4 things to think about when setting up a Loyalty Program



Loyalty Program

A Loyalty Program is a popular way for you to give incentives to your customers. To have your customer remain faithful to your brand and as a result visit your business more often.  With the advent of technology, the cost of setting up a Digital Loyalty Program for your business has reduced dramatically. Of course, this is a good thing! 

However, as the cost goes down, many businesses rush to implement a Digital Loyalty Scheme without perhaps doing their homework.


You need to take a strategic approach to your Loyalty Scheme, so that the direction you take brings results . Whether you choose a traditional stamp card on paper or a more advanced digital loyalty scheme.

There are many questions that you need to answer. Here are a few to start you off.

Once you have satisfactory answers to these questions you will begin to define the characteristics of your program. To shape it into a customer retention and loyalty scheme that will pay dividends. 

Stamp Card

1 Why am I thinking about setting up a Loyalty Program?

There may be several reasons that have set you along the path to creating a Loyalty Program for your business.  Make sure that your motivation is not replacing a poor product or a bad service with a Loyalty Program. With the hope that the Loyalty Program will bolster your sales efforts.  Customer service and product fit for your target market and your pricing policy must be sound before you choose the Loyalty direction.

2 What would I give as Loyalty Rewards?

Now you have determined that you want to create a Loyalty Program to raise the average spend per customer. You must create the offers with your customers in mind.  What is the Value Proposition of your Loyalty Program? What are you going to offer your customers? The value of your incentives have to be well thought of by customers, to attract them to the program.  This does not mean that the rewards need to be of a high price, however it does have to be of a high value.  Another dimension is time.  Are the rewards immediate or does the customer have to wait and accumulate points to qualify for a reward? if he has to wait too long he may not participate.  Perhaps a balance of the two approaches is best suited for your customers.


3 What are the objectives or goals of the program?

Every business endeavor needs to have a set of goals or objectives against which success of the project is measured.  This is clearly true for a Loyalty Program too. There are goals that can be defined as intrinsic core goals, primary goals and even secondary goals.  In the industry sector in which you operate you must determine what the objectives of the program are for your business, in order to gain more traction or to have members spend more money.  This will give direction to the program and also a handy way to measure the ongoing success of the Loyalty Program.  You will naturally want to increase revenue, profits and market share and these may be categorized as core goals of the program but what other goals may there be that you can think of and measure? 

4 How will I communicate with the Loyalty Scheme Stakeholders?

Communicating about the Loyalty Program is possibly the area that most Loyalty Programs in most small and medium sized business do the least well and that is what stops them being profitable. There are three groups of people that need communicating with in order for your program to succeed and they are Customers, Employees and Management.  Each group has different needs and will need to have different messages at different frequencies.  In short pay close attention when you build the Loyalty Program to the different needs of these three distinct groups

Creating and running a Digital Loyalty Scheme for your business can be a rewarding experience for your customers and of course for your business.  More and more we are seeing a convergence of the traditional bricks and mortar Loyalty Schemes combine with an On Line version to provide a complete end to end loyalty experience to the customer.

No matter if you are introducing a new idea or giving a face-lift to an existing one, always plan carefully and set realistic and achievable goals for the program

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