How to create a loyalty program strategy?

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Loyalty program Strategy

How to create a loyalty program strategy?

Having a Loyalty program strategy is crucial to the success and growth of your loyalty program. Similar to a marketing or digital marketing strategy a loyalty program strategy outlines the steps involved and how to measure their impact on the businesses. Often businesses want a loyalty program and jump straight to ordering their loyalty cards or deciding on their rewards but skip the first step that is to create a loyalty program strategy.
A Loyalty program strategy should outline a business’s objectives and goals, an understanding of a business’s target customers, Competitors loyalty programs, Loyalty program type and how it will work for both customers and the businesses and budget and resources to carry out the tasks required.

Step one: Do your Homework
Research is key to your loyalty strategy. This part is often taken for granted but it is the backbone of every strategy. Research gives your strategy a clear direction and a deeper understanding of your competitors and your customers’ needs and expectations. This knowledge allows businesses to identify an opportunity to exceed customer expectations and excel ahead of competitors.

Step two: What’s your type?
When choosing what type of loyalty program your business would like to implement there are numerous options (Link). A business might choose an off the shelf loyalty program and make it their own with branding and rewards or creative promotions. Another option is to work with a loyalty consultant and create a bespoke loyalty program. It depends on a couple of factors like budget and resources. Don’t forget what you learned from your homework in step one, your customer’s needs and expectations.

Step 3: How does it work?
When you choose what type of Loyalty program you want to implement or if you create your own, it’s time to figure out the nuts and bolts of it and how your customers experience your loyalty program and how exactly your business delivers this loyalty program. Here you’ll need to engage with a loyalty software provider to see what technology is required for your loyalty program.

Step 4: Choose your channels
As part of the nuts and bolts, you’ll have to decide based on your customers, your business type, your infrastructure and your resources what channels or customer touchpoints your loyalty program will interact with. For example, will it all happen in-store at the till? Will you add a mobile app? Will you communicate via SMS or email or both? Should you offer a postal communication service for your loyalty program? Answering these questions and using your research to back up your decisions makes sure your creating an informed strategy that is beneficial to your customer.

Step 5: Show me the money
Having a budget is crucial if you want to carry out a loyalty program project. Roughly knowing how much you have to spend can benefit your decision-making process and discussions with suppliers which in turn help you create your loyalty program within your budget.

Step 6: Results for the win
The greatest advantage of digital for businesses, well marketers anyway, is everything is measurable. Use your businesses loyalty objectives to outline what you’re a looking to achieve. From here select the KPI’S across the channels that best reflect your Loyalty program objectives. It is important to outline the KPI’s early and give 3-month targets to drive the loyalty program to success. Review these targets regularly and learn from your data. This may mean you’ll change things in your strategy, but it also means you’re constantly improving and giving your customers the best experience possible.

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