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5 keys to a customer-centric loyalty program

Tom Madden

Tom Madden

Loyalty programs have been around for decades, permeating almost every consumer sector. In fact, brands that do not offer programs now stand out more than those that do. The benefits of a program are obvious: they increase brand affinity, drive participation, and collect valuable first- and zero-party data that allows marketers to employ a more strategic and efficient approach.

But with programs becoming so ubiquitous, no brand wants its program to exist as just one of many in the “sea of sameness” that so often defines programs in a single vertical. And this challenge can be compounded when a brand is later to market within its category.

Launching, or most often, re-launching a program in a crowded market is a unique but exciting challenge. And it presents a tremendous opportunity for brands that are innovative and diligent in their approach to entering the fray. These five best practices can help guide brands that are new to the loyalty game launch a highly successful program:

1. Do your homework

It is important to take a good look at your competitors’ programs. For any program design effort, research to understand the mechanics, structure, and promotions of these competitive programs. However, be wary of creating a clone program. To truly bring value, your program design should offer something unique to your customers.

This deep dive into the competition will not only highlight strengths you may want to implement in your design, but also identify weaknesses or gaps in the competitive set. What are these programs missing, and can you bridge that gap? If every program in the industry follows a set structure, investigate ways that you can differentiate to offer customers fresh, new ways to earn or engage with your brand. Keeping your customer at the center of your program—and working to meet them where they are—will help your program stand out in all the right ways.

2. Be true to your brand

Far too often, brands launch programs that offer great benefits, points, prizes, and utility to the consumer, but stray from the heart of the brand’s purpose. These programs deliver a measure of success, but they don’t capitalize on the goodwill and shared values that customers associate with a brand.

This is an easy pitfall for a brand launching a program in a crowded space. Now more than ever, consumers crave authenticity from brands they love. Incorporating your brand and customers’ shared values into your program drives reciprocity and increases participation. Look for moments across the entire lifespan of the program, not just in the initial launch, to incorporate your consumers’ needs and wants into your program’s offerings.

3. Don’t forget your employees

As your brand rolls out its new program, it is mission-critical that your employees have a deep understanding of its ins and outs—program messaging, promotions, earning structure, differentiators, etc. Leaning into training in these areas can ensure your employees are an asset to your overall loyalty strategy. It is equally important to ensure your employees have a consumer perspective of the program by using it themselves, if possible. This will create true ambassadors of your loyalty program—singing its praises and engaging potential or existing members in more dynamic ways.

Strive to inspire your employees with the program, helping them see how the program makes their jobs easier, drives more business, or helps them serve their customers better—all of which can lead to gains for them as employees in the form of bonuses, larger tips, or commissions, and to top-line benefits for the business. The program shouldn’t be viewed as just one more thing they have to remember. It should be something they are excited to be a part of and share.

4. Be a leader, not a follower

Just as customers will be drawn to your new or improved program and disengage from your competitor’s programs, over time, new programs and offers will pop up that do the same to you. Be prepared for your competition to adjust their programs or offer healthy promotions in response to your program benefits. In turn, you should also be ready to adapt. Agility is the name of the game and an ongoing feedback loop that keeps you aware and poised to respond in real-time is key to program health and longevity.

Rather than focusing too heavily on waiting and watching the competition, be a leader and strive to set the bar. To start, acknowledge the true value that the right program can deliver for your business and get buy-in from key decision-makers across your organization. Followers will see these programs as a cost item, and leaders will lean into them as serious revenue generators. Leaders are mindful in choosing the right structure, creating compelling promotions, and amassing a healthy following—but they go beyond these basics by building programs that live out the brand’s values and purpose, embrace their customers’ and employees’ needs and wants, and respond to evolving expectations and market conditions.

5. "Set it and forget it" no longer exists

Ultimately, a loyalty program is a long-term play that requires organizational commitment. While there will likely be initial successes to celebrate, remember that a program launch is not a one-time event, but a constant and concerted effort to engage customers. Even the most seasoned loyalty programs must constantly acquire new members, regardless of their level of success. To ensure longevity, monitor the market and continue to innovate new ways to provide value and meet rising consumer expectations.

The real benefits of the program will accumulate with time and are highly dependent on marketers’ abilities to leverage the loyalty channel to drive business results. Over time—as your program powers a deeper, one-to-one understanding of your customer—a truly reciprocal, mindfully cultivated relationship between brand and consumer will emerge. This results in greater participation from your best customers—strong advocates for your brand—and measurable outcomes for your business.