Important Tips for Designing a Loyalty Program for Customer Retention

Customer Loyalty Rewards Program

You ask any marketer, and they are busy chasing new customers. Undoubtedly, you should acquire new customers, but it is equally important to build customer loyalty. A thumb rule is, “80 percent of the business’ profit comes from the top 20 percent of consumers who are loyal to the business”. Today’s shopper knows it well that they will be rewarded for loyalty. But the challenge is for brands to ensure that shoppers prefer their loyalty rewards program over the competitor while promoting consumer retention.  In this current digital age, there are numerous tactics which your brand can employ consumer retention and here are some tips that may be useful in the pursuit.


Use Customer Data for Targeted Campaigns

Only a certain number of customers believe that their brands understand their needs and give them relevant offers. If you bombard your customers with random advertisements, it can quickly disillusion a customer a may turn the customers away. It is where tapping the data of the customer may help. Loyalty programs allow companies to collect valuable consumer information. They can use this information to create loyalty campaigns which your customers can relate to.

Example: You are a ‘Sports Store.’

Loyalty Program: Target your loyal customer base in the northern US to especially promote winter sports item.

Focus: It should be on those customers who will need the winter sports gear.

    • Extract data of all those customers who haven’t made any purchase recently.
    • Send a personalized message saying you miss them.
    • Offer them special deals to return and make purchases.

Create Differentiation

Almost every brand offers loyalty rewards, but you should differentiate your program from the competitors. There are numerous ways to distinguish the company’s loyalty programs, and the important ones are:

  • You should create tiers based on the company’s niche to make loyal customers feel appreciated. If you are a Sportswear Company, you can create tiers as ‘school,’ ‘college’ and ‘pro’ sportswear.
  • You should make your rewards resonate with the voice of your brand and values.
  • If you offer your customer with surprise rewards, your customers may make you feel appreciated and can bring them back to you.


Tangible Rewards get Quick Response

Customers are too busy to respond to those complicated reward programs. Understand it this way:

  • You are offering rewards on purchase of INR 3000.
  • Your competitor is offering rewards on the purchase of INR 2000.

Which reward program do you think will taste success? If you are targeting new customers, you should focus on the rewards that are easy to earn for new customers. You can consider a large amount of sign-up points for the new customers to keep them motivated.


Ease of Access

Your loyalty programs should be accessible across a range of devices, and they should be easily accessible on the smartphone. Your customers should access, earn and redeem the loyalty points on the mobile devices as well the desktops easily.



Along with these tips, you can reach out to your advocates who can help you succeed with your loyalty rewards program.

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