Loyalty programs are known for enhancing a business’s brand experience for over 80% of customers. But you need to ask the right loyalty program questions before you start creating your rewards program, otherwise it may not be successful. Luckily for you, we have all the answers you need.
So are you ready to make your loyalty program a success? Let’s dive in!
1) Goal: What do you want to achieve?
It is important to clarify the reason behind launching your loyalty program.
Answer these customer loyalty questions: Why do you want to start a customer loyalty program? What is the business goal behind your decision to start a loyalty program? List your answers and then rank them by their importance.
Here are some typical answers:
- Get more check-outs
- Increase the purchase frequency
- Increase the general basket value
- Activate ‘sleeping’ customers
Sometimes — especially at larger companies — you can’t easily answer these customer loyalty questions, and you may also need a business case to have approvals from all levels.
2) Numbers: How will you measure your results?
Now it is time to look at the numbers. A goal means nothing without exact numbers. Pay attention to the details.
Where are you now in terms of numbers? What would you like to achieve with your customer loyalty program? What is your timeline?
Creating a number-based plan for the next three months will show you the return on investment (ROI) of your loyalty program’s initial setup, and in the long-term, this will fuel and focus improvement.
3) Focus: Who is the target of your loyalty program?
According to Criteo, 65% of customers love loyalty programs. These programs have a huge target audience. However, do not gear your loyalty program to everyone. Why?
Because not all customers are equal. They want different things from you. A returning customer may appreciate it if you value their opinion, while a new customer might be more interested in discounts.
First, choose only one customer segment and then think about how you can use them to help you reach your goal.
Choosing only one segment also means that you may not make all of your customers happy. Once you have a polished strategy for one segment, you can target other customer segments.
4) Money: How much will you spend on your program?
Running a loyalty program costs money. The rewards are not the most expensive part. What can really burn cash is the time and effort that you spend building and launching your program.
And advertising isn’t even a part of the picture yet! If you have a loyalty program, then you should talk about it on every channel where your business is presented.
A successful loyalty program is built on a budget that calculates both the predictable and unpredictable costs. To learn more about budget planning, download our ebook.
5) Technology: How will you technically implement your loyalty program?
Crafting a loyalty program is not just a marketing or a business strategy challenge; it’s also a technical one.
If you build your own platform, it’s full of uncertainty, failures, and never-ending trials. You have to spend a lot of time figuring out what works and what doesn’t. On the other hand, choosing a loyalty program software can be a better option.
You will have more advanced loyalty logic. It will connect with your databases and systems so that you can fully integrate it with your marketing automation, online store, and POS. It may have everything that you want from smart loyalty logic, reward management, and reporting.
If you decide to use a loyalty management platform, you’ll require either an IT team or a system integrator agency to implement it.
6) Actions: What customer actions do you want to encourage?
The best thing about loyalty programs is that they encourage a wide range of customer actions. Purchases are important, but other customer actions matter as well
Do you want customers to recommend your most popular product to newcomers? Fill out the loyalty program surveys? Encourage long-standing customers to write reviews about purchased products by using the “Incentivized Reviews” feature. Do you want customers to spread the word about your company? Then reward them for doing so via the “Friend Referral” function.
You can reward your audience for working out, downloading your mobile app, reading newsletters, and even for tasting the latest beer specialty at your bars.
7) Incentives: Why will people do what you want them to do?
People will only do what you want them to do if they feel the urge. But offering free stuff and discounts won’t ensure real engagement. If customers get better deals from someone else, they’ll leave you.
That’s why gamification can be your greatest ally here. If customers can earn points, get rewards, achieve customer statuses, and see their ranks on a leaderboard, then they will be thrilled to play.
Why? Because it’s like a game. And people love to play games. Here are some resources to learn more about the topic:
- Reward planning worksheet for your loyalty program
- Tiered loyalty programs
- Tech options for gamification
- The definitive guide for loyalty programs (warning, it’s a 7000+ words guide, coupled with multiple videos!)
8) API: How will you connect your loyalty system to your up-and-running online store or POS?
You can purchase loyalty software or create your own program. Either way you will need to integrate it into your ecommerce system and POS.
For example, the points you offer for buying a product online need to appear during checkout. Or if the cashier scans the identifier (whether it be a plastic card, a Mobile Pass or a QR code on the phone’s screen), the discount will be applied through your POS – so the best if it’s tailored to the customer.
You or your system integrator can connect the loyalty management platform to your existing systems through pre-built integrations or through API endpoints – in fact, Antavo has both options.
9) Promote: How will you keep people engaged in the long run?
Loyal customers tend to have a higher purchase frequency and lifetime value, they spend more on brands they1re committed to. According to McKinsey’s survey on loyalty programs members are 30% more likely to spend more than non-members. But the fact that you have a loyalty program won’t attract customers. You have to inform, educate, and engage them.
So here comes the obvious: promote, promote, promote. Advertise your program with banners, newsletters, calls-to-action, Facebook ads, etc. Promote in your physical stores. The point is to make your program visible to those who matter.
10) Adjust: How do you optimize the loyalty program based on feedback?
So you’ve successfully launched your loyalty program; however, the work doesn’t end there!
Imagine that your loyalty program is a new product; a product that still needs to be polished.
Don’t hold back on searching for customer feedback and integrating it. If there are weak points, modify the existing actions or rewards as well as create new ones to keep it fun.
Running a successful loyalty program is always a learning-by-doing process.
Putting Your Knowledge in Action
If you ask these 10 basic loyalty program questions, before starting a rewards program for your business, you can expect a lot more in return. You will be able to see the bigger picture that includes your customers, what they like to do on your site, what they love to buy in your store, when they make their purchases, and what they do before purchasing a product.
Of course, you might have some lingering questions yourself. We at Antavo are always ready to tackle any topic regarding loyalty and customer retention. Book a demo, or send an RFP and we can start a discussion.
And don’t forget to download Antavo’s Global Customer Loyalty Report, an in-depth report that showcases dozens of statistics as well as future industry trends to help you navigate the world of next-gen loyalty programs.
Zsuzsa is the Chief Strategy Officer and Co-founder of Antavo. She has experienced Antavo grow from a startup into a market-leading, global scaleup for loyalty program technology, serving global brands and retailers. She was named Personality of the Year at the 2024 International Loyalty Awards, and listed by Forbes as one of Europe’s top 100 female founders in tech, Zsuzsa is a former journalist recognized by the European Commission.
