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How to Create Customer Loyalty Program

Discover what to concentrate on when developing a high-performing customer loyalty program with Findbulous' comprehensive guide.

Key Takeaways

  • There are so many options to choose from other than point earn & burn when it comes to designing your loyalty program’s core logic,

  • Tiers are a fan-favorite among customers and have lots of potential for long-term engagement

  • Perks are ideal for boosting enrollment rates and fostering gratitude among members

  • The core loyalty program type can be boosted through gamification, community building, influencer marketing and lifestyle elements

  • For malls, department stores, retail locations or brands with large partner networks, coalition loyalty programs are an optimal fit

  • You can always mix and match elements from different loyalty program types to create a hybrid-style program

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How to Create Customer Loyalty Program 

Step by Step

Step #2: Choosing the Program Type That Fits Best

Loyalty program can be divided into different categories that targets various business kinds and industries. Build your loyalty idea more effectively to provide a memorable experience for your customers by being aware of the different customer loyalty program and which one best matches your business. According to antavo.com, there are 10 different types of loyalty programs to select or combined for your program.

1. Earn & Burn – Reward redemption

The most popular loyalty strategy is called "earn and burn," and it involves rewarding customers with points for their purchases or other actions. Customers can then trade their points for rewards. Customers are encouraged by these types of program to keep making purchases to earn more rewards and feel like their spending is being appreciated.

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Incentivize Purchases

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Give Points

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Redeem Rewards

Benefits:

  • Ease of use: The rules are straightforward & easy for customers to start using the program immediately.

  • Incentivized customer identification: Customers are tempted to identify themselves both online and offline since their purchases are rewarded.

  • Fast implementation: Earn & burn program are easier to implement because of their simplicity.

  • Convenient and easy-to-budget: These programs are easy to manage because the rate of reward redemption is determined by the available loyalty currency.

  • High perceived value: Customers view these rewards as valuable yet easy to achieve, which brings positive effect on engagement rates.

2. Tiered Programs – Progress & Benefit

Customers who advance through the ranks of a tier-based loyalty program are given access to increased advantages and rewards. Tiered programs urge users to interact and spend more to advance to the next tier or, in the event that a tier expires, to keep their current rights.

Silver

Normal Benefits & Rewards

Gold

Better Benefits & Rewards

Platinum

Superior Benefits & Rewards

Benefits:

  • Added value to status: The higher the tier, the more exclusive the brand experience is.

  • More targeted experiences: Utilize tiers to segment your consumer base. By doing this, the experience is enhanced and a platform for targeted communication is created.

  • Establishing a long-lasting relationship: Tier-based programs keep customers engaged for longer, because reaching a new tier feels like an achievement and motivates the customer to continue ranking up.

  • Behavioral science in action: Programs that use tiers expiration due to inactivity will keep customers spending to prevent losing valued privileges.

  • Customers shielded from the competition: Customers are less likely to switch to another brand’s program because of the commitment associated with reaching the highest tier.

3. Perks – Join & Enjoy

A loyalty program based on perks grants benefits and rewards to all members regardless of how much they spent. Create an emotional connection with the brand in order to encourage repeat business. Additionally, this strategy raises enrollment rates.

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Rewards

Incentivize purchase

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Create positive experience

Incentivize engagement

Benefits:

  • Support brand building: Accessible reward experience can drive additional customer acquisition and promote brand awareness.

  • Generate a sense of gratitude: Members will feel indebted to the privileges on offer. Thus, establishing an emotional connection.

  • Easy to manage: There is no liability because there are no points & free from commitments since there are no achievable statuses.

  • High value for actual cost: Even though the rewards typically come at a cheap cost for businesses, clients nonetheless value exclusive services and transaction-related privileges.

  • Highlight services unique to your brand: Characterized your business by exclusive services that are irreplaceable.

4. Gamified Programs – Play & Unlock

This kind of loyalty program uses challenges or badge gathering to gamify customer engagement. To avoid losing their privileges, members are urged to repeatedly engage with touchpoints and do important actions.

Incentivize Actions 

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Incentivize Engagement

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Assign Badges

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Rewards

Benefits:

  • Shape customer behavior: Ensure that each challenge is rewarding by completing a series of tasks or by achieving new milestones.

  • Boost spend through badges: Create badges based on the number of purchases or on total lifetime spend to encourage customers to be active buyers.

  • Popularize non-transactional touchpoints: Helpful activities like filling out surveys, reviewing products, or installing the mobile app can gain popularity.

  • A truly gamified experience: Badges and challenges offer a more exciting and visually enticing way to engage with customers, and helps you to gamify the loyalty experience.

  • A safe choice to launch with: Gamified loyalty programs can be scaled up over time. Explore customer responds to gamified activities, then take appropriate action.

5. Loyalty Communities – Target & Retain

Smaller clubs inside the loyalty program are called communities. They are built on certain subjects, passions, or ideals that matter to your customers. These clubs are a great resource for helping you improve your interaction with members as a result.

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Rewards tailored for community A

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Rewards tailored for community B

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Rewards tailored for community C

Benefits:

  • Add an unlimited number of communities: Deliver experiences that go beyond transactions to each of your customer categories to differentiate yourself from the competition.

  • Connect with customers via their interests: Communities can be centered around a popular product, lifestyle or hobby.

  • Support brand building: Form a community of like-minded people around your company by recruiting clients with unique interests. Community membership can be free or tied to access criteria.

  • Highly personalized experience: Know these customers better and be able to provide targeted offers that truly resonate with them.

  • Reinforced program structure: Communities can serve as an exciting and engaging add-on to another loyalty program type, such as Earn & Burn.

6. Lifestyle Loyalty Programs – Recognize & Engage

Encourage valuable behavior and establish long-lasting brand attachment by rewarding customers for living actively or caring for the environment. Connect your brand to your target audience’s ideals, values and aspirations.

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Benefits:

  • Engage customers outside of the buying cycle: Offer customers experiential rewards to acknowledge members for non-purchase interactions such as recycling or working out.

  • Bolster your brand image: Customers feel better about spending money when they know your company is taking a more active stance on social and environmental issues.

  • Reward positive lifestyle choices: Customers can immediately receive points for completing certain lifestyle activities by integrating a tracking app into your loyalty program.

  • Share the same values: Align with your customers’ beliefs and aspirations especially when their target audience includes Millennials and Gen Z.

  • Building advocacy through lifestyle: Reward them for leading fulfilling lives and show your genuine care.

7. Influencer or Referral Loyalty Programs – Invite & Impress

Advertisements are less trusted than suggestions from trusted influencers, family, and friends. A referral program is therefore among the best strategies for drawing in clients.

Benefits:

  • Leverage word-of-mouth: Customers are the best promoters of your products. People are more likely to purchase a product when it is recommended by close friends and family or an authentic influencer.

  • Create relevant relationships: Reward customers for inviting others to buy from your store to show their contributions are impactful.

  • Easily track influencer activity: Every influencer gets a special link that is seamlessly linked for sharing.

  • Build credibility: Brands can leverage credible influencers' large, engaged audiences to build their reputation and boost sales.

  • Expand your network: Work with new influencers to connect with new audiences. Develop more targeted, specialized marketing campaigns, and develop client connections.

8. Paid Loyalty Programs – Exalt & Differentiate

Members of paid loyalty programmes pay a regular charge in exchange for excellent perks they can utilise immediately. This is a compelling strategy for growing your consumer base and improving your rapport with existing clients.

Benefits:

  • Identify your most loyal customers: These exclusive programs attract dedicated customers to pay for premium privileges with an up-front payment.

  • Connect at an emotional level: Customers and your brand get emotionally connected when it is well recognized. Members will want to take advantage of the benefits from the paid premium program.

  • Drive a higher ROI: A paid loyalty program ensures higher purchase frequency, basket size, and brand attachment. These programs are funded by the initial investment that members make.

  • Obtain quality customer data: Personalize the member experience by collecting data about shopping habits and personal interests.

  • Keep customers engaged for the long run: Members will be more dedicated and engage with your company more often, resulting in a lower dropout rate.

9. Coalition Loyalty Programs – Connect & Unify

Multiple brands are united under one roof through coalition loyalty programs. These initiatives encourage customers to utilize various technology solutions which are ideal for shopping centers, department shops, airports, and retail hubs. They also improve foot traffic in these locations.

Benefits:

  • Increase footfall and repeat purchases: Provide a reason for customers to shop by allowing them to collect points at any retailer and then use those points to receive rewards.

  • In-store customer identification: Choose from a variety of technologies and integrations to build a comprehensive customer experience where customers can be recognized and rewarded with ease.

  • Add value through joint tenant offers: Tenants can upload offers and campaigns directly to the loyalty platform, which you can monitor and review.

  • Gamified customer engagement: Run contests on co-branded social media platforms, plan treasure hunts in-store, implement a multi-brand referral program and promote user reviews.

  • Easy and unified enrollment at all tenants: Integrate receipt scanning, cloud printing, card linking, or other cutting-edge technologies to increase the number of loyalty program participants.

10. Hybrid loyalty programs

A hybrid loyalty program combines two or more different program types since personalizing a loyalty program to your company's needs typically involves combining different aspects.

Benefits:

  • Select the best from each program type: Reach your maximum potential by overcoming the restrictions of each different kind of loyalty program. Start with features from one kind of reward program, then change things up later by introducing interesting new components.

  • Move the most important KPIs: Each sort of program has a unique contribution to improve KPIs. You can easily achieve non-commercial aims with a mixed program, including promoting your brand positioning.

  • Cater to your target audience: Optimize your loyalty program over time to reach your target customer more effectively. Introduce interesting components of several loyalty program models to your clients.

  • Connect with your customers’ values: Introduce elements that help your brand's message and make an everlasting impression. Reward certain lifestyle to build relationships with dedicated customers.

  • Flexibility from the start: Try out different components from various program types and see what works.

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