5 Tips to Create an Effective Customer Loyalty Program

The whole point of a customer loyalty program is to be able to retain customers that are valuable to your business, while also rewarding them for being a part of your success.

But how can the loyalty program you offer particularly stand out, especially when several other competing brands are also offering their own? Which factor or strategy could be the game-changer to make a customer loyalty program a sure hit with the customers?

Listed here are the top-most strategies used by some leading brands to make more customers engage in their loyalty programs-

Name It Right

Ever heard of the saying ‘First impression is the best impression’? First impressions are very important, and so is the name of the customer loyalty program. Words play an important role in influencing the customers’ decision as well as their loyalty.

Not only should the name of the loyalty program spark curiosity and interest among the customers and capture their attention, but it should also be unique to the brand to stand out from various other loyalty programs offered by competing brands in the market, or the ones the customers are already a part of.

For example, Sephora’s Beauty INSIDER and Tarte <3 Rewards programs have names that give customers insight on what they would get out of the loyalty program, but also incite an interest in knowing more about it. The name ‘Beauty  INSIDER’ hints at the exclusive offers and perks that members of the customer loyalty program would get, which is what makes it so alluring to people.

A Deeper Meaning

Most customers are cynical about loyalty programs as they think it is a ploy to make them spend more. They’re not entirely wrong to tread carefully, as most businesses do focus on the profit.

Although profit is one of the key aspects to customer loyalty programs, gaining loyalty and establishing a personal connect with the customers is much more important. Therefore, it is important to make the customers see that there are perks to being a part of the loyalty program.

For example, having a membership on Amazon Prime costs about $100 per year, but it is much more than just speedy deliveries and waiving shipping costs. Having a Prime membership also gives the customers other convenient perks like free TV shows and movies streaming, music, and also free delivery of grocery. This makes the program much more interesting for customers to join.


Offers always seem much more interesting when there’s an added bonus, don’t they?

That is why partnerships prove to be an extremely effective way, not only to retain your loyal customers, but also to grow your business. Another advantage of partnerships with other brands for a customer loyalty program is that businesses gain an understanding of their customers’ lifestyle and preferences.

The next question that needs to be raised is what companies can you partner with for the loyalty program? The answer to this comes from understanding what your customers like best. In the end, the goal is to provide a rewarding experience for your loyal customers, even if the partner brand is not related to your business.

American Express offers a loyalty program, Plenti Rewards, to its huge base of customers, since points can be earned and redeemed with every purchase using the card, across multiple partner stores. Plenti Rewards lets the customers earn points with every transaction they make at Macy’s, AT&T, Hulu etc. Even for companies like Macy’s who already have their own customer loyalty program, a partnership helps to tap into a much broader base among customers.

Rewarding Non-Monetary Actions

Customers like to be assured that their loyalty is being rewarded beyond just the purchases they make. What could be the best way to go about this? The answer is—by rewarding other, non-monetary actions by the customers.

Certain brands offer the customers rewards for user-generated content such as blogs, ratings, reviews, photos and video tutorials. Not only does this keep the customers engaged with the brand, but it also helps the brand to gain social validation through authentic reviews given by real people.

One such example is beauty and skin care brand Tarte’s customer loyalty program, Tarte <3 Rewards. Customers who are a part of their loyalty program get rewarded with points for uploading make-up tutorials and photos of themselves using Tarte products.

This way, brands can let their customers know that their value extends beyond just transactions, and also helps the customers maintain their point-gaining momentum in between the purchases they make. Rewarding customer actions other than the purchases they make is great for maintaining their loyalty to your brand.

Providing Multiple Opportunities For Customers To Enrol

Once a customer loyalty program has been launched by a brand, customers should be reminded of it, every step of the way. Repeatedly reminding your customers about the benefits of joining an exclusive customer loyalty program increases your chances of gaining more loyal customers for your brand.

If customers spend a certain amount of money shopping from your online store, let them know how many points they can earn by spending a certain amount of money. This method is used extensively by airlines and supermarkets. Airlines often give their customers a certain amount of frequent flier miles that can be used towards their next flight, which makes loyal customers enrol in reward programs that will earn them advantages with every flight they take.

Supermarkets also like to remind their customers at check-out counters about their loyalty programs that could earn them points, which can eventually be redeemed for a discount with the next purchase they make.

This helps your brand to put itself ‘out there’ and gain loyal customers who will come back to your brand to spend more, due to the initial benefits offered to them. It helps brands that are fairly new in the market gain loyal customers in an effective manner.

Bottom line?

Customers are always looking for something new and exciting to keep them ‘hooked on’ to the brand. Also, since it is much more cost-efficient to maintain the existing pool of loyal customers instead of actually gaining new ones, brands need to apply new tactics to keep customers on their toes.

The same point-tier-reward system would get monotonous if new, innovative methods of keeping your customers interested are not implemented every now and then. That is why,it is very important for a business to come up with new strategies that can effectively let their customers know that their loyalty is extremely important to their brand.

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5 Tips to Create an Effective Customer Loyalty Program

by Shubhangi Srinivasan