Key Steps to a Successful Loyalty Program | CustomerThink

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Key Steps to a Successful Loyalty Program | CustomerThink

Introduction:

A loyalty and rewards program offers the opportunity to solidify
existing relationships, initiate new ones and convert your one-time
visitors, buyers and prospects into repeat business and long-term
members. Implementing a successful loyalty program is all in the
process.

Key success factors:

For your program to fully capture your customer's loyalty and
convert this into revenue and profitability, keep in mind important
elements that are critical to the success of a loyalty and rewards
program:

Precision Targeting – Many Loyalty programs fail to precisely target
and segment their customers, both in terms of demographics/interest and
in rewards offers. Instead, they may offer “discounts”, which only
erodes margin and does little to build actual loyalty.

An effective Loyalty solution will offer:

- Precise segmentation capabilities of customers, including ability for
customers to voluntarily “opt in” to various groups/clubs

- Precision offers, communication and rewards, targeted at customer interests.

Sanity Test.

The goal of your program should be clear. Customers
need to understand what's expected from them and how they can benefit.
In other words, there can be no "smoke and mirrors." The program must
be simple and easily understandable. You (and your employees in the
field) need to be able to explain the ins and outs of your program to
your customers in a way that is easily understood.

Value, Value and More Value.

The rewards offered to your customer
base must have a perceived value. Rewards offered to your customer base
can be a combination of hard and soft benefits but in theory all should
have a strong value associated with them in order to keep customers
coming back for more. Customers really need to become emotionally
invested in your program and feel as if they are being rewarded, they
are a valued, have access and are being recognized. If not, the rewards
will not become their goal and customers will lose interest in your
program.

Rewards within Reach.

The rewards of any customer loyalty program
must be obtainable. The structure of your points and rewards system
should be established in a tiered fashion in order to provide your
program members with an opportunity to receive the perks and rewards
associated with membership in your loyalty program. Random instant
rewards drive the excitement, interest and momentum in the program.

Knowledge is Power.

One of the most significant pitfalls to
effective loyalty marketing is the use of tactics without the benefit
of reliable customer data analytics. All the tools you need to develop
a comprehensive customer profile are at your fingertips. Use survey
questions to ask your customers what really matters to them. What
giveaways appeal to them most? What offers are the most enticing? What
rewards are most valuable? Using such information can be incredibly
valuable in tweaking your program along the way and useful as a means
of providing your customers with what they really want.

Communication.

Establishing a loyalty and rewards program enables
you to proactively communicate with your existing members, prospects or
members instead of passively waiting for them to return to your web
site or stop by a store to purchase your product. Talk to your customer
base often with information and offers that make sense. A rewards
program enables you to easily and affordably create communications that
are valued by your customer (since they have a vested interest in your
company and your products) and you can make those communications
support and enhance your brand in a way that substantially
differentiates your company from the competition.