Loyalty programs are like relationships. Most people think they’re doing it right, but in reality, they’re just pissing off their partner and wasting money on flowers.
If you’re running a business, you’ve probably heard the spiel about how customer loyalty programs are the holy grail of marketing. They’re supposed to turn your customers into raving fans, boost your sales, and make you the next Apple or Amazon. But here’s the kicker: most loyalty programs are about as effective as a chocolate teapot.
Creating an effective customer loyalty program isn’t about copying what everyone else is doing—it’s about understanding your customers and giving them what they actually want. Not what you think they want, not what some marketing guru told you they want, but what they really, truly want.
So, buckle up. We’re about to embark on a journey through the treacherous waters of customer loyalty programs. By the end of this article, you’ll either have the tools to create a kickass loyalty program, or you’ll realize you’ve been doing it wrong all along. Either way, you’re welcome.
Let’s start with a hard truth: most loyalty programs suck. They’re about as exciting as watching paint dry, and about as effective at building loyalty as a wet handshake.
Why do they fail? Because most businesses approach loyalty programs with all the finesse of a bull in a china shop. They slap together a points system, throw in some mediocre discounts, and call it a day. Then they sit back and wonder why their customers aren’t falling over themselves with gratitude.
Here’s the thing: customers aren’t stupid. They can smell a half-assed attempt at “loyalty” from a mile away. And contrary to popular belief, they’re not just looking for freebies. Sure, everyone loves a good deal, but true loyalty is built on more than just discounts and points.
The psychology behind customer loyalty is complex. It’s not just about transactions; it’s about emotions. People are loyal to brands that make them feel something—whether it’s a sense of belonging, a feeling of being valued, or the satisfaction of making a smart choice.
So, before you rush off to create your own loyalty program, take a moment to consider: are you ready to invest in your customers’ loyalty, or are you just looking for a quick fix?
If you want to create a loyalty program that doesn’t suck, you need to start by understanding your customers. And I don’t mean in that superficial, “our target demographic is millennials who like avocado toast” kind of way. I mean really understanding them.
It is where data comes in. But not just any data—meaningful data. The kind of data that tells you not just what your customers are buying but why they’re buying it. The kind of data that reveals their pain points, their desires, and their behaviours.
But how do you get this data? Well, you could start by actually talking to your customers. I know, it’s a revolutionary concept, right? Surveys, focus groups, and one-on-one interviews can provide invaluable insights. But don’t stop there. Analyze your sales data, your website analytics, and your social media engagement. Look for patterns, anomalies, or anything that gives you a deeper understanding of your customers.
Take Netflix, for example. They don’t just collect data on what shows you watch. They know when you watch, how long you watch, what device you’re watching on when you pause and when you rewind. They use all this data to create a personalized experience that keeps you returning for more. That’s customer understanding on steroids.
The point is, before you can create a loyalty program that resonates with your customers, you need to know who the hell they are and what makes them tick.
Alright, so you’ve done your homework. You understand your customers better than they understand themselves. Now comes the fun part: creating rewards that don’t suck.
Here’s where most businesses go wrong: they assume all customers want the same thing. Spoiler alert: they don’t. Some customers might be motivated by discounts, others by exclusive experiences, and some might just want recognition for their loyalty.
The key is to offer various rewards catering to different customer segments. And no, I’m not talking about giving away free pens with your logo on them. Instead, offer rewards that add value to your customers’ lives.
Consider the Sephora Beauty Insider program. It offers a tiered system with rewards ranging from free samples and beauty classes to exclusive events and early access to products. Sephora understands that its customers value not just products but experiences and knowledge related to beauty.
But here’s the tricky part: you need to strike a balance between attainable and aspirational rewards. Make your rewards too easy to achieve, and they lose their value. Make them too difficult, and customers will give up before they even start.
Remember, the goal isn’t just to give stuff away. It’s to create a program that enhances the customer experience and strengthens their connection to your brand. So think beyond discounts. What can you offer that aligns with your brand values and resonates with your customers?
In the age of data, personalization is king. But there’s a fine line between personalized and creepy. You want your customers to feel like you understand them, not like you’re stalking them.
Effective personalization goes beyond just using a customer’s name in an email. It’s about tailoring the entire loyalty program experience to individual preferences and behaviours.
For example, Amazon’s recommendation engine is a masterclass in personalization. It doesn’t just show you products similar to what you’ve bought before. It considers your browsing history, your wishlist, what other customers with similar tastes have bought, and even the time of year. The result? Recommendations that are eerily accurate (and incredibly effective at getting you to buy more).
But personalization isn’t just about selling more stuff. It’s about creating a more relevant, engaging experience for your customers. Maybe it’s sending birthday rewards, offering points multipliers on a customer’s favourite categories, or providing customized challenges based on their shopping habits.
The key is to use the data you have responsibly. Be transparent about what data you’re collecting and how you’re using it. Give customers control over their data and the ability to opt-out if they want. Remember, the goal is to make customers feel understood and valued, not exposed and vulnerable.
In today’s digital age, it’s easy to get caught up in the latest and greatest technology. But here’s a hard truth: technology is a tool, not a strategy. A fancy app or a blockchain-based points system won’t save a poorly conceived loyalty program.
Don’t get me wrong—technology can be a powerful enabler for loyalty programs. Mobile apps can make it easier for customers to track and redeem rewards. AI can power personalized recommendations. Blockchain could potentially revolutionize how points are stored and transferred.
But technology should serve your loyalty strategy, not drive it. Before you invest in any tech, ask yourself: How does this enhance the customer experience? Does it align with our customers’ preferences and behaviours? Can we effectively implement and maintain it?
Take Starbucks, for example. Their mobile app is a key part of their loyalty program, allowing customers to order ahead, pay, and earn and redeem stars (their version of points). However, the app works because it aligns with their customer’s desire for convenience and their habit of frequent, low-value purchases. The same approach might not work for a luxury brand or a business with infrequent, high-value transactions.
The bottom line? Choose technology that supports your loyalty strategy and enhances the customer experience. Don’t just jump on the latest tech bandwagon because it’s shiny and new.
So you’ve launched your loyalty program. Congrats! But don’t break out the champagne just yet. The real work is just beginning.
Measuring the success of your loyalty program is crucial. Without proper metrics, you’re just throwing spaghetti at the wall and hoping something sticks. But here’s the catch: success looks different for every business.
Sure, you should track some universal metrics: enrollment rates, active membership rates, redemption rates, and customer lifetime value. But don’t stop there. Think about what success means for your specific business and your specific goals.
Are you looking to increase purchase frequency? Average order value? Customer retention? Define your goals clearly and choose metrics that align with those goals. And for the love of all that is holy, don’t just focus on vanity metrics like total number of members. A million inactive members are worth less than a thousand engaged ones.
Set realistic benchmarks based on your industry and your current performance. And remember, Rome wasn’t built in a day. Loyalty programs take time to gain traction and show results. Be patient and ready to iterate and improve based on your data.
Speaking of iteration, that’s perhaps the most important part of measuring success. Use your metrics not just to pat yourself on the back (or bang your head against the wall) but to improve your program continuously. Are certain rewards not being redeemed? They may not be as appealing as you thought. Is engagement dropping off after a certain point? Maybe you need to introduce new tiers or challenges to keep things interesting.
Remember, a loyalty program isn’t a set-it-and-forget-it proposition. It’s a living, breathing part of your business that needs constant attention and refinement.
Creating a kickass customer loyalty program isn’t rocket science, but it does require thought, effort, and a willingness to put your customers first. It’s about understanding what your customers really want, not what you think they want or what’s easiest for you to provide.
The future of customer loyalty isn’t about points or plastic cards. It’s about creating meaningful connections with your customers, adding value to their lives in ways that go beyond transactions, and turning your brand into more than just a logo—something that customers genuinely want to be associated with.
So, are you ready to rethink your approach to customer loyalty? Are you willing to put in the work to create a program that resonates with your customers? Or are you content to keep pissing away money on a mediocre program that’s about as loyalty-inspiring as a root canal?
The choice is yours. But remember, in the world of customer loyalty, you’re not just competing with other businesses in your industry. You’re competing with every other loyalty program out there. So don’t half-ass it. Create a loyalty program that’s worth being loyal to.
Now go forth and loyalty. Your customers are waiting.
Look, we’re not here to blow smoke up your arse. We’re here because we know our shit when it comes to customer loyalty programs. We’ve seen the good, the bad, and the downright ugly in this industry. We don’t just follow trends; we set them.
Our team has a track record of creating loyalty programs that actually work, not just look pretty on paper. We’ll give you the honest truth about what your business needs, even if it’s not what you want to hear.
We’re not your typical ‘yes men’ agency. We don’t believe in one-size-fits-all solutions or copying what worked for someone else. Our approach is all about digging deep into your business, understanding your customers, and crafting a loyalty program that’s as unique as your fingerprint.
We’re not afraid to challenge your assumptions or push you out of your comfort zone if that’s what it takes to create a kickass loyalty program.
Up until working with Casey, we had only had poor to mediocre experiences outsourcing work to agencies. Casey & the team at CJ&CO are the exception to the rule.
Communication was beyond great, his understanding of our vision was phenomenal, and instead of needing babysitting like the other agencies we worked with, he was not only completely dependable but also gave us sound suggestions on how to get better results, at the risk of us not needing him for the initial job we requested (absolute gem).
This has truly been the first time we worked with someone outside of our business that quickly grasped our vision, and that I could completely forget about and would still deliver above expectations.
I honestly can’t wait to work in many more projects together!
Disclaimer
*The information this blog provides is for general informational purposes only and is not intended as financial or professional advice. The information may not reflect current developments and may be changed or updated without notice. Any opinions expressed on this blog are the author’s own and do not necessarily reflect the views of the author’s employer or any other organization. You should not act or rely on any information contained in this blog without first seeking the advice of a professional. No representation or warranty, express or implied, is made as to the accuracy or completeness of the information contained in this blog. The author and affiliated parties assume no liability for any errors or omissions.
