A Guide to Customer Loyalty Programmes

Posted 20/08/21

It's widely recognised the cost of generating new business can be significantly higher than retaining existing clients. In a competitive marketplace, keeping your customers satisfied can be the key to longevity and profitability. However, satisfaction alone won't prevent them from taking their business to a competitor that offers them something extra. Retailers, restaurants, salons and takeaways are all dependant on repeat business from loyal customers to keep tills ringing all year round.

That's where customer loyalty programmes have a crucial role to play in your marketing strategy. If well managed and widely promoted, by recognising and rewarding your most valued customers, a loyalty scheme can be a great way to increase retention, understand customers and improve profitability.

Benefits of Customer Loyalty Programmes and Apps

While most schemes are designed to incentivise repeat custom and capture data, customers say they are more likely to recommend a brand[1] once they are a member of its loyalty programme.

'What the British think of Loyalty Programmes',[2] a whitepaper published for YouGov, looks at audiences in Britain to understand what they think about loyalty programmes. The review explores current behaviours, which programmes they are members of and what they would like to see in the future. 76% of Brits are currently members of loyalty programmes, while 73% think they are a great way for brands and businesses to reward customer loyalty.

However, while a loyalty scheme can offer customer incentives, it's essential to focus on customer care. A loyalty scheme alone won't be enough to retain your customers if they get better service elsewhere.

What Type of Customer Loyalty Reward Programme is Right for Your Business?

This will depend on the products or services you sell and your customers. There are three key different types of programmes:

  • Points-based loyalty programmes – consumers earn points by making purchases; these points can then be redeemed later for discounts or bonus products
  • Incentive-based schemes – a business might offer a service such as free posting to members
  • Tiered programmes – reward customers who spend more to reach higher levels and receive greater benefits

Building Relationships With and Understanding Your Customers

Understanding your customers; their needs, behaviours and buying habits is essential to building strong relationships with them. Digital loyalty schemes can offer a rich source of valuable, personal data when customers register their card or app. By profiling your customers, you can send tailored communications, such as discounts and vouchers, making them feel valued and more inclined to make repeat purchases.

Some loyalty schemes and apps encourage and reward social "check-ins" and customer reviews. This is important as loyal customers can become advocates for your business by recommending it to their friends.

Which Platform Will you use?

You may decide to build your own loyalty scheme. In that case, keep it simple. If it's too complicated, your customers are unlikely to return to make more purchases and claim their rewards, or worse, you risk losing their business to competitors.

Here's a guide to some key questions to consider when deciding how to set up and run a successful customer loyalty programme:

Goals – define what you're trying to achieve with your loyalty programme

Results – how will you measure the success of your programme?

Audience – what's your target audience, and what actions are you aiming to encourage?

Budget – how much you are going to spend on your loyalty programme?

Incentives – try to implement a unique set of rewards – not just freebies. Think of something that’s unique to your business and will incentivise your customers

Promotion – tell people about your programme by sharing it across different social media platforms, for example

Evolve – generate customer feedback and assess how you can improve your loyalty programme.

Five Digital Customer Loyalty Platforms

We’ve listed just a few of the digital loyalty apps available. It's important to carry out research before you commit to a particular one to make sure it's right for your business.

Belly

Belly helps you build a digital customer loyalty programme perfectly suited for your business. Through the iPad, your customers can easily sign up, check in and earn points redeemable for their favourite rewards.

LoyaltyLion is a data-driven loyalty and engagement platform that powers eCommerce growth.

It integrates with all major e-commerce platforms, works with agencies, and increases the power of your existing marketing tools and technologies. Their loyalty consultants help create experiences that add value for both your customers and your brand.

Loke

Loyalty and marketing features, created specifically for the hospitality sector.

LOKE provides both web and native apps with the most comprehensive selection of tools to increase revenue and build customer loyalty.

Glue

Glue is a powerful, automated and hassle-free white-label loyalty programme designed for small – micro-businesses such as restaurants, retail shops, hairdressers, and others.

Glue offers a 14-day free trial that includes a membership programme and a range of loyalty features such as rewards, loyalty cards, points earning system and more, all designed to bring your customers back.

Candy Bar

Candy Bar is a web-based loyalty software for brick-and-mortar stores. It aims to create customer loyalty reward programmes for engaging repeat customers. Customers earn a stamp that resembles a digital version of a standard loyalty punch card with every visit.

 

[1] https://yougov.co.uk/topics/consumer/articles-reports/2021/07/29/yougov-framework-loyalty-programme

[2] https://www.mando-connect.co.uk/what-brits-want-from-loyalty/

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