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Five Best Practices to Energize Your Loyalty Program

Is Your Loyalty Program Reaching its Potential?

Loyalty programs can be a great way to incentivize long-term customer relationships. Recent research has shown the presence of a loyalty program can make a significant impact on customer buying decisions in a wide variety of contexts:

  • 64% of loyalty members are willing to switch brands to maximize their loyalty benefits.
  • 49% report that, as loyalty program members, they’ve increased spending with a brand.
  • 57% report changes to where and when they buy to maximize their loyalty benefits.

That said, many brands simply aren’t making the most of their loyalty programs. Done poorly, a loyalty program creates ambiguity for all stakeholders. Vague goals, poor data quality and a failure to communicate benefits to customers can significantly hamper program ROI. Likewise, the skills of individual employees are rarely applied proactively to the program’s long-term goals.

Let’s look at five loyalty program best practices and how they relate to success:

Change Buying Behavior, Reinforce Positive Habits
Economic conditions over the last few years have given rise to a culture of “bargain hunters” who are always on the lookout to optimize their purchases. Loyalty programs give you a chance to appeal to your most enthusiastic shoppers through targeted differentiation: Loyalty members are encouraged to build a deep relationship with your brand, which reduces competitor influence.

Analyze Program Data for Lessons Learned
Making the most of a loyalty program means seeking the lessons hidden in the data. Each year offers opportunities to raise customer enrollment, retention, redemption and ROI. To capture these gains, time and resources must be set aside to evaluate results and integrate process improvements. Programs that fail to conduct a loyalty audit are at the mercy of external market factors.

Test and Learn in a Significant Time Period
On a related note, pre-launch program testing must represent a significant commitment by the enterprise. Pilot program data gathered in just a few weeks or months will provide an incomplete and often misleading picture of buying behavior. When developing a new loyalty program, the pilot programs should be extended from the typical six months to a full year before the long-term viability of a loyalty program is assessed.

Coordinate Objectives Across Business Silos
For a loyalty program to become a reliable contributor to strategic goals, all divisions and departments must ramp up to support it. This includes integration of loyalty program benefits into advertising and marketing, development of best practices for all software and technology tools and re-training of sales floor staff –- in short, the deployment of all stakeholders’ capabilities.

Optimize Results Through Market Segmentation
Successful retail enterprises thrive by aligning their efforts to the needs, preferences and expectations of their target consumers. Loyalty program implementation must take into account different market segments, existing purchase behaviors and your objectives. Not only will this allow you to innovate more effectively, but it will also give you the tools to effectively evangelize your program. This ensures customers understand your benefits and how to obtain them.


Need help getting your program to reach it’s potential?

Customer Insight Group is a industry leader in customer reward programs and loyalty marketing. Call 303.422.9758 to learn how we can help enhance your loyalty program so it is driving your key business metrics successfully.

Sallie Burnett
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