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Customer Loyalty Program Best Practices - 5 Steps to Success

March 25, 2020

In this article you will learn:

If your brand has a loyalty program, there’s a good chance that it was created initially to get more customers in the door… and keep them coming back to buy more. These programs were intended to offer savings and make consumers feel more connected to your brand because they were part of the “club.”

For the majority of customers, though, a three-foot long strip of paper coupons at checkout, or the occasional 20% discount email offer is no longer enough to drive sales or repeat visits. Consumers today expect personal relevance, not transactional prompts. As a result, brands need to revamp loyalty programs so they can create a more personal connection with their customers.

By improving loyalty programs, brands can understand customers as individuals – from their purchase patterns to likes, dislikes, motivations and other factors. With those insights, brands can then deliver offers and rewards that are more relevant because they appeal uniquely to each consumer. This customer-centric approach allows brands to leverage 1:1 personalization that will result in deeper, more valuable bonds with customers and a greater lifetime value.

If you’re looking to increase the loyalty of your customers, Formation has a five-step plan that can help you kickstart your efforts:

5-Steps to a Customer Centric Approach

#1 Lead your organization

Executive leadership is a prerequisite for becoming customer-centric. Identify goals and objectives for upleveling your customer loyalty program that center on marketing, and are tied to larger business goals. These goals can include increasing revenue by a specific percentage over time, or growing the number of visits by customers or the amount they purchase.

#2 Start small and focus on one product or channel

Don’t bite off more than you can chew. Trying to implement a new way of engaging and rewarding customers can seem overwhelming if you attempt to transform all aspects of your organization at once. Focus on one aspect of your business will enable you to test ideas and achieve results, thereby creating momentum for greater organizational change.

#3 Form a cross-functional team

No longer is loyalty a function of marketing alone. The world of engaging customer loyalty programs and 1:1 personalization requires a cross-functional team that spans all business units, including data science, IT, design, marketing, channel owners, sales and more in order to execute at-speed and create value quickly.

#4 Scale with marketing technology

Determine what it takes to achieve your goals and objectives. These strategies should include how you will implement technology — such as artificial intelligence (AI) and machine learning (ML) — in your marketing stack that can help you achieve personalization at scale and measure success, such as engagement, activity, net incremental revenue or other factors.

#5 Test and learn

Gather data as you test this new approach and leverage technology to connect insights to outcomes. Then build on what you've learned to fine-tune offers and more deeply engage customers. By embracing data-driven experimentation, learning can be turned into scalable results, with a process that supports a continuous, self-improving cycle.

To learn more about 1:1 personalization, and how to overhaul your loyalty program so it takes into account the customer journey and each individual's unique needs and desires, download our white paper, "How to Uplevel Your Customer Loyalty Program."

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