Written by: Mrudul

What constitutes a good loyalty program?

Your customers want to know that they are special. They might be your 33,475th customer, but that doesn’t mean you can take them for granted. If you do that, you are likely to see a cascade of customers leaving your business. Having a good loyalty program is a good way to tell your customers that

Your customers want to know that they are special. They might be your 33,475th customer, but that doesn’t mean you can take them for granted. If you do that, you are likely to see a cascade of customers leaving your business. Having a good loyalty program is a good way to tell your customers that you care about them and you are ready to offer them ‘more’ to show how grateful you are for their business.

A loyalty program is made to ensure that you get repeat customers and increase the CLV (Customer Lifetime Value) for your business. Many businesses these days forget about their existing customers and are always on the lookout for more leads. With the help of a loyalty program, you can ensure that you will not be like other businesses.

Let us look at what constitutes a good loyalty program:

    1. Is easy to participate:

      No matter what kind of rewards you promise, if being a part of the loyalty program is confusing for many customers, you can certainly expect it to be a failure. You should not expect your customers to spend hours reading up on the rules just to be a part of it. The loyalty program should be easy to understand and easy to implement.

      Do not ask for a lot of details to sign up either. It can be a turn off as most of them will not be comfortable sharing their personal information. Let the customers know what is expected of them and list them down in the initial process itself so that there is no confusion. The customers should be aware of the kind of rewards they will get and what exactly is required to achieve that.

    2. Interesting rewards:

      The success of your loyalty program depends on the kind of rewards that you offer. It should be something that is equal to the kind of effort that the customers take to be a part of your loyalty program. The rewards can be anything- discount, consulting calls, free product, exclusive access, etc. But the ones that really interest the customers are monetary rewards. While you can even offer merchandise or swag to make your customers feel as if they are a part of the brand, try to add a monetary angle to it.

    3. Find an emotional connection:

      Customers become a part of loyalty programs or businesses and stay with them when they have an emotional connection to the brand. They really care about the kind of experience they get from you during each interaction. Your customers will feel a connection with your brand when they know that you care about them, the world, understands them, makes them feel special or when they have an audience like yours. In fact, customers these days will not even mind switching to a brand that cares for a cause that they deeply feel about.

    4. Use data wisely:

      A good loyalty program should be able to provide valuable data that can be useful for your marketing strategies in the future. Based on the behaviour that your customers expect as a part of the program, you should be able to gather insights that can help you make business decisions. The data should also help you come up with new products or services, that’s the kind of power that a good loyalty program can offer. A good loyalty program will be able to help you identify the effects when there are changes in price, show how receptive customers are to new products, features, and so on. When used rightly, it can help you understand the pulse of customers.

    5. Cohesive branding:

      The rewards that customers get as a part of your loyalty program should be an extension of your brand and not something that you came up with little thought. If you are a brand that is into selling fitness apparels, a reward could be protein bars, but if you offer strawberry cake instead, it might be confusing and a put off for your customers. A luxury brand should ensure that their loyalty program has elite, posh and sophisticated written all over it. Otherwise, it will end up diluting the brand. Align the loyalty program with your brand identity.

    6. Create a repeatable program:

      If your customer is going to get the rewards of your loyalty program only when they renew in the first year, then they are not going to be enthused enough to renew the next year. Also, if getting a reward requires a lot of effort, then it will reduce the likelihood of someone participating in it. Why would someone spend a lot of their time and put in effort if it is going to take a lot of time to realize the rewards?

      Ensure that the program is repeatable and easy for people to complete. Do not make it a time consuming process. Tailor your customer strategy to ensure that people can see instant rewards that will bring them closer to the brand with few steps. Programs that have a repeatable process have higher success rates, and it will also keep the participants interested in it.

    7. Make sure the program is reciprocal:

      Finding the right mix of strategies for your loyalty program can take a few tweaks, and a lot of back and forth. But do remember that it is a great way to increase customer retention. As a part of the loyalty program, your customer should get immense value, so should your business. The value for your business can be in the form of anything- increased sales, increase in retention, increase in CLV, more referrals, and so on. If there is not much in it for the business, then the motivation to keep it running reduces. It should be a win-win for both parties.


We hope the above examples will help you with the right amount of information and inspiration to build a loyalty program. The success of your loyalty program depends on a lot of factors falling in place. You should also have a deep understanding of your brand and your customers. Armed with this information, you will be in a position to brand the loyalty program properly. A good loyalty program will be able to reduce the marketing spend for your business as more of your existing customers will stay with you.

If you are looking for ways to build a loyalty program that will convince your customers to stay with you, 99minds will be happy to set one up for you. Get in touch with us and we will show you how your business can be helped with a stellar loyalty program.