How to Build Customer Loyalty Programs That Stand Out

In short, a customer loyalty program rewards customers for being, well, loyal customers! The aim is to foster repeat interactions and have your customers coming back for more by offering perks and rewards. A coffee shop might offer your 10th coffee on the house or an airline might offer air miles which you can exchange for a flight ticket. 

Loyalty programs are a great way to engage your client base and overcome customer pain points. They can be what sets you apart from other companies. In an over-crowded marketplace, customer loyalty programs are one the smartest ways to engage customers. Personalization of your loyalty marketing efforts will put you miles ahead of the competition.

What are some benefits of a customer loyalty program? 

A customer loyalty program can help you to check off items on your customer onboarding checklist. Improved customer retention rates and repeat sales are not the only benefits of a customer loyalty program. Other benefits to your company include: 

• Geater cost-efficiency - it’s more cost-efficient to keep customers than having to constantly generate new ones
• User-generated content - can give your company an edge if your loyalty program encourages this
• User reviews - can be incorporated into your loyalty program and act as an advertisement for your business
• Increased customer referrals - you can reward your customers for referring friends and family with different perks and rewards

Not all loyalty programs are created equal

Only 18% of customers engage with all of their loyalty programs, which begs the question for many businesses - how do we make our loyalty program stand out from the crowd? 

1. It’s all in the name

Well, almost all. A name can excite, disgust, or leave people indifferent. And that last one is not what you want. A good name should attract your customers, seducing them like a melt-in-the-middle chocolate cake.

You can take inspiration from these successful loyalty program names:

• Starbucks has My Starbucks Rewards and uses “stars” as currency
• Sephora has Beauty Insider, with three point-based tiers – Insider, VIB (Very Important BeautyInsider), and Rouge
• The North Face has an XPLR Pass program with different paths to redeeming points
  

Extra points if you can come up with something more original which also engages the senses. 

That said, sometimes an old classic like “points card” will also do the trick. 

2. Develop a story around the program

It’s no longer enough (was it ever?) to simply offer people monetary discounts. Most people can do basic math and quickly figure out what they’re saving. But that on its own is a bit stale. Yes, the savviest of your customers  will care about this above all else. They’ll have already done their research and just want the numbers. 

But they’re on one end of the bell curve. Most people will be at the top of the curve on the axis ranging between “more interested in story” and “more interested in numbers”. 

A compelling story can be combined with a theme, like Halloween, with a catchphrase like “win some spooktacular treats!”. If the company makes chocolates, for example, customers might imagine they’ll receive some delicious, Halloween-themed chocolates. If it’s a makeup company,  they might get eyeshadows in Fall colors or a pumpkin-flavored lip gloss. 

You’ll want to get your customer service on point so that your employees can give an on-theme,, as well as an on-brand, service experience for your customers. 

3. Make it fun 

This goes back to creating an engaging narrative around the rewards program. Most customers don’t want a mathematical calculation about “X money spent” equating to “product with Y value” being rewarded. 

Another way to make it fun is to turn it into a game or competition - and we’re not talking about the Hunger Games or Squid Game. There are many ways to add a gaming element into your rewards program. For example, competing in challenges and playing games could be rewarded with more points for the customer which they can then use to receive a discount. 

This keeps your customer engaged with your app, website, or social media and incentivizes customers to spend more money on your product or service. And of course, making it fun directly affects the reward center of the brain which has your customers coming back for more.

4. Focus on values

The most successful salespeople build trust with their customers. With climate change and diversity being at the top of many people’s minds, it’s a good idea, now more than ever, to incorporate these values into your loyalty program. Your rewards program should have an eco-friendly aspect to them, such as recycled packaging, or the promise to plant a tree for each purchase made over a certain value. 

Images featuring people should be inclusive, diverse, and representative of your values. Rewards earned should feel rewarding, not icky, and out of touch. And a good way to build trust and engage your customers is to appeal to their inner values.

5. Encourage all kinds of actions

You’ll want to learn how to systemize your business in order to take advantage of the large number of customer engagements. 

Because purchases don’t need to be the only type of action you reward. You can reward clients for sharing content on social media, creating content and tagging your brand, or watching an ad. They could also be rewarded for referring a friend, completing a survey, or leaving a review.

Strategic social media retailing is likely to benefit your company through brand awareness, so you’ll want to encourage a variety of actions as much as possible. 

6. Points

You can offer loyal customers free lattes,  chances to win a car,  redeemable points, or more. Many grocery stores will offer a loyalty card where points are assigned a specific monetary value. This is a great way for people to know exactly what they’re getting in return for their loyalty. 

When it comes to more practical things like groceries and air miles, it’s useful for people to know the math behind the program. These are examples of loyalty programs where numbers might be more important than the story. That doesn’t mean that groceries and flying can’t be fun - it just means that the points aspect of the loyalty program should have a clear monetary value assigned to them so that virtual customer service isn’t flooded with queries about the program. 

7. Offer many different types of rewards

Freebies for customers are always a fun reward, and they can come in all shapes and sizes - for example, a free tote bag is a classic with The New Yorker. It looks good to the customer and it’s also free advertising for the newspaper. 

You can also offer experiences, like free tickets to see a musical or a free drink at a popular bar. It doesn’t have to be something you physically hold on to - it can be something you consume or experience. 

Many customers would also love the option to donate to a charity of their choosing or to plant a tree (or ten!). Tentree plants ten trees for every item purchased, and many other companies have hopped on board with that trend. Ecosia, an ethical search engine, plants a tree for every 40 or more searches, and allows users to keep track of how many searches (and trees planted) they’ve made. 

8. Consider teaming up 

Partnering with another company gives you the ability to offer more interesting rewards and also increases brand awareness. This is also a good lead-generation technique. If you own a coffee company, for example, you can offer a bag of goodies from local artisans as a reward for customer loyalty. The other business owners might be willing to give you free samples of their products to increase their brand awareness amongst your customers. It’s a win-win.

Depending on how you choose to collaborate, you might want to review your team task management strategies to ensure a seamless partnership.

Rewards should be rewarding

Whether the reward is practical (such as points to redeem at a grocery store), tasty (a free drink or sweet treat), or fun (free tickets to an event), they should above all be rewarding. They should appeal to the values of your customers. 

And customers should be rewarded for a variety of actions, not just only for direct purchases.