Customer loyalty is one of the most important resources a business can invest in. Per our research, loyal customers spend up to three times more than ones who aren’t loyal—or aren’t loyal yet.
If you don’t have one already, you should consider building a loyalty programme to reward your best customers while also reaping the benefits of their loyalty to your business.
And if you do have a loyalty programme in place, you should be looking for ways to optimise it.
At Epsilon, we know what makes the most effective loyalty programmes work. Our PeopleCloud platform is data-driven, flexible, and reliable, with >99% uptime and support for all members.
Below, we’ll take a close look at seven tips for making the most of your loyalty programme.
7 Tips for a Successful Loyalty Programme
1. Understand Your Users’ Interests
The most loyal customers are the ones that know your business best. In return, you should get to know them on a personal level; your loyalty programme should appeal to them personally.
Basing your programme around buyers’ identities drives greater engagement—and loyalty.
That begins with learning who your loyal customers are. This requires integrating user profiles across any apps and websites customers use to engage with your company. And it means opening up channels for users to post to social media or generate content and find community directly within your app.
Then, you should use any information you can glean about your members to tailor everything about the programme to their interests. You can offer promotions based on their purchase history or create special experience-based rewards catering to their favourite activities.
2. Make Sure Your Rewards are Unique
Your customers aren’t the only ones whose unique identity matters. To capture their attention and encourage loyalty, you should present them with rewards they won’t find anywhere else.
The biggest consideration here is offering options. Some members are going to value direct cash back or discounts the most. But others will be looking for experience-based rewards, like opportunities to attend special events or activities tailored to their interests—think yoga or pottery classes.
Another way to showcase your company’s uniqueness is by offering special gated content to customers as a sign of gratitude for their loyalty. Educational or tutorial content can help them feel more productive and stimulated, whereas special access to a curated collection of videos, music, or photos might appeal to the more artistic-minded among your loyal customers.
Yet another possibility is giving members the opportunity to channel their loyalty into charities they believe in. Matching a donation can show them you share their values—and value them.
3. Leverage Industry-Wide Trends
In addition to understanding your customers on a micro-level, you should also have a handle on more macro-level trends impacting buyer pools across the industry you could be pulling from.
For example, consider these trends in shopping behaviour that have emerged since 2020:
- Despite economic concerns, buyers are “treating themselves” to non-essential goods.
- The upshot: Loyalty programmes should encourage “self-care” with confidence!
- The biggest factor in buyers deciding to try new brands is being offered a great deal.
- The upshot: Bigger savings for first-time buyers can drive loyalty down the road.
- Shoppers are eager to return to stores, especially in certain categories (e.g., gardening).
- The upshot: Consider incentivising in-store shopping, depending on your niche!
Knowing how buyers at large are behaving helps you meet a broader audience’s demands. That will help you reach more people and turn them from potential customers into loyal customers.
4. Use Tiered Rewards or Special Categories
The more loyal your customers are, the more benefits they bring to your business. In return, you can reward greater degrees or longevity of loyalty with VIP tiers that grant better and more frequent rewards, opportunities to save, or other special benefits to your very best customers.
For example, consider a loyalty programme that rewards points for each purchase, beginning at a rate of 10 points per £100 spent. Once members spend up to a certain threshold, such as £1000 in a given month, they may become eligible for increased earnings—like 15 or 20 points per £100 they spend. Even higher levels might unlock other rewards categories, like new ways to redeem their points or special super-earner events in which points are doubled or tripled.
On another level, you may consider offering bonus points on special categories, which can rotate according to seasonal demands. If potential customers can get a good deal on a parka in August, and there are bonus points for buying it then, they might be more inclined to purchase.
5. Gamify Everything About the Experience
Whether or not they’re keen on admitting it, shoppers of all ages love playing games.
The most effective loyalty programmes make use of gamification, or incorporating video game elements like level progression, point scoring, and competition into the user experience.
For example, users can visualise their progress toward a higher rewards tier as a bar filling up, similar to how experience works in role-playing games. Or they might be prompted with an odds-based challenge (i.e., roulette or slots) to win bonus rewards at certain thresholds.
There are three main considerations for successfully gamifying a loyalty programme:
- Difficulty – The “game” customers play should be easy enough for anyone to start but challenging enough that it takes time to master—to keep users coming back for more.
- Commitment – Consider whether a binge model would appeal more to your customer base or if they would more likely prefer a “game” they play once per day (or week).
- Community – Make sure customers have opportunities to (and are encouraged to) interact with other people, both in the app and more broadly across social media.
These elements make your members want to engage with your loyalty programme more; they’re also more likely to tell friends about the programme to “play” along with them.
The net result is a wider range of happier—and more loyal—customers.
6. Simplify Access and Use of the Programme
There are two important ways in which your loyalty programme should be easy: 1) the experience of using any app or website connected to it, and 2) the logistic of earning and redeeming rewards.
Loyal customers come from all backgrounds, with varying degrees of technological literacy.
Ease of Use, per the Interaction Design Foundation, requires asking key questions about how your customers will likely use your app or website.
For example, what level of preparation are they likely to have? In what contexts or environments will they be using it? You need to make sure there are affordances in place that make using your interface natural—and enjoyable.
Then, there is the matter of proving loyalty and being rewarded for it. Gone are the days of punch cards customers would shove into their wallet or purse, only to lose days or weeks later. Today’s shoppers expect better points tracking systems and reminders about redemption.
The right platform easily facilitates this via automated emails or SMS messages when a customer reaches a certain point threshold.
However, ease of access and use only goes so far. Counter-intuitively, you also may want to…
7. Build in Some Hurdles to Reward Redemption
No matter how easy a loyalty programme is to use, some customers will forget to use their points. As recently as 2019, Gartner estimated that $140 billion in loyalty rewards went unused. All that unaccounted-for value is hardly helping anyone—neither businesses nor customers.
Building in hurdles to earning and/or redeeming rewards can encourage engagement—and purchases—from your customers and close windows of uncertainty for your business.
Two basic kinds of loyalty programme hurdles to consider implementing include:
- Expiration dates or windows, which clearly establish how long a member has to use any points they’ve earned. For example, points may be usable for 24 months, then expire.
- Minimum spending, such as thresholds rather than rates (e.g., spend £1000 for 100 points rather than earn 10 points per £100 spent). This can also be paired with a maximum rewards limit (e.g., earn up to 1000 points per calendar month/year).
Importantly, these hurdles should never cross over into the realm of unfairness. Users should never be made to feel like redeeming their rewards is impossible; that would run the risk of disincentivizing loyalty. But small challenges make cashing in on their points more rewarding.
Craft the Perfect Loyalty Programme
Using any or all of the tips above is one surefire way to supercharge your loyalty programme, attracting more users to your brand and encouraging greater loyalty from existing members.
But the best way to boost your programme to the maximum is working with a global leader in data-driven marketing like Epsilon. Our PeopleCloud platform empowers your customers with identity-based profiles, real-time rewards for their engagement, and round-the-clock support.
Contact us today to start creating the perfect loyalty programme for your business!
Keep Learning About Loyalty Programmes
- Mistakes to Avoid When Building a Loyalty Programme
- How to Get Customers to Enroll in Your Loyalty Programme
- How to Measure Success with a Loyalty Programme