Loyalty Program Design Solutions
Loyalty Programs reward customers for frequent purchases by giving incentives like discounts, free products, opportunities to win items, early access to new products, and more. Loyalty Programs serve a dual purpose for a business. Firstly, it gives incentive for customers to remain loyal to their brand. Secondly, it provides the business with a wealth of consumer information like name, email address, phone number, birthday, shopping habits, product performance, etc.
Establishing a Loyalty Program for your business can provide you with these benefits, and if developed creatively, can further build your brands awareness and following.
Identify Loyalty Objectives
Position the Program
Common Program Objectives
Keep your customers from defecting. If you're business is in a high-competition market, loyalty programs can help ensure they stick with you and don't defect to the other guys.
By giving extra incentive for repeated purchases, customers are more likely to direct more of their money to your business.
Customers can be prompted to buy more than they intended because of their position close to achieving an award.
The ability to sell points or to receive discounts by purchasing a membership can provide for a substantial increase in revenue.
A loyalty program can provide a business with insight into their customers, as well as, the ability to implement a CRM tool to help convert prospects to leads and leads to customers.
Tracking of customer purchases through loyalty programs can provide insight into how effective marketing campaigns are by comparing campaign dates to purchases in that period.
Loyalty programs allow for businesses to stay in contact with their customers through email marketing, push notifications, direct mailers, and more.
By understanding the buying habits of customers, a business can target specific products to individual consumers based on level of appropriateness.
Effective loyalty programs can enhance the value of a brand, its products, and in some cases outshine competitor programs.
Take advantage of a larger business's brand recognition through partnering on loyalty programs and incentives.
In a partnership loyalty program, each business helps promote the program and those involved. This increases your brands reach into new audiences.
Loyalty programs can attract customers to a brand even when the company has little brand recognition. In some cases, consumers will interact with a brand for the first time based on the loyalty program offered.
Popular Program Types
Loyalty point programs allow customers to earn points from their purchases and redeem them for rewards or free products/services. These are similar to many restaurant loyalty programs, like TGI Friday's rewards program.
In spend programs, customers receive rewards like discounts or "cash" credit for specific amounts they spend. This is similar to many retail loyalty programs, like Kohls' Cash or Yes2You Rewards.
Tiered programs are a more sophisticated form of a points system in which customers reach different reward levels based on their spending habits. This is similar to many casino reward programs.
Paid loyalty programs offer incentives by purchasing a monthly or yearly membership. These incentives can be discounts, free shipping, etc. An example of a paid program is Amazon Prime.
Punch programs offer incentives to your customers to purchase a specific amount of items to receive a free product/service or discount. An example of a punch program is the coffee punch card you get at the gas station.