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How to create a loyalty program that actually works

Loyalty is arguably the holy grail of marketing. Brands are increasingly turning to loyalty as a preferred way to grow their top line and bottom line, and drive sustainable growth. A well-designed, well-executed loyalty program can help brands win, but it is not easy to design an effective loyalty program. A loyalty program must be data-driven and reward the right customers for the right behavior.

The relationship between the brand and the customer is quite transactional. In a tiered program, there are different levels, and the rewards and value offered to the customer grow with the tier. A good loyalty program taps into the "why" behind the brand and aligns closely with the brand’s purpose. It could be through a combination of high cash value, choice of redemption options, convenience, status, or exclusive benefits. It ultimately depends on whether the brand can create value that far exceeds the cost of membership for the customer.

A good loyalty program delivers high value to its customers. A winning loyalty program focuses on providing not just tangible benefits but also intangible ones. Brands that know how to creatively employ a combination of tangible and intangible rewards have a higher chance of success. Intangible benefits include status, esteem, a sense of belonging, shared purpose, recognition, pride, fun, and even transcendence.

To learn more about customer loyalty programs click here.

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