The Do’s and Don’ts for Customer Loyalty Schemes
As a retailer, you have a lot of decisions to make regarding what you will be offering your customers, particularly in the hope they will be enticed to use your service again and again. One of the incentives that you might consider is to offer a loyalty scheme.
The benefits of a loyalty program for your business include the way they can help increase customer loyalty and entice someone to sign up to use your service or purchase your products for the very first time. But offering a loyalty program doesn’t automatically mean your business is going to be in the right place as soon as you implement it, there are some do’s and don’ts that need to be followed.
Here is a selection of the important factors to consider when implementing a loyalty cards program.
Do Make Sure Rewards Are Attainable
If you set reward goals for a customer each time they use their loyalty card and they’re almost impossible to reach or are impossible to obtain, it’s not going to look good for your offer. If you pitch the reward thresholds in a way that is possible to reach, but far too high, this is also not going to go down well with customers.
In fact, the loyalty scheme would become a thing of annoyance and frustration and there is a good chance customer will complain if they decide that the set up is unfair. This means that something that was supposed to be a positive rewarding system for the consumer becomes the complete opposite. Potentially putting them off of using your service or buying your products in the future. With the right attainable rewards, you can improve your customers’ satisfaction and attract new customers to your business.
Do Keep Things Simple
It might be tempting to dream up a flashy rewards program. But, almost all of the time, it will be advised to avoid doing this. If you make something too complicated you might put off the customer and they will end up thinking that the reward is not worth the bother or effort. Keep things simple, clear and to the point. That way the loyalty program can be used by as many people as possible. If someone understands how it works they’re more likely to keep using it. Always be clear regarding what steps are required to gain each reward.
Do Provide Loyalty Cards That Look Good
The loyalty cards that are offered to customers should look attractive, enhancing the chances of the consumer wanting to use it. But they should also stand out, otherwise, if it looks too much like another store card, or just does not stand out much, it might get lost in a wallet or purse with the owner forgetting they have it!
Do Deliver a Competitive and Sustainable Advantage
Loyalty programs are a competitive market. Why is this? Because they create customers who are not only loyal to your business but will actively promote your business to people they know. That’s why you must keep on top of your loyalty card program.
You need to keep your program fresh by offering regular new rewards to maintain a great relationship with your customers. Try to offer unique rewards and see what is popular with your customers, replicate what’s working and ditch what isn’t. And remember, try to surprise your customers, keep them on their toes by offering new and exciting rewards. Finally, ensure you are aware of what your competition is offering, to make sure you are still competitive.
Don’t Promise What You Can’t Provide
This may sound obvious, but when you find yourself caught up in doing whatever you can to bring in new customers and keep your existing ones, it can become easy to fall into traps you might have otherwise avoided.
Only advertise rewards that you can 100% provide your customers as part of your loyalty program. Offering them a freebie in exchange for their collected points will likely help a person feel positive towards a brand, but if they apply for said reward, and it can’t be delivered, perhaps because of a massive response to the incentive, that customer is only going to be disappointed and put off the brand.
The first thought the customer in question would likely have is that your company should have made sure they had enough of the reward to meet the demand. They’re unlikely to sympathise with you much if you run out of rewards when they’re ready to spend their hard-earned points!
Don’t Offer Rewards No One Wants
Just because you have access to a good deal on a certain item doesn’t mean you should automatically make it a reward for your loyalty scheme. Make sure it’s something that your customers would be inspired to save up points for. If they look at the potential rewards and don’t find any that are worth their time they’re not going to bother signing up to your loyalty rewards program, it’s as simple as that. This is why it’s a good idea to offer a wider range of rewards, so you’re appealing to a wide range of people.
Don’t Be Dishonest
Your rewards system should be fair and offer something of value to the customer. Don’t try to dream up a system that doesn’t actually reward its users, and maybe even does the opposite and leaves them worse off. Customers aren’t silly and will see through these kinds of schemes. Make your loyalty system offer extra value and use it as a way of saying thanks to the customer for being loyal to your brand.
Don’t Ignore Customer Preferences and Behaviours
To get the most out of your loyalty card program, you need to tailor it for your customers. If you ignore what your customers want, they won’t use your loyalty cards. But how do you know what your customers’ behaviours and preferences are? By regularly analysing your consumer data, you will find out what they’re interacting and engaged with; this is what you need to promote. You also need to find out what they’re not interested in, there could be many reasons for this in retail. Seasonal changes have a big effect on what your customers want. Analyse what your customers want and tailor your loyalty program to fit these demands, that’s how you will create a popular and profitable loyalty scheme.
Don’t Get Spammy
Sure, you want your loyal customers to know you appreciate their loyalty. You also want them on board with your new loyalty program. And you need to promote it to get it off to a good start, and if people don’t know about it they can’t join. So yes, good promotion is important. But don’t go overboard with your advertising. Promote respectfully. Never spam people’s inboxes or your website space with details of your new scheme, otherwise, there is a good chance you will put them off your business.
A well thought out loyalty scheme is a good idea for retailer’s and can provide genuine benefits to the customer as well as the brand itself, especially in the way it can help increase customer loyalty. However, it’s better to have no loyalty program than a bad one, as a poorly thought out system could have the undesired effect of putting customers off your brand, so you must develop a loyalty scheme that is liked by as many of your customers as possible and one that genuinely feels rewarding. But how do you do this?
Our team at Reward-It has years of experience working with businesses and providing them with the tools necessary to create an excellent loyalty program. We can help you set up loyalty card schemes that reward your customers and increase your profits. To find out more, get in touch with our team today.