Building a Successful Loyalty Program

By : Mike Snow

Maximizing the retention of your most profitable customer should be the primary goal of any loyalty initiative. To achieve success, the following elements must be considered:


Keeping it Simple.  Your program should be easily understood by your customers as well as your staff. Your customers should clearly know what is expected of them.   Your employees must to be able to explain the details of the program.

Precise Segmentation.  A “one size fits” all approach will not work.  Accurate targeting in terms of demographics, interests, reward offers, and communications is necessary.    Concentrate on the relevance to the customers you are trying to influence and recognize the differences among your customers.

Perceived Benefits.  Offered rewards must  have a strong perceived value in order to
keep customers coming back.   Your customers should feel they are valued and are being recognized.  The rewards must be obtainable.

Analytics.  Use transactional data to develop comprehensive customer profiles and to discover customer behavior patterns.  You should be able to easily answer such questions as “which promotion was the most effective?” and “what offers appeal to which customer segment?” Knowledge is power.

By applying these principals, you will capture and cultivate your most profitable customers.  You will build relationships that are driven by an understanding of the customer needs.  You will succeed.



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