also, once earned, will loyalty points have an expiry date? Will the loyalty voucher have an expiry date? There are no right or wrong answers, but you do need to decide on conditions that make the system worthwhile for your customers, and easy enough for your business to manage.

Members also need to know where they can shop. While retail chains typically allow shoppers to earn and redeem points across all stores, franchises may set the rule that customers can only earn and redeem points from their local store rather than across the franchise network.

3. Easy customer sign-up

It’s important to consider what sort of experience you want to offer to consumers for the on-boarding process, and also which approach will work best for your retail environment.

Retailers with consistently busy stores can issue loyalty cards without creating detailed customer records in the point of sale (POS) software to speed the process, and then capture customer’s full details down the track when customers are ready to redeem.

Alternatively, retailers may choose to sign customers up via their POS system on the spot. An easy way to do this is to create a customer record and then link a loyalty card to the customer.

For example, when the NFP Vinnies Victoria recently launched their loyalty program they signed up 10,000 customers in the first 5 days.

4. Offer easy ways to track points

Manual systems whereby cards are stamped with each purchase (think of a local café’s offer for  ‘buy 9 coffees get the 10th free’) are the cause of much frustration. Cards can easily be lost or misplaced, and without this manual card, points can’t be accrued or redeemed. That’s annoying for customers, and can have a detrimental impact to the customer relationship, which can also lead to attrition.

A better way to manage your end-to-end loyalty program is in a retail management solution.

Loyalty member details and points tally can be retrieved at the point of sale – even without a loyalty card. If a card is lost, a new card can be linked to the customer, with the current points balance associated to it.

It also adds a nice touch to include the balance of your customer’s latest loyalty points on retail POS receipts.

5. Incorporate purchases across all sales channels

Customers should be rewarded regardless of which channel they shop from. For consistency, make sure your retail ERP software tracks loyalty points for purchases made in-store as well as online.

6. Consistent, personalised communications

Your customer loyalty program has the opportunity to capture huge amounts of data about individual customers and their shopping patterns. For you, this personal data is the perfect way to make sure customers come back again and again.

A recent survey showed that nearly half of the consumers were willing to walk away from brands with whom they already have a relationship because of a lack of personalisation.

Top tips for personalised communications:

  • Ensure loyalty marketing collateral is consistent across all channels – emails, websites, in-store and brochures.
  • When sending notifications directly to members keep the content fresh to promote engagement.
  • Personalise messages with the customer’s name and loyalty member number in their sign-up email, rewards tally or rewards voucher. This makes it easy for them to find their loyalty number in a recent email if they don’t have their card at hand.
  • Encourage the use of the loyalty card (or membership number) with every purchase to help you capture more data about their spending patterns.
  • Send personalised offers that you know the customer will love.

Here’s an example of highly effective personalisation from the Country Road and Trenery Rewards program.

The member receives an email with their name on it, and the reward amount. It also includes a call to action to click on the buttons to redeem the reward. Naturally, you want to jump straight onto the website and buy that top you’ve been eyeing for a while!

Customer Loyalty Program Ideas

There’s also a sense of urgency because the expiry date has been made very clear: “You have a $35 reward and it must be redeemed by 14 August 2019” – which is so effective. That’s clever – and profitable – marketing.

7. Spread the word through referrals

A great way to promote your program is to motivate customers to refer family and friends to your loyalty program. And provide great benefits for doing so – discounts or additional points.

Mutually beneficial offers carry the greatest incentive for referral, because there’s something valuable in it for the existing customer. For example, ‘refer a friend and you both get $20 off.’

8. Issue loyalty rewards in a timely manner

Make it attainable for rewards to be earned in a relatively quick timeframe – no one wants to wait a year to receive a voucher.

Also, let’s say a customer has earned a $50 reward voucher:

  • How will the voucher be issued and redeemed?
  • Will the voucher be emailed to the customer, to be redeemed at their leisure?
  • Will the $50 reward be automatically applied to customer’s next purchase?
  • Or will the sales assistant be prompted that the customer has outstanding rewards at the POS during the customer’s next purchase, and ask the customer if they wish to redeem?

These are all important factors to consider, and of course, it’s best to document the answers in your program’s terms, and in your POS process manuals for staff.

9. Make the most of your loyalty data

A recent global study revealed that there is a disconnect between the goal of customer loyalty and measuring this loyalty, and as a result, loyalty programs can be ineffective.

To keep a program thriving, retailers must continuously analyse loyalty data and refine the loyalty program. Your retail software ERP should provide informative loyalty reports, accessible in real-time.

Here’s an example of how retail giant MYER uses loyalty data to entice lapsed customers back to their stores. The “We Miss You” email is triggered by a specific action – that the loyalty program member hasn’t bought anything for a set period of time, such as 4-6 months.

Customer Loyalty Program Ideas

Immediately, there’s an element of thrill for the customer: “Yes, I haven’t had time to shop much lately, and they noticed! I’ve been meaning to buy [product], so I’ll do it right away with this voucher!” And just like that, the lapsed customer returns.

It’s also a great idea to discuss your proposed Loyalty Program with a VIP customer focus group and obtain feedback. You’ll benefit from knowing exactly what kind of loyalty bonus is appealing to your target customers, whether that’s $ discount, % discount, free gift with purchase, spend and save, or voucher redeemable upon next purchase. Every customer type sees value in different loyalty structures, so it’s important to know what you customers want most.

Ready to create a loyalty program your customers can’t resist?

To achieve big results with your loyalty program, you need a retail software solution that can accommodate your end-to-end loyalty requirements.

Qdos provides cloud-based business management software that can deliver a loyalty program to meet your specific needs, including ERP and accounting, POS, e-commerce, and warehouse solutions.

Get in touch or call (03)8644 4080 to find out how Qdos can transform your loyalty program and the way you run your business.