Tips for building a successful customer loyalty program

August 17, 2022

Using the right strategy, customer loyalty programs can boost your business’ reach and drive more sales while rewarding your customers for spending. Here are five tips for an effective customer loyalty program.


Did you know? 73% of consumers are more likely to recommend brands to others if that brand has a good customer loyalty program, Forbes reports. Maybe that’s why 65.5% of businesses in the 2022 Global Loyalty Programs Market Report said they plan to invest more in their loyalty programs.


It’s not a bad idea. Done right, customer loyalty programs can result in many benefits, including:

  • Loyalty programs encourage customers to make more purchases, increasing your business’ revenue.
  • Personalized recommendations and discounts improve customer experiences.
  • Loyalty programs give buyers a sense of belonging to your brand, making them more likely to become repeat customers.
  • You can use the data your customers provide when they sign up for your program (like emails, birthdays and more) to fine-tune your brand’s offerings.
  • Creating target advertising campaigns is simple when you already have an established audience of loyal customers.

You know customer loyalty is important. So, how can you make sure your loyalty program is a useful promotional tactic and not just another task to monitor? Here are five tips to craft an effective rewards program that pays off.


Make a customer loyalty plan

Before starting up your customer loyalty program, it’s important to make a plan and set goals. Don’t establish a program just to keep up with other businesses — consider the benefits you and your customers can yield.

Is your goal to attract more customers? To retain current customers? To generate more sales? Tailor your program to achieve your specific business goals.

Consider how you will evaluate your loyalty program’s success. Set measurable, time-sensitive goals to track progress. For example, your plan might include a goal of increasing participation in your loyalty program by 15% over the next six months. To achieve that goal, you might craft an awareness campaign to encourage new customers to sign up for the program.


Keep your brand in mind when building a loyalty program

Remember that your customer loyalty program is an extension of your brand, from punch cards to the program's name. With that in mind, consider which type of program best suits your business needs — and your brand’s look and feel. Here are a few examples of customer loyalty program models to try:

  • Punch cards: Each time a customer makes a purchase, they get a stamp or punch in a physical card. They get a reward (e.g., a free drink) once their punch card is full.
  • Points system: In this model, customers earn points based on their purchases. For example, a customer could earn one point for every dollar they spend at your business. Later, they can redeem those points for a discount or a free item.
  • Tiered spending: With a tiered model, the rewards get better the more people spend. Once a customer reaches a certain spending threshold, they unlock the next tier of bigger and better rewards. It’s a win-win for you and your customers.
  • Paid fee model: Customers may also be willing to pay a small fee to unlock the benefits of your rewards program. Think Amazon Prime — for one annual fee, members get unlimited free shipping.


Consider what your customers want out of a loyalty program

Your loyalty program is meant to keep your customers coming back, so it’s important to make it easy to use and strike a balance with the rewards you offer. They don’t need to be expensive, but they should be “rewarding.” Your customers are real people with real desires.

Go beyond $2 discounts — consider offering gifts and swag to your most loyal members. Not only are they tangible benefits, but they also strengthen your customers’ relationships with your brand. 


Spread the word about your customer loyalty program

Your program won’t lead to results if no one knows about it. Word-of-mouth marketing can take you a long way, so be sure to tell customers, both new and old, about your rewards. It’s important to educate your employees about the program and its benefits so they can tell customers about it, too. Create a dedicated page on your website with all the information your customers need: how to join, the benefits and any necessary legal copy. You could even craft a social media or email campaign. You can even go so far as to create a referral program offering rewards to existing customers who refer a friend to your program — that friend could get a first-time discount, too.


Keep your customer loyalty program fresh

Remember that a customer loyalty program isn’t a one-and-done marketing tactic. Customers’ wants and needs are always evolving — just like your business goals —so your rewards program needs regular maintenance. Collect regular feedback from members and address their complaints and change or update your rewards to keep up with current trends.


The U.S. Bank POS system offers a built-in loyalty program feature, making it easy for you to launch your program and start rewarding your customers for their purchases.

Learn about U.S. Bank

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