6 ways to increase customer loyalty with a loyalty program 

Customer loyalty is waning. And one of the reasons is because companies get loyalty wrong—they confuse satisfaction with loyalty. Just because a customer is satisfied with your product or service does not mean that they won’t turn to another provider at the first opportunity they get for a better price. To avoid this, you have to create a differentiated customer experience. Studies have shown that acquiring a new customer is 5 times more expensive than retaining an existing one. An effective strategy, if well implemented, to increase loyalty involves the savvy execution of a customer loyalty program.

Loyalty programs help retain customers, bring recurring revenue, maximize the lifetime value of a customer, and help create long-term relationships by keeping customers happy and delivering value. Your loyalty program structure will depend on your business model and customers, but there are some guidelines you should follow to make sure you create a compelling loyalty program:

  1. Delight your customers. You will retain customers if you constantly delight them. You have to make them excited to engage with your brand. You can consider small things like making buying processes easier or giving your program members access to more personalized customer service or go bigger by offering unique customer experiences like VIP access to next season’s catalog fashion show. Distributing discounts, coupons or generic rewards is not good enough. The point is to try new things, launch actions that reflect your brand and customers’ needs, and always deliver valuable content.
  2. Recognize loyal customers. Every company has customers that are more loyal than others, and your loyalty program should reflect/reward such via tiering. To keep them satisfied and capture their repeat business, you have to treat them with extra care: offer them top-of-the-line products, more points per purchase, and exclusive experiences and treatment to maintain their loyalty and extend their lifetime value. While your short-term profit margin might be impacted, the advantages, in the long run, will far outweigh the cost.
  3. Personalization. A loyalty program will allow your company to gain valuable information and insight into your customers because you can incentivize them to share information by registering their profile, sharing their interests and preferences, etc. The idea is to use this information in a proactive way to deliver value to your customers by offering them customized rewards and content. If your customers feel they have a personal relationship with you, they will be much more likely to choose you over competitors and become loyal to your brand over time.
  4. Facilitate customer experience. The whole point of having a loyalty program is to better your customers’ experience. First of all, make it easy for them to sign up for your program. If you put up obstacles, people will simply give up on you. Also, streamline their buying process. Through your loyalty program, you will be collecting valuable information on your customers. Use that to make the buying process easier, faster, and better. Consider free shipment, various delivery options (store, office, residence, etc.), allowing your customers to order ahead of time or schedule their checkout time, and giving them access to their own cashier. Use previous purchases to auto-populate shipping addresses or favorite payment methods. Or give suggestions on new purchases based on what they bought in the past. Anything that makes a customer’s life easier will make them appreciate you more and be to your benefit.
  5. Be loyal to them … and reliable. If you expect to gain your clients’ loyalty, you have to be loyal to them as well. You have to be willing to invest in your customers, stand by them throughout the whole sales process and, after that, make sure they are satisfied with the results and their experience. Keep them engaged before, during, and after the sale, providing valuable content and proactively making offers you know will interest them. Always be honest with your customers – about your products and capabilities and set clear expectations. They will appreciate you for it and remember these communications.
  6. Be present. Tell customers you miss them and want them to come back to your store and purchase something else. Be careful not to spam them with content and offers, but letting them know that they are missed and giving them an invite and incentive to come back is always a good idea. By offering a discount, voucher, or coupon, they will understand that their presence is important.

It is very difficult to stand out in today’s increasingly competitive market. There is an abundance of companies offering very similar products, lower prices, better forms of payment, etc. So finding a differentiation point is key to survival. An effective customer loyalty program that considers all the above points will help you do that as you will constantly delight and surprise your customers, making sure they choose you over your competition.