Should You Start a Loyalty Program?

September 27, 2023
Should You Start a Loyalty Program?

Customer loyalty programs can be a smart business decision to help you earn more repeat business. And they’re not uncommon – a study by Colloquy found that the average family in the U.S. is a member of more than 29 different customer loyalty programs, though they are typically only active in about 12 of those programs.

Does this mean that starting a loyalty program is pointless? Absolutely not.

Customers are active in loyalty programs that are built to benefit them, so if you can create a loyalty program that does just that, you will be on your way to earning more lifelong customers.

Should you start a loyalty program?

If your business model supports it, you should absolutely start a customer loyalty program. It’s an added incentive for customers to continually do business with you – even if they wouldn’t have continued to in the absence of a loyalty program. If your program is planned well enough, you will also attract new customers who want to take part in earning perks from your program.

A customer loyalty program can be as simple or creative as you like. If you decide to create a customer loyalty program, keep the following tips in mind to ensure you’re not wasting your time on a program customers will ignore.

Starting a loyalty program

1. K.I.S.S. – Keep It Super Simple

Say this 5 times fast: Complex programs confuse customers. The only way to build a great loyalty program is by keeping things super simple and making the rules of the program easy to understand. Think of loyalty programs that let customers earn a set number of points for every dollar spent, or airlines that offer free flights for frequent fliers. It doesn’t get much simpler than that – you do this, we do that. That’s why customers enjoy these types of programs.

2. Build it for the customer

Loyalty programs will indirectly benefit you, but their obvious benefits should be for the customer. If you build a loyalty program that is tailored to the needs of your customers, they’re sure to get on board and make good use of it. But if you build a program that offers little benefit for the customer, they’re going to go elsewhere.

3. Make it easy to join

Your customer loyalty program has to have a low barrier to entry if you want a considerable number of your customers to participate. Make it easy for customers to join your loyalty program by creating a tasteful pop-up notification for users on your website, including information about the program on receipts, promoting the program on social media and your blog, or including a sign up button in the checkout process. If it’s easy to join and there are valuable benefits to joining, what reason would your customers have to not join?

4. Set up restrictions and limitations right away

Don’t get stuck dishing out thousands of dollars in free products or prizes beyond what you intended because you forgot to set up limitations for your loyalty program. Create these clauses and restrictions right away and be up-front about them to customers. If there’s a cutoff of any kind, expiration dates for points, limitations on products, etc. – put that in writing and make the information available to your program members.