Ye Olde Guide to Launching a Loyalty Program

Loyalty Program for Your Business

Before you get started creating a loyalty program, you’ll want to make sure you have a good reason.

Here’s what you need to know before you begin laying out the best plan for your loyalty program.

How about a turkey leg?

Imagine visiting a new pub in town.

You enjoy a tasty meal, and just before you’re about to pay, the barkeep brings out a perfectly roasted turkey leg and places it in front of you with a grin.

“A turkey leg, on the house,” he says. “We want you to know how much we appreciate your business and hope to see you back again soon.”

What about a pharmacy? Or a convenience store?

The pub example is a simple demonstration of how loyalty programs work to drive customer retention and establish long-term brand recognition.

But a turkey leg doesn’t exactly fit in the retail and consumer goods space. So how do you show appreciation for your customers without serving up poultry?

Not a turkey… That’s where customer loyalty programs come in.

Loyalty programs offer customers an incentive for doing business with you, while at the same time promoting your brand and setting you apart from the competition.

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Avoid these common myths about loyalty programs:

1. Myth: People are only loyal if the rewards are big.
   • Fact: The most popular loyalty programs are easy to use and the rewards are relatively small, but still attractive.
2. Myth: Loyalty programs are only good for huge companies.
   • Fact: Loyalty programs can be beneficial to companies of all sizes, especially if they’re customized to fit your business and customer base.
3. Myth: People don’t want to carry around another card.
   • Fact: With digital loyalty programs on the rise, many customers simply add the program to an app on their phone.

The enormous benefits of a successful loyalty program

First and foremost, the most important benefit of a successful loyalty program is customer retention. The probability of selling to an existing customer is 60-70%.

Compare that to the probability of selling to a new customer, which is 5-20%, and you’ll see how keeping current customers happy is key to success.

1. Boost in customer retention: You may have heard the statistic that 80% of your future revenue will come from just 20% of your current customers. Establishing strong customer relationships with your best customers will have a lasting impact.
2. Increase in customer lifetime value: When a customer signs up for a loyalty program, they’re making an investment in your business, increasing the likelihood that they will return in the future.
3. Encouragement of repeat business: Whether you offer points, discounts, or free products, customers will see the incentive in returning to your business to take advantage of the rewards offered by your loyalty program.
4. Boost in customer satisfaction: When a customer signs up for a loyalty program, they feel appreciated and valued, especially when you offer personalized rewards and targeted communication through email or mobile messaging.

How to create a successful loyalty program

When planning and putting together the details of your loyalty program, there are a few things to consider in order to give your program the best chance for success.

1. What do you want to accomplish?
   • If you’re looking to boost revenue, improve customer satisfaction, or increase customer lifetime value, make sure your goals are clearly defined.
2. Will my program be effective?
   • Just because you’ve seen other companies launch successful loyalty programs doesn’t mean yours will automatically be a hit. You’ll need to evaluate your target market and ensure your rewards align with your brand.
3. Which customers are the most loyal?
   • It’s important to know who your best customers are before you launch your program. These are the customers who already love your products or services and will be more likely to participate in your loyalty program.
4. Will my rewards drive engagement?
   • Make sure your rewards appeal to your customer base and are worth the effort to earn. A reward that’s unattainable will drive your customers away rather than encourage them to keep shopping with you.
5. Will the offer be appealing to new customers?
   • As you implement the program, consider new customers as well. A loyalty program should encourage new customers to get involved, but if it’s too complicated or the rewards aren’t meaningful, they may not join in.

How to successfully launch a loyalty program

Even the most popular loyalty programs in the world would have had difficulty finding success if the word didn’t get out.

Here’s how to ensure your launch goes smoothly.

• Get the word out: You’ll need to make sure that you advertise your loyalty program in-store and online. Make sure your employees are talking about it and actively encouraging customers to sign up.
• The rewards should be clear: Customers should know upfront what the rewards are and how they can earn them. Don’t let there be any confusion about how the program works.
• Be personal: In addition to rewarding customers for their loyalty, send them personalized messages and updates about their rewards, as well as special promotions tailored to their interests.

Maintaining a Successful Loyalty Program

Once your program has been launched successfully and is proving to be beneficial for both you and your customers, it’s important to keep the program running smoothly and make updates as needed.

1. Keep things up to date: Make sure you’re updating your program as customer preferences change. Consider offering new rewards or creating special promotions for your most loyal customers.
2. Engage customers if you need to: If customers aren’t engaging with your loyalty program, you’ll need to figure out why. Ask for feedback and look for opportunities to improve your program.
3. Keep your rewards fresh: If your rewards are outdated or unappealing, your customers may lose interest. Update your rewards regularly to keep customers engaged and excited about earning points.
4. Recognize your top customers: Your most loyal customers deserve special attention. Offer exclusive rewards or personalized experiences to show your appreciation for their loyalty.

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Henry’s Pub & House of Fowl
Data provided by Experian

This guide breaks down key aspects of creating, launching, and maintaining a successful loyalty program while debunking common myths and highlighting the benefits for both businesses and customers.