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How to Build a Loyal and Engaged Customer Base with Loyalty Programs

Kristie Wright | July 31, 2023 |

How to Build a Loyal and Engaged Customer Base with Loyalty Programs

There isn’t a restaurant, coffee shop, pizzeria, or retailer that can survive in the long term without customer loyalty. You need your customers to appreciate what you offer and give your business positive feedback. 

Here’s what you need to know about encouraging customer loyalty and keeping your customer base engaged and excited about what you have to offer.

What is a Customer Loyalty Program?

One of the best ways to build customer loyalty and encourage repeat sales is to set up a customer loyalty program. This is essentially when you offer rewards to customers who buy from your business on a regular basis.

Loyalty programs come in many different forms. You can offer freebies, rewards for a certain number of purchases (such as cups of coffee), reduced rates, cash back on sales, early or exclusive access, and so much more. When you reward customers for purchasing from you regularly, you’ll earn their loyalty and get them coming back time and again. What’s more, they’ll recommend your brand to their friends and family.

A personal recommendation is one of the best kinds of marketing to new customers any business can hope for.

Steps for Building a Loyalty Program

So, how do you go about building a loyalty program for your customers?

1. Choose a System that Works for Your Brand

The first step is to ensure that the program makes sense for your business. You can go for points that lead to rewards or cash back on purchases. You can team up with other businesses to offer special deals. You can have loyalty tiers that entice people to engage and spend more with your business. Gamification is another great option, as well as donating to charities on behalf of your customers.

It's important to look at the way your customers will interact with the program. Will they be happy with a mobile app or a card they have to carry with them? What kind of reward will work best for their spending and shopping habits?

2. Define the Goals of the Program

The primary goal of any loyalty program is obviously to build loyalty within your customer base, therefore, increasing your sales. However, you can go a lot more in-depth than that and define goals that will help you to shape your loyalty program.

For example, your business could be trying to bring in more customers. If this is the case, your loyalty program should include a referral system. You can also include features where customers compete against each other. Doing so encourages your customers to get their friends and families signed up too.

3. Make it Easy to Join the Program

Remember that the more difficult it is to join, the lower your membership is going to be on your loyalty program. If you’re getting people to download an app, make it easy to find on the app store. You can do this by having QR codes for downloading it readily available in-store and on your website. Then, make it a fairly simple process to create an account and get started.

If you’re getting people to sign up in-store, don’t make the form exhaustive. Start with the basic information that you need to get the account up and running. Then get more in-depth as the customer’s journey happens within the loyalty program.

Use Personalization to Increase Engagement

Personalization is a key area in marketing in today’s world. People want to feel like you’re talking directly to them; like you know their story. It’s never been easier to do this too, thanks to the world of online profiles and tracking online movement. When you have a digital loyalty program, you can go even further with your personalization.

When you know details like where customers live and what they frequently purchase from you, it becomes simple to put together personalized special deals and promotions. You can also run those deals through your loyalty program, making your members feel extra special.

Offer Value-Added Services

You don’t have to only offer discounts or money back on your loyalty program. In fact, it’s better to offer a variety of benefits to your customers. If you can find a way to include value-added services that are only available on your loyalty program, you’ll be giving your customers plenty of incentives to sign up and stay loyal.

A great way to do this is to offer a service related to the products you sell. A restaurant can give their program members access to their recipes, for example. Another way to do this is to team up with other businesses and offer cross-promotions that people can only get via the loyalty program. Maybe you can help them to invest in stocks if your business is big enough.

Link to Charities and Social Responsibility

Consumers are actively looking to support brands that have a strong social stance and promote ethical practices. It’s great to include this in your loyalty program. Have the option to donate points to specific charities or match their points earned to donations made by your business. Another way to do this is to ask members to round up their purchases to the nearest dollar. Those extra cents will then all be added to a charitable donation.

When you add in giving back to your loyalty program, you’re joining forces with your customers in a drive to do good. This makes everyone feel better about life, and it fosters a sense of community with your customers.

Build Loyalty in Customers by Giving Back to Them

A loyalty program does mean giving away money and goods, but it also means rewarding people who buy from you regularly. This keeps them engaged with your business and happy to keep buying from you. 

Remember, it’s far more cost-effective to retain customers and keep them coming back for repeat business than it is to continuously bring in new customers. What you spend on your loyalty program won’t be anywhere near as much as you’ll spend on advertising to get new customers.