Building A Customer Loyalty Program

author-img By Arina Smith 5 Mins Read 11 September 2023

Customer Loyalty Program

Small margins, increasing competition, and poor customer experiences. Brands are facing rising challenges every passing year. While digital has opened newer avenues of sales and marketing, it has also exposed chinks in a brand’s armor.

Every brand is struggling to find avenues that can help it-

  • Improve branding and build credibility
  • Stay one step ahead of its competition
  • Retain its existing customer base
  • Ensure a steady flow of sales and revenues
  • Create a growth and sustenance plan for the future

Few brands have realized how a well-formulated and executed customer incentive program can help them achieve all of the above.

The question then is- do brands know how to build a customer loyalty program? In this article, we try to find answers to this straightforward, yet complicated question.

If you are a high-ranking executive facing the above challenges, you would be interested in what we have to say.

Customer Incentive or Loyalty Programs: What do you need to know?

Customer Incentive or Loyalty Programs: What do you need to know?

Customer loyalty programs are nothing new. The earliest signs of the same could be found in the 18th century when the Greeks and Romans used copper tokens.

In its modern digitized avatar, we saw brands seriously experimenting with customer loyalty programs fifteen years back. Ever since then, this has been a staple marketing strategy for brands in different niches.

While most brands and marketing heads are in agreement in terms of applying for customer loyalty programs, there seems to be a mismatch.

Experts say there is a serious disconnect between what the brands expect and the solutions they roll out for consumers. This is because, most customer loyalty programs start around what brands want, rather than addressing what would best serve the needs of their customers.

Putting the cart before the horse is what is causing a mismatch of expectations between businesses and their customers. The following are some points that should be taken into consideration.

  1. Old studies on consumer behavior do not apply to the present times. Especially in addressing the behavior of customers in the post-pandemic digitally heavy period.
  2. A current lot of customer incentive programs are too complex. Users need to give up an arm and a leg to avail themselves. The process needs to be simpler and less complicated.
  3. Brands are unwilling to invest in loyalty programs. They would rather spend spending on new customer acquisitions. In reality, repeat customers drive sales.
  4. Loyalty programs need to be digitally-centric in present times. The best ones do not require anything but a consumer possessing a smartphone and nothing else.
  5. The best customer incentive programs are an essential part of a business plan and model. They are not add-ons that are removed whenever the brand feels the need.

5 Things Brands should focus on when Building a Customer Loyalty Program

5 Things Brands should focus on when Building a Customer Loyalty Program

1. Brands should care about their customers-

Everyone wants to feel cared for. This is a basic human nature that should be understood in its entirety. This is something that acts as the foundation of industries in the hotel and hospitality sector.

If customers start feeling that the brands emotionally care about their customers, it will help develop an organic bond. Some of the leading brands offer birthday offers to their customers.

This does two things for the customer. It shows that the brand remembered their birthday and cared for them. Secondly, the brand just like a friend is offering them a discount or some offers to shop around.

2. Brands should want their customers to save money-

Think of how you value your earnings. You know how much you have had to toil and sweat to earn that amount. Imagine if the brand would be sympathetic enough to understand the same?

Financial benefits are one of the top concerns whenever brands are devising customer incentive programs. However, in reality, the complex nature of these programs becomes such that the brand is financially tricking the consumer into making more purchases.

When customers realize this, they feel sad and abandon the brand. You want a program that truly benefits the customers financially. Programs should be made more direct where customers can evaluate how much they are saving.

3. Brands should give flexibility of rewards to their customers-

When it comes to customer loyalty programs, following a one-size-fits-all model is not the best approach. Every customer has different needs, expectations, and emotions. They need to be addressed accordingly.

This means giving the customers the benefit of choosing between the various reward programs. This freedom and flexibility of choosing reward options is something customers want. It makes them feel independent and develops a feel-good factor about the brand and its program.

If you have just one program, not everyone will feel it appeals to them. People can also plan bigger redemptions around events like birthdays and anniversaries if given an option.

4. Brands should pull out all stops to make their customers feel special-

Just like everyone wants to be cared for, so do they want to feel special. Brands that can bring in that exclusive feeling through their loyalty programs end up creating devoted consumers.

Think of how social media has allowed everyone to be mini-celebs in their rights. If a brand’s program can make customers feel like VIPs, then that program deserves to be lauded.

This is why experts point out that incentive programs need to be graded and structured accordingly. This gradation helps the brand satisfy the VIP quotient of the different tiers of customers it has. ‘Only a chosen few are special’ should be the mantra driving customer loyalty programs.

5. Brands should provide customers with the best experiences-

Brand communication needs to be more polished than ever before. No longer are consumer experiences simply restricted to walking into a showroom or visiting the website. In these times, everything from the brand’s app to their chat support qualifies as experience.

This means that the best way forward for brands is creating personalized customer loyalty programs. The more you can individualize the brand’s offering for the customer, the better will be their opinion and experience.

This is where brands need to learn a thing or two about why the customization industry is booming in our era. Everyone wants to be unique and different from the other.

How to Create an Action Plan for Customer Loyalty Programs?

In the last section, we looked at what customers want from a loyalty program. In this section, we are going to list down how brands can create an action plan for an incentive program-

  • Firstly, brands should start their program formulation by understanding the customer’s experience. This means creating programs that best suit what the customers are looking for and expecting.
  • Secondly, data management and analytics can help shed light on the essentials of a program. Analyzing how customers are interacting with the brand and what are the touchpoints can help in creating a result-oriented program.
  • Thirdly, it is important to keep mixing up the rewards. Ideally, you should not have a reward program that lasts post a couple of years. Keeping things fresh in programs helps drive interest and excitement.
  • Lastly, brands need to make loyalty programs an essential part of their business model. Currently, a majority of businesses are running Adhoc loyalty programs that do not have defined budgets. This means proper attention is not being allocated to the same.

The goal for any customer loyalty program is targeting what its customers find ‘precious’. Incentive programs need to be more than just being a value-for-money proposition. They need to be specially curated so that your customers find them enticing.

The Bottom Line

In this article, we have tried to answer a question that most marketing heads struggle with. Building a loyalty program can be the major driver for brands looking to turn around their fortunes. If you have any more questions, you would like us to address on incentives, best practices, challenges, or benefits, hit us up in the comments below.

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Arina Smith

I enjoy writing and I write quality guest posts on topics of my interest and passion. I have been doing this since my college days. My special interests are in health, fitness, food and following the latest trends in these areas. I am an editor at OnlineNewsBuzz.

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