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Rewarding customers is more complex than it first appears.
Rewarding customers is more complex than it first appears.

How to create a winning loyalty program for your customers

Loyalty programs offer myriad benefits for businesses, explains Simon Dell, who advises the ins and outs of strategies to keep shoppers coming back for more.

There are few things more valuable to a business than loyal customers, but how do you attract those shoppers and keep them coming back?

Naturally, delivering great service and products is one way – but a loyalty program is even better.

Offering loyalty benefits is a great way to say 'thank you' to returning shoppers, as well as attracting new ones – and there are other benefits for businesses too.

Create a connection

Today, customers want to make an emotional connection with brands, which is why you may have noticed so many businesses prioritising open and honest communication with shoppers.

The business tells their story, in the hopes that customers will identify with them and support them accordingly.

Loyalty programs provide a platform for that long-lasting connection; it is not just about ‘freebies’, discounts and rewards, but also communicating and connecting with customers in a positive way.

Harness technology

Traditionally, a loyalty program may have been confined to email communication, or even ‘snail mail’!

“Loyalty programs are of course designed to increase customer loyalty and keep people shopping with you, with the end goal to generate more sales and profits – but it should never appear that way.”

Now, businesses can provide an omni- channel experience for their customers. When setting up a loyalty program, these are some of the ever-expanding points
of interaction at which you can provide benefits for, and communicate with, customers:

• Apps– Send alerts, discounts, or offers to customers through your business’ app; alternatively, an app can simply offer a fun and convenient way to interact

• Social media– Social media is now a necessity for loyalty programs. It is not only convenient, but also gives customers a chance to share and promote your business to like-minded shoppers

• Email– We all hate spam, but when your customers are engaged enough to willingly seek email offers and communication, take the opportunity! Email is a great way to announce sales, introduce new products, educate customers, or offer exclusive discounts

• Text messages– In advertising terms, using text messages is a relatively new phenomenon, but it’s very effective. Use texts to let your loyal customers know about special offers and limited time opportunities, but be careful not to come across like spam or a scam!

This omni-channel approach lets you show customers they are valued and makes them feel included. It also keeps your business top-of-mind, allowing you to take advantage of opportunities to secure a sale at any time of the day.

Understand what customers want

Delivering value is one of the key components of any loyalty program.

When creating your loyalty program, research what your customers respond to – whether it be exclusive sales, birthday discounts, or earning points.

Either in-store or online, you can also reward customers with a special gift at the point of purchase. This shows genuine appreciation and asks nothing of the customer in return.

Disguise the ‘sell’

Loyalty programs are of course designed to increase customer loyalty and keep people shopping with you, with the end goal to generate more sales and profits – but it should never appear that way.

Building customer loyalty is about making genuine connections and showing appreciation for continued business.

You should absolutely offer special deals and benefits to loyalty program customers, but only if it delivers real value to them.

An example of this is tier-based loyalty programs. This system can work well from a psychological perspective, as customers will want to maintain their current tier – or, if they are just shy of the next tier, spend a little more to reach that threshold.

However, the system can fail if reaching the next tier does not deliver a tangible benefit.

Similarly, consumers respond better to promotions that feel special and personalised – for example, birthday- based rewards emails have a far higher transaction rate and generate more revenue than standard promotional emails, according to research by Experian.

Create meaningful interactions

Encouraging a customer to be loyal to your business is a long and ever-changing process. All customers value different things so don’t be afraid to interact openly and honestly with them.

Ask what they want, give them a say in new products or ideas, make your interactions meaningful, and people will take a genuine interest.

The rewards of a loyalty program are a bonus and a way for you to thank them for their contribution.


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Simon Dell

Contributor • CEO of Cemoh

Simon Dell is co-founder and CEO of Cemoh, a Brisbane-based firm that provides marketing staff on demand. He specialises in digital marketing and brand management. Visit:

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