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Do Customer Loyalty Programs Really Work?

Loyalty programs work! They have to. They have the word “loyalty” in their name… Ah, if life were that simple, that “voluminous shine” shampoo I bought last week would have actually made my hair voluminous and shiny. Instead, it’s boofy.

As with anything, it’s not about what you have, it’s how you use it.

You may need a loyalty program, but you can’t just say, “Alright, everyone gets their 5th coffee free. We’ll use those stampy card thingies to mark them off.” A loyalty program isn’t a simple rule that you create, it’s a community you build through your offerings.

Why might you consider implementing a Loyalty Program of your own? Well, to put it simply, returning customers approximately spend up to 67% more than a brand new customers. Additionally, it is up to five times more costly to attract a new customer than to retain a current one. Just these two statistics alone show the ongoing benefits of maintaining loyal customers.

Here are our top four tips on how to build an easy loyalty program that works for you:

1) Understand your customers
2) Promote the things you want to get known for
3) Make it easy for your customers to be customers
4) Give your loyalty program a catchy name

Understand your customers

Who’s going to your cafe? Who’s buying your products or using your services? Before you even start to build a loyalty program, you need to understand the kinds of customers you attract, or want to attract. This will help you understand what kind of value they are looking for in a loyalty program. People who get coffee regularly might want their fifth coffee free, but people who order your cupcakes might prefer a special members-only discount for your cupcakes.

Promote the things you want to get known for

When you know your target customers, you know what they’re buying. Are you selling the products you want to be known for? A Top Selling Products report can help with this, or having a chat with your staff. Define your specialities, and promote those in your loyalty program. Maybe you want the world to know about your amazing burgers. Make burgers cheaper for members! Give members double-points! A “special” is called “special” for a reason, especially when it’s exclusive to your loyal customers.

Make it easy for your customers to be customers.

Think about how your customers stay connected with you when they’ve gone out of the door. If they have smartphones for appendages (*cough* millennials *cough*), maybe you should offer them a mobile loyalty app where they can track their points. If they are always buying your specials, maybe you should send them emails about your upcoming deals. Maybe give them a membership card if they’re taking your business card. Don’t let them forget that they’re a customer!

Give your loyalty program a catchy name

Oh, the power of a catchy name! You can create a whole new world with your rewards program, so have fun and get creative! Let’s say your business is called “Best Cakes” (convincing, I know). What sounds better, “The Best Cakes Loyalty Program”, or the “Piece of Cake” loyalty program? What’s catchier, “Best Cakes Members”, or “The Cupcakes”? Do you want to earn “points”, or “golden stars”, or “treat tokens”? Technically, the maths is all the same, but the community is different, which makes your loyalty program memorable.

In summary, yes! Loyalty programs do work, after all! But only if you have crafted one that’s specific to your business, your customers, and your offerings. It’s going to take a little bit of detective work, but when you have a clear idea of what kind of community you want to build, and how you want to interact with it, running a successful loyalty program is a “Piece of Cake”.

I know, I know, that joke was terrible. It wasn’t even funny.

But you remembered it, right?


Looking to utilise loyalty marketing for your business? Click here.

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