How To Make Customer Loyalty and Benefits Programs Really Work

The importance of retaining customers remains a central part of management lore. It costs a company a whole lot less to hang on to the customers it has already accrued, than it does to acquire more. Customer loyalty programs are often touted as an invaluable tool in this process, and it’s true – when they’re done well, they have customers coming back for repeat purchases and becoming loyal brand advocates. When done poorly, however, they can drain time and resources and cause customers to form negative associations with a brand whose program they have no interest in.

So how can you as a manager ensure customer loyalty and benefits program actually work? Well, by offering actual value to the customer, of course. Let’s have a look at some of the things you can do in order to keep your customers enticed. Please refer to as well.


Use a Simple Point System


As common as the simple point system is, companies often make the mistake of making the relationship between points and rewards far too confusing. The beauty of the point system lies in its simplicity – frequent customers will earn points that then go towards a reward like a discount or a freebie. If you use this program, make sure to keep the point to reward conversion intuitive and simple, instead of just another headache for your customers to navigate through.


Use a Tiered System


Tiered systems encourage more purchases and reward initial loyalty. This system involves presenting smaller rewards as a basic offering to customers simply for being a part of the program. Then repeat customers are encouraged to keep making purchases by increasing the value of the rewards as they become more and more loyal. Too often, program members simply forget about their points altogether, and don’t redeem them. A tiered system avoids that problem by enticing them back. The tier system also allows customers to get long-term value from the program, making it particularly useful in businesses like airlines and insurance companies.

Randomize Your Loyalty Program


Try making a game out of your loyalty program. Everyone loves a good game, after all. Doing so encourages repeat customers, and can also help with your brand image. If you’re going to have sweepstakes or contests, however, make sure to mitigate the risk of your customers feeling cheated out of a reward, or jerked around by the business. Never keep the odds lower than twenty five percent. Also, make sure the purchase requirements are attainable for as many customers as possible.

Plus, you need to be absolutely sure that your company’s legal department has been fully informed about the contest and is on-board before you make your contest public. Have the legal department iron out any potential kinks. This kind of program can work for almost any type of company – even a B2B company. Not only can this sort of program make the buying process more fun and engaging, but it can also work wonders for your brand image.