Building a Customer Loyalty Program: Where to Start?

A hard reality for businesses to swallow is this: customer satisfaction doesn’t always equal customer loyalty. A happy customer may contribute to a good review or two, but it doesn’t guarantee repeat business.

Satisfaction is fleeting. Loyalty is enduring.

A satisfied customer may enjoy your product, but they’re still interested in experimenting with different brands. A loyal customer is more than just temporarily satisfied—they are devoted to your product and your entire brand identity. They are not swayed by your competitors’ marketing efforts despite convenience or pricing.  They choose your business over and over again and encourage others to do so as well.

Loyal customers are high-value customers that sustain businesses and keep them growing. These types of customers are priceless. How do you create them?

What is a customer loyalty program?

A customer loyalty program is a consistent marketing effort designed to encourage repeat purchases and engagement with a certain business. At its most basic level, it is a continuous connection between a brand and a consumer. It is a long-term mutually-beneficial relationship, in which businesses are constantly nurturing their customer base and developing meaningful customer relationships.

These programs reward loyal purchasing behaviors by offering consumers increased value and spending power. The rewards could include: exclusive products or offers, special discounts or pricing, promotions, money rewards, and more.

These money-savings benefits motivate customers to return to the brand again and again. As a result, these customers not only feel valued and appreciated by the brand, they also implicitly trust the value of the business. Customer loyalty programs are most successful when businesses focus on building a consistent loyalty lifecycle. Customer loyalty programs fall short when businesses treat them as a short-term solution with one-off giveaways or promotions.

Loyal customers aren’t easy to come by, but they are worth investing in. Where should your business start?

What does your business want to achieve?

First, business’s need to understand and define the goals they wish to achieve by introducing a customer loyalty program. You want to create loyal customers, but what else? What is your business’s reason or need for creating a loyalty program? Does your business want to increase sales, boost website traffic, enhance brand experience, or all of the above? Whatever your business wants to achieve through the customer loyalty program, it’s important to understand these goals prior to developing a specific plan.

Who is your target audience?

Before starting any type of customer loyalty program, your business must know its target audience. Is your business attempting to engage a new audience or attract a segment of your current audience? If your target audience is too broad, your business runs the chance of creating a generic loyalty program that engages no one. The more segmented your target audience is, the more tailored and unique your customer loyalty program can be.

Study your customers’ behavior

Once you have locked in your target audience, you need to gauge their expectations and their willingness to participate. Analyzing your consumers’ behavior plays an important role in understanding what they want from your business and how your business can provide it. Whether you undergo a series of surveys, interviews, or rewards test-runs, businesses need to understand the purchasing behavior, needs, and wants of their target audience.

What actions do you want to reward? What rewards do you want to offer?

Actions businesses commonly reward include: making purchases over a certain dollar amount, buying a specific product, referring a new customer, leaving a review, or mentioning its product or brand on social media.

The actions a business incentivizes will determine what kinds of rewards are offered to its customers. Discounts and coupons are the bread-and-butter of customer loyalty programs, but they may not be the right fit for a business if its focus is on increasing website traffic and content engagement. For example, if a business wants to reward customer site engagement, they may offer experience-driven rewards like virtual badges, points, or advancing tiers. If a business wants to increase purchases over $50, they might offer free shipping once the purchasing threshold is achieved.

Choose a type of customer loyalty program

Find a structure that aligns with your business’s needs and your target audience’s desires. Do you want a “members only” mentality that creates an atmosphere of exclusivity with “insider” benefits? Or do you want to gamify your program with points, tiers, and badges for a fun customer experience?

There is no one right way to build a customer loyalty program. Check back with Sun Sign Designs as we continue exploring loyalty and how to build it.

Ready to Build a Unique Loyalty Program?

Just like other marketing efforts, there isn’t a one-shoe-fits-all solution. If you’re ready to craft a unique marketing strategy that builds loyalty while fitting your business’s needs and goals, contact Sun Sign Designs for a consultation. We love solving difficult marketing challenges.