Loyal customers are a brand’s biggest and most valuable asset. Loyal customers are real-time fans, an authentic source of revenue, and natural brand ambassadors.
If a brand has a creed of loyal customers, the brand needs no promotion or advertisement as such except some periodic “push. It grows with time and time makes the brand more stable.
The customer loyalty program is part of a broader business strategy. Its broader aim is to strengthen brand loyalty and at the micro-level, it targets at increasing the footfall in the business premises or increasing motivated traffic on the site.
The customer loyalty program includes several categories:
- Point-based loyalty
- Tiered loyalty
- Paid loyalty or Subscription-based loyalty or membership-based loyalty
- Partner loyalty or coalition loyalty
- Game-based or Competition-based loyalty
- Value-based loyalty
Designing a customer loyalty program is not necessary, i.e., a business can still run smooth sailing and revenue can still flow but if a loyalty program is designed, it should be transparent, achievable, and enjoyable. All these three aspects are important. Interestingly, customer loyalty programs fail due to a lack of one or more of these three aspects.
- If a loyalty program has no apparent value then it’s sure to fail – Here apparent value means the customers or prospects do actually understand the relevance of the loyalty program. The apparent valueof a loyalty program will be one of the attractions to the customers and new visitors.
- Realistic targets keep the interest of general customers high – Here we are discussing general customers. On the individual scale, general customers don’t buy in high quantities regularly yet these groups of customers when summed up creates the biggest chunk of revenue (if infrequent customers or what we generally call flying customers don’t create an attractive revenue then you need to ponder over your marketing strategy, we will discuss the matter in some other article)
- Customers want the quick conversion of whatever they achieve – If they need to wait for long to find the material value of whatever they win through the loyalty programs then the loyalty programs are useless. Quick conversion (time period) makes the customers enthusiastic.
So, ask them or brainstorm keeping in focus the following points:
- Is the loyalty programme we are planning will add value to the customer experience?
- Is the loyalty program we are planning will be all-inclusive, i.e., does it include every customer?
- Does our loyalty programme flexible, i.e., can we change or stretch it a bit for broader customer engagement if needed?
- Does the loyalty programme we are planning will meet our target?
Customer retention is more important than obtaining new customers. Top brands of the world in any field are top because they are customer-oriented, which means, they know how to retain customers and how to keep customers engaged.
- The aim of a customer loyalty programme is customer retention.
- A state-of-the-art customer loyalty programme can also bring new customers.
If both these happen, that is great. Your loyalty programme will be a milestone in the industry.
If not, never mind!
The first one should be fulfilled – it’s the reason for which you wanted to design a customer loyalty program.