Do Rewards Program Really Build Customer Loyalty? Know the Tips & Tricks
- Posted on February 22, 2022 by natalia
- Reading time about 6 minutes
Winning customers’ hearts is what every company looks for, irrespective of the industry type you deal with. Many business owners believe in investing in rewards programs to not just gain customer loyalty but also to retain them for a long time. However, the true potential of a loyalty program to attract customers depends only on delivering the rewards that customers want. Yes! A good loyalty rewards program can build customers’ loyalty & offer immense benefits to the organization.
Loyal customers are essential to boost revenue & they become less costly to serve with more years of relationship. Additionally, they are more likely to become business builders by bringing in new customers through referrals, buying more & paying premium prices. The main reason why many loyalty programs fail is due to improper design, poor strategy, & irrelevant reward types that return only a small fraction of their potential value.
Tips to Design the Best Customer Loyalty Program for Your Business
To create a well-planned rewards program that works best for you & your customers, you must focus on building a system that keeps customers constantly educated about the rewards of loyalty and motivated to earn them as well.
Here are some of the things that must be kept in mind while designing a loyalty rewards program with a strategic approach that can help you achieve sustainable loyalty.
1. Know Customers & Their Needs
Customers are still the king of any business. They won’t buy a product or service from your brand unless you offer personalized experiences as they have more choices than ever. Make sure that your loyalty program is good enough that customers cannot ignore by using customized marketing campaigns based on the insights collected from customer behavior, personal preferences, etc. Additionally, you can encourage social media activity to share reviews of your brand with their friends and family.
Choose the Best Program Type
Though there are many types of loyalty programs that your brand can use to make your customers loyal such as points, tiers, partners, discounts, premium access, etc., choosing the right type of program is essential considering your customers’ needs.
- Points program – The most common type that focuses on rewarding users for every purchase with reward points that can be used for future purchases.
- Tier program – This one focuses on increasing levels of brand loyalty with rewards that get better with every tier customers climb to.
- Partner program – This works when two or more brands partner with one another to provide customers with exclusive discounts/offers that they can redeem with any of the brands.
Reward After Customer Behavior Analysis
Rewarding your customers only with the type of experiences they expect is what you need to make your business grow. These action-based rewards programs can offer a great benefit i.e. reward with special privileges during a slow period of the year, the reward for new customers referrals, the reward for social media engagement, etc. Take time to analyze the customer behavior & preferences to help you reward them exclusively through your loyalty program.
Work on an Effective Approach of Loyalty Program
Having a well-planned approach is required to make your loyalty program a success. Build the loyalty program in such a way that it has a user-friendly interface with easy to track functionality for rewards. For instance, a poor registration process can be a big turn-off to your customers and may block any success that your program has to offer.
Select Suitable Loyalty Program Structure
The way you choose to reward your customers can have a great impact on the success of your loyalty program. Here are some of the main program structures that can be commonly used by many business owners-
1. Reward only after Number of Purchases
This is the type of program structure where customers either get a free product, discount on favorite products, or loyalty points after making a certain number of purchases from a brand.
2. Reward after Total Amount Spend
Some business owners encourage their customers to spend more by rewarding them only on big amount purchases or on completing a minimum amount of purchase in a month or week.
3. Instant Gratification
This program structure is when the brand provides instant rewards such as free delivery, exclusive access to new product launches, special benefits, added value, etc. on the purchase of the service or plan.
Provide Personalized Offerings
One reason behind unsuccessful loyalty programs is that they treat all customers as equal and provide them with the same products that offer equivalent value irrespective of how much they spend. The companies who are offering average-value products are the ones that waste money and efforts in over-satisfying profitable customers and under-satisfying the valuable ones. One way is to offer better prices to only loyal customers. For E.g. banking firms often give lower interest rates to their long-time customers, which can be a plus point as loyal ones play a great role in boosting revenue.
Follow a well-strategized Marketing Plan
The last point that is important for the program’s success is to set up the loyalty program using an effective CRM infrastructure that can help to figure out the best loyalty initiatives with a 360-degree customer view. This not only helps to target the right offering at every customer touchpoint but also enables them to analyze program insights with a performance review of the customer loyalty program from time to time and take actions accordingly.
We know that customers expect the best from the brand they choose to work with, which is why having a solid customer rewards program is a must that can keep customers valued and delighted with your service offerings. Every customer has different needs when it comes to rewards they expect – whether it’s instant rewards on the purchase, personalized services, seamless experience, or discounts on their favorite products, ensure that you optimize the program regularly to meet every specific need of the customer. For any queries regarding the loyalty or Cashback Rewards Program, get in touch with our expert loyalty app developers to build the right program and embrace immense benefits for your business winning your customers’ hearts.