Building Customer Loyalty Programs That Work

1. Connect customers with unexpected surprises.
2. These perks should be tailored to the individual.

Most customers prefer a VIP experience. A 2020 survey found that free shipping and discounts are considered a low bar. "Early access to sales" and "early access to new products" were most valued, followed by "tailored offers and recommendations."

A loyalty program that is just a collection of coupons is more harmful than not having a program as it reveals your low regard for your customers.

A loyalty program should foster value year-round.

• A baseline inclusion is giving a perk on your customer's birthdays. View it as an opportunity to interact with your customers. 
• Perhaps give them a 50% off coupon together with a fun birthday note. Or maybe provide exclusive access to content with a paywall or offer a voucher for a free item from your store.

• Personalised. Your program should not feel like a default for all customers. Instead, the program should feel tailored to each customer.
• Unique. Ensure your programs looks and feels distinct.
• Accessible. Build your program, then make it easy to access. Even loyal fans will lose interest if they have to complete too many steps.
• Rewarding. Instead of reverting to the collection of coupons, consider free shipping, an extended window for product returns, or a discount on their birthday.
• Consistent. Some loyalty programs start with enthusiasm, then fizzle out. Ensure that your program is consistent.

Suitable investments at the right time will always be beneficial. Balance the offerings with the cost of the program to ensure the value is symbiotic.

Your incremental revenues - your incremental costs = loyalty program cost.

The formula is based on the projections for customer response to the program. The incremental revenues include increased customer referrals, decreased turnover, and higher sales.