A successful customer loyalty program helps increase sales and improve profitability. The best approach will not be the same for every company. But there are a few pointers that you can use as a checklist to get started. We have listed them for you!
Clear goals
Is there a specific target group - based on spending thresholds, purchases frequency or other specific segmentation - or is everybody eligible? What do you want to achieve for the target group with the customer loyalty program? How do you define success and how will you measure it? How is your program aligned with the overall marketing strategy? Your goals could be to
- Attract new customers
- Retain existing customers
- Win greater share of wallet
- Prompt customers to make additional purchases
- Stimulate customers to buy other products or services
- Turn a profit for the program itself
- Provide insight into customer behaviour and preferences
- Facilitate business communication with customers
- Differentiate service based on customer types
- Enhance the value-proposition of the product or service
Fitting program type
What sort of program should you use to reach your objectives?
Considerations to structure your program are
- Reward overall spending or at SKU level?
- Reward spending volume, frequency, share of wallet, margin or combinations?
- Long or short term program?
- Use points based system, tiered system or a combination?
- Charge fee for VIP benefits?
- Partner with another company?
- Include game?
- Apart from loyalty incentives, include a lifestyle or community component?
- Apart from loyalty incentives, include extra/ unique products or services?
Smart automation
How can you automate the different process steps in your loyalty program? How can you balance ease of management/maintenance with personalization? What sort of integrations are necessary?
Some questions to ask yourself
- How will we encourage customers to sign up and what options do we provide?
- Do we need IT integration with POS, CRM or other systems? Is it one-way or two-way?
- What customer segmentation data will we collect?
- Do we need other elements than recency, frequency and value?
- Do we need SKU level data?
- What actionable customer insights do we get from the reporting?
Solid platform
Is the SaaS solution scalable, performant and secure enough for your needs? Does it cover all your current functional needs out-of-the-box? Does your provider offer enough guarantees backed by a service level agreement? Some items to check out
- Comprehensive subscription agreement
- SLA on front-end cloud application service availability
- SLA on customer service response time
- Clear data ownership
- Breadth and depth of functional offer
- Experience technical integration
- Existing reporting capabilities
- Willingness to provide customer-specific features and extensions
- Quality assurance across the value chain (from customer sign up to order fulfilment)
- Test communications with a sounding group
Meaningful rewards
What will make your employees feel most appreciated? (By the way, there is a world of difference with 'What do your employees want?') Do the rewards reflect your culture and objectives? Does the provider demonstrate flexibility (e.g. to include your own products)? Some questions to evaluate a reward catalogue
- Does it include mix of merchandise, experiences and charity?
- Does the number of award items enhances or detracts from the recognition experience?
- Do the award items represent customer 'wants' and not just 'needs' to provide a sense or luxury or pampering?
- Will it stand out from what competitors are doing?
