Create a Customer Loyalty Program That Works

A successful strategy will keep customers coming back to your business.
Customer loyalty on a track
A great customer loyalty program uses social media to promote its program and engage customers. (Photo: Gustavo Frazao/Shutterstock)

There are endless options for customer loyalty programs. Small business owners can choose cash back, perk­-based, tiered systems and more. But how do you know which one is right for you? And how do you set up a successful customer loyalty program?

Rachana Gandi, founder and CEO of D & Rach, chose a points-­based system for her business and immediately saw a positive response from customers, including 25 percent of buyers tracking their points online. She shared some of her secrets to creating a successful customer loyalty program.

Have clear goals

Gandi said deciding on a clear objective is key. Understanding your main goal at the beginning of the process will ensure you keep your sights set on what matters most, and select the kind of program that works best for your business.

“Our goal is to strengthen the customer relationship and loyalty,” Gandi said. “Our reward program allows redemption at every 200 points, and that allows most of our customers to benefit from the rewards program.”

Keep it simple

Too often, companies set up convoluted rewards programs that confuse the customer. That’s a no-­no. Always keep it simple. Confusing customers is an easy way to turn them off.

“Do not keep tricky things hidden in your program,” Gandi said. “Simplicity is the key to any rewards program.”

Put the customer first

Ensuring your company ends up with happy, satisfied customers is always the goal, and that stretches beyond the buying process and into the loyalty program. Don’t submit to rigidity, even if changing means dropping something you like.

“At the end of the day it’s the customer that is going to use your program, and if they are not convinced, it will not fly,” Gandi said.

Tiered systems work

Many customers like to set goals and try to achieve them. Airlines have used tiered reward systems for years with fantastic results. Tap into the tiered concept and create worthwhile rewards for achieving higher status, such as free or expedited shipping on purchases. Some research shows tiered programs lead directly to increased sales.

Go mobile

The punch card graveyard isn’t full, but it’s getting there. Connecting your POS system with a loyalty program allows you and your customers easy access to information (to check status, for example). It also enables companies to gather important data on customers, like purchase preferences and birthdays. This can help with email marketing efforts down the road and to better track the user rate of your customer loyalty program.

Get social

Encourage customers to sign up for your program via social media channels. Promote not just your brand, but your loyalty program here, too.

Companies can also engage customers enrolled in the program on social media, touting advanced sales, premium offers and more, which incentivizes following your social channels and enrolling in the program itself.

There isn’t a silver bullet when it comes to customer loyalty programs as each company has different challenges. But it’s best to start with putting the customer first and then follow the above steps to create a program that works.

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