How to Build a Successful Loyalty Program


Loyalty programs are now common in the marketing world and an essential feature of any kind of business, no matter if it is a supermarket, a restaurant, or a high tech company.

Your current customers might account for 20% of all your customers, but are 70% of your total sales, they are also less price sensitive, and there’s a 60%-70% chance of closing a new deal with them. New customers, on the other hand, hardly ever come back after a first sale, are more price sensitive, and it costs as much as 7 times more to gain a new customer than to retain a current one.

Now that we stated how important loyalty programs are, let’s see a few tips that will help you create (or maintain) a successful one.

Signup should be as easy as 1-2-3

Having access to your loyalty program should be easy. Don’t limit the number of channels available to your customers to contact you. Create different ways to signup:

  • Physically at the store
  • A webpage
  • SMS through a mobile phone.

Keep It Simple

Your loyalty program should be really easy to understand. There should not be a lot of rules, and they should be simple and straightforward to understand. And above all: they should be open and honest.

Having points expiration, limited rewards, or a lot of rules (or a complex way to understand the program or interact with it) will surely drive your customers away from the program.

Choose the Right Channels to Communicate

It is really important to reach out to your current and new potential customers in an effective way, and choosing the right channels to do so might take a bit of research first. When running an omnichannel business, some questions will help you see where you are standing:

  • Who are my customers?
  • What kind of channels are my customers using on a daily basis?
  • What kind of channels can I handle with my current staff and infrastructure?

When analyzing the channels, there are also other important facts that drive decisions:

  • Calls: Calling a customer that is currently at work might be annoying, but it might also be annoying (and intrusive) calling to his home at night. Contact centers are also more expensive and tend to be less effective than other channels.
  • Mobile Apps: Besides having to invest in creating an app for different platforms, you should take into account that your clients will have to download it and install it first, and this might pose a different challenge. Also, people that don’t have a smartphone will be left out of your audience.
  • SMS: Regular text messages combine the simplicity of a small text (under 160 characters) that can be used to communicate to anyone with a mobile phone.

Reward Big for Purchases

Make sure that your program is actually rewarding per dollar spent instead of per visit or other actions. Loyalty programs, in the end, should encourage your customers to buy more.

Communicate through the Customer’s Preferred Channel

Don’t forget that not all of your customers will use the same channel to interact with your business, some will prefer email but others will prefer SMS. Make sure they can choose which channels are they favorite way to stay in touch with you, and also, that there is no difference in which channel they like the most. They should also be able to move from one channel to another in a smooth way.

Use your Data, Target your Rewards

If you have a CRM, or other source of information about the transactions that your customers do with your business, use it wisely. Make sure that you send the right rewards, offers, and messages to the right audience. Target, and measure!

Don’t be afraid to interact with your Customers

Be creative! Send surprise offers and coupons, introduce games and leaderboards, try to make it fun for your customers to interact with your program. Challenges are fun, and gamification usually succeeds in improving the number of iteractions with your program.

— The PortaText Team.