The potential of points: Tips for a successful loyalty program

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Loyalty program

The potential of points: Tips for a successful loyalty program

Loyalty programs are one of the most effective methods for brands to understand their customers and if done right, they increase both customer retention and sales as well as enhance customer satisfaction.
However, these results are not guaranteed because you have a loyalty program brand must ensure their loyalty program actively engages their customer base in order to see results.

In a previous blog post we highlighted seven loyalty strategies brands could build their loyalty program around.

Today, we discuss the points program in more detail. Loyalty Points programs are not a new phenomenon by any means but they have lasted the test of time and are still favoured by both brands
and customers.

How do loyalty point programs work?

Customers have the opportunity to earn points on items purchased with a brand. Points programs are often facilitated by loyalty cards.
Customers are allocated a loyalty card with a unique barcode or number, in exchange for some demographic information, that they scan during each transaction.

Points programs often allow customers to redeem their points earned and use it against the transaction total.
Points become a currency and this encourages greater customer spend per transaction because the more a customer spends the more points they earn.

This type of strategy has great potential to reward and delight your customers. Often brands offer bonus points for joining the program to encourage participation.

Brands can run numerous double or triple point promotions, for a specified period. These promotions boost spend. Other point promotions are used to enhance customer satisfaction and or experience. Such as double points for personalised occasions like a customer’s birthday or their anniversary as a loyalty member with your brand.
With this type of strategy, additional communication is important to nurture the relationship with your customer and to also stimulate active participation in the program.
Giving your customers the opportunity to sign up for SMS, email or in-App communications is a good idea to ensure the longevity of the loyalty program.
Brands can deliver targeted promotions to specific customers to reward positive behaviour and also reconnect with customers that have become inactive over a certain period of time.
Best practices for loyalty point programs success.
Outline your objectives.

This can be applied to any loyalty strategy. Make sure you outline what is the purpose of your loyalty program is before you design the strategy, for instance, is it to generate new customers, increase spend or gain market share.

Whatever your objectives, it is important to be clear about what your loyalty program aims to achieve in order to avoid an overcomplicated loyalty strategy design.
Data collection
Loyalty programs are a great source of customer data.
Make sure you are using technology to power your loyalty program that can offer you real–time customer analytics, customer reporting and segmentation tools in order to gain valuable insights about your customer base.
Get personal
Aim to personalise each interaction with your customer.
So whether it’s in-store, online via SMS, email or in-app make sure your communication is addressed to the customer and their needs.
Using your customer data and segmentation tools can aid this process and enable you to send targeted offers based on past purchases to specific customers.
Train your staff
Your staff are the first point of contact for your loyalty program, they inform your customers about the program, they tell them how works and they continue to encourage participation.
They are the main influencers for your loyalty program.
Ensure they are trained and equipped for questions your customers may have and make sure they have a clear understanding of how the program works.
It can be a good idea to offer staff incentives to guarantee their help.
Continue to innovate your loyalty program

A loyalty program is an effective tool for building and developing customer relationships but like any relationship, it requires continuous effort and works in order to maintain it.
Your loyalty program relationships are no different. Gain use your customer data to identify different customer segments and think about how to engage with the best.

Keep your offers fresh and run competitions. Consider partnering with other brands to offer your customers of promotions on products and services different to yours.

Best suited

This type of loyalty program is best suited to businesses that have frequent, short-term purchases.

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