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Marketing - Aug 28, 2017

Four tips for creating a customer-loyalty program

Strategies to help you keep customers coming back for more

Customers love getting freebies and rewards. Airlines and retail chains have long tapped into this desire, using loyalty programs to keep buyers coming back. Increasingly, shoppers want perks from smaller companies, too.

“The prevalence of these programs has raised the expectations of consumers in all of their business dealings. Wherever they’re spending money on a repetitive basis, they’re looking for recognition, and that applies to small and medium-sized businesses,” says Sean Claessen, Executive vice-president, Strategy & Innovation, at Bond Brand Loyalty, a global customer-engagement agency headquartered in Toronto.

He offers these suggestions when considering a loyalty program for your business.

1. Design your program carefully.

That may sound obvious, but the devil is in the details.

-Your loyalty program should be relevant to your business and your brand, and consistent with customers’ expectations.

-Ideally, your rewards should differentiate you from the pack. “That’s often the trick: the [reward] unique to your business, that can’t be replicated,” says Claessen. He says that could mean you don’t even publish the offer – it’s something you do one-on-one for your best customers, such as staying open later or offering an exclusive level of service or support.

-Understand the value exchange – what you’re offering and what you’re getting back from customers – and don’t over-reward. “There’s a tendency, once you start down this line of thinking, to turn everything into a reward,” says Claessen. You don’t need to reward customers for posting a review of your business, for example.

2. Add a personal touch.

Rewards with a dollar value are important, no doubt, but often people simply want recognition. Bond Brand Loyalty recently conducted a survey of more than 28,000 loyalty-program members, and it found that two-thirds of satisfaction comes from the program experience – accessibility, convenience, how special it makes them feel – and one-third from the actual rewards themselves. Depending on your business, you could offer special perks (like early access to a sale), immediate points redemption (rather than having to accumulate a predetermined amount first) or other features that would make your program a pleasure to use. Your front-line staff also play a key role in creating a more personalized experience, so make sure they’re well-versed on all aspects of your program and promoting its benefits to customers.

3. Control the data.

It’s easy to find a third-party vendor to help you design, launch and run a loyalty program, or manage a customer database. Before you commit, though, find out who owns the data and how readily you can access it. “Even for small-business owners with just one or a few locations, that data is becoming more valuable, especially if they eventually pass the business to someone else to operate or own,” says Claessen. “Understand what aspects of the data you’re keeping and what you’re giving away to an intermediary, the people you’re allowing between yourself and your customers.”

4. Stay in touch.

“Communications, and the frequency of communications, can make or break these programs. Maintain a relevant dialogue with people, and show them you’re using the data they’ve volunteered,” says Claessen. How often to contact customers depends on your type of business, as well as what you’ve outlined as part of your program. Though it may sound surprising, for some companies even three times a day isn’t too much. “For a consumer who’s very invested in the business, not only would they be willing to accept that, but they might be eager for more,” he adds. Remember: always get customer consent to communication first so that you’re in compliance with Canada’s anti-spam legislation.