Posted on Aug 1, 2018

6 Tips for Creating a Customer Loyalty Program That Works

Take a quick look in your wallet. More than likely, you will discover a partially crumpled punch card from your local coffeehouse, sandwich shop, or gym. You haven’t used that card in months, maybe years. Nor have you visited the business to which it belongs.

The punch card, the old-school version of a customer loyalty program, didn’t incentivize you.

That’s because, in recent years, customer loyalty programs have changed dramatically. Gone are the days when snail mail and punch card offers drove sales. New customer loyalty programs are not only completely digital. They’re efficient, creative, and unique. Here are six tips to creating a customer loyalty program that increases engagement and boosts conversions.

1. Use a Digital Rewards Card.

Digital loyalty card programs, like CandyBar, effectively replace the crumpled up punch cards small businesses used to hand out to return customers. You can customize what you offer your customers and send the reward in a digital stamp.

Your customers aren’t required to download a mobile application. Instead, CandyBar sends a custom URL directly to the people enrolled in your rewards program. CandyBar tracks their purchases, allowing you to provide them with both predetermined and real-time incentives.

2. Offer Smaller Gifts Quickly.

Customers would rather get a smaller, perceivably more realistic benefit immediately than wait a longer period of time for a big reward. Keep your rewards within 10% of the total value of the your customer’s last purchase.

When you offer a gift, such as a buy one, get one coupon, minimize the time it will take your customers to receive that gift. For example, give them a free or discounted gift after five purchases instead of ten. This combination of timeliness and generosity will help to incentivize future purchases and bolster your public image.

3. Provide Exclusive Discounts on Social Media and Email Newsletters.

Your social media followers and email subscribers may not be the biggest shoppers you have, but they are loyal to your brand. Help to convert that loyalty into sales by offering them exclusive, limited time discounts through your social media channels and email newsletters.

Create a unique hashtag for the offer. Make sure to provide a discount code and to use the unique hashtag consistently across all of your social media channels during the marketing campaign.

The benefit of email and social media offers are their trackability. You have real-time metrics to watch. You can tailor your offer based on how the campaign is performing, i.e., extending the offer, shortening it, adding more value, and so on.

Exclusivity cultivates a strong sense of belonging for your existing customers, social media followers, and email subscribers. It helps to retain them, increases their spending, and gives them new reasons to refer your business. Because prospective customers want to feel a part of this exclusive club, your email and social media offers will entice new people to join your email list and follow your business on Instagram, Facebook, and Twitter.

4. Exchange Rewards for Customer Feedback.

Feedback is a priceless currency. It gives you an idea of how well you’re serving your customers, what their opinion of your business is, and how you can improve.

The best part? You pay nothing for feedback. Your customers are a free resource, ready and willing to let you know how you’ve performed and where you should make changes. How can you obtain this sought-after information? After their most recent purchase, offer your customers rewards, discounts, or a free gift in exchange for their timely feedback.

Be very careful about how you proceed with getting customer feedback. For example, stick to mobile- and computer-based surveys. Only use email, text, in-person interactions, or social media messages to gain this highly valuable, actionable information. Avoid using phone calls as many customers, particularly millennials, may view calls as intrusive.

When you do connect with your customers, keep it succinct and simple. Don’t overload them with questions. Otherwise, you risk annoying them and negatively influencing the survey you’re taking.

Ask your customers why they chose your business, which specific service or product they purchased, whether your customers would recommend your business, how they’d rank your services and products, and how the customer service experience could be improved next time.

5. Create a Referral-for-Rewards Incentive.

According to a Nielsen Global Trust in Advertising Report, 83% of more than 30,000 survey participants in 60 countries claim word-of-mouth referrals from someone they know and trust is the most credible form of advertising.

Your existing customer base has an extensive network of prospective, new customers. Tap into that network by incentivizing your current clients with benefits in exchange for referring your services.

The tech hospitality giant, Airbnb, has a famous referral program, which asks travelers to invite their friends to join the platform. If their friends do sign up, the travelers receive credit toward their next stay. Airbnb has a similar referral program for hosts. Active hosts can refer prospective hosts and likewise earn credit towards a stay at another Airbnb.

6. Consider a Trade-In Policy for Loyal Customers.

Until February 2018, L.L. Bean had one of the most well-known trade-in policies in modern business history. Customers only needed to bring in their items and, without explaining why they wanted to return said items, they could receive a full refund for that product. Though unconventional, this no-questions-asked policy established the Maine clothing brand as trustworthy and earned it a cult-like following among outdoor enthusiasts.


Engage Your Customers with High-Quality Content and a Great Business Website

Is your business launching a new customer loyalty program? It’s time to ditch those punch cards and implement a new marketing strategy on your business website. Instead of relying on old-fashioned email sign-ups and snail mail newsletters, engage your customers by sending personalized offers and discounts through your company’s mobile app, website, email newsletter, social media channels, and customized text messages.

Before you kickstart your company’s customer loyalty program, review these tips.


Feature Image: Photo by Helena Lopes from Pexels