How great customer loyalty programs stand out from the rest

starbucks' loyalty program

While all brands realize how valuable their loyal customers are, few brands are hitting it out of the park with their loyalty programs — just ask their customers: most consumers actively use less than half of the loyalty programs they’re enrolled in (via Survata).

(Statistics via Survata data, seen here)

Want to avoid a similar fate? Time to take a closer look at your program and make some critical adjustments. We’ve outlined 5 steps that, when used together, can guarantee a world-class, profitable loyalty program that your customers love. Follow these steps to stand out from the rest.


1. Keep it simple for staff 

While it’s clearly important that your customers love the program, it’s equally important to consider the impact on restaurant/shop staff when choosing a loyalty program. Your staff must be your loyalty programs’ #1 cheerleaders. You can send promotional emails ’til your customers’ spam inboxes are full, but nothing will promote your loyalty program better than enthusiastic staff members who can rally customers during their in-store experience.

To that end, staff must be trained on every aspect of the program. Not only should they know what rewards you offer and what behavior will grant these rewards, they need to know how your program works in YOUR system. If you have a POS integrated loyalty program or one that requires scanning, swiping, punching etc. then it is even more crucial that your staff understands the redemption process of your program. When staff fumble the loyalty experience, it diminishes the experience for your customer, and, if you have that extra step at the register, less efficiency in your checkout flow. Your program should not only be simple for your customer, it MUST be simple for your staff as well.


2. Have a sign-up strategy that works 

Now that your staff is dutifully directing customers towards your loyalty program, are customers actually completing the sign-up process? Often, loyalty programs fail because it’s difficult to get people enrolled. To remedy this, make your sign up flow as short as possible. Identify the minimum necessary information that you need to capture to be successful and seek out a program that mirrors your needs. The fact is, not all information about your customer needs to be gathered right away. Often times it is better to get them on the program, and then incentivize them further to enter more information about themselves.

More importantly, make sure that you’re communicating the value of your program to your customers in a way that resonates with them — offer a strong sign-up bonus (free side dish, free car wash, etc), and watch the sign-ups roll in. Each additional person who engages with your loyalty program is another source of data, so every sign-up is extremely valuable.


3. Make sure customers love — and actually use — the program

You can offer the best deals in town to your loyal customers, but if you make them jump through hoops in order to accumulate progress towards those rewards, you’re going to see terrible engagement.

Merchants must be cautious of the hurdles imposed by many traditional loyalty programs. Every extra step: swipe, scan, punch, etc… creates friction. It seems simple enough to make customers remember an additional plastic card, but the reality is that the average consumer is a member of multiple loyalty programs, and they’re not going to carry   Humans inherently find the path to least resistance, why wouldn’t your loyalty program reflect this fact? We’ve already said that earning progress and rewards should be simple. This is also true for feedback. No matter how good you are at serving your customers, if your loyalty experience is clunky and difficult, it will negatively impact the overall customer experience. This is why customer-centric businesses prioritize a seamless app experience (read about how Dewey’s Pizza built their app here).

4. Let data do the talking  

A loyalty program worth its investment can demonstrate — to the dollar! — the return it’s generating, as well as other critical operational data (customer lifetime value, NPS, etc…). Any less transparency is unacceptable.

Great customer loyalty programs collect every last piece of data possible about your customers purchasing patterns. Every marketing decision you make should be informed by customer data.

One of the most valuable ways that you can leverage the data generated by your loyalty program is through the ability to differentially target guests. This means that every customer receives a unique loyalty experience, tailored to their preferences, buying patterns, and even lifetime value (for example, VIPs get treated differently). Analog loyalty programs treat all customers the same (buy 10 coffees, get 1 coffee for free!) because, at the end of the day, they don’t know their VIPs from their occasional, low-value visitors. Utilize your data advantage to deliver the best possible experience to your visitors.

5. Gamify in order to engage and retain customers

Loyalty programs where customers earn progress towards a reward have the advantage of being structured like a game: earning points towards a goal is fun and exciting! Great loyalty programs actively engage customers every time they transact — Customers should be fully aware when they earn progress, and they should know how close they are to their next reward. They feel rewarded with every purchase, and they’ll come back more quickly and more frequently.  Incentives work wonders for motivating behavior: Presenting a goal provides an attainable feeling of accomplishment that motivates customers to shop more and spend more.