How to Build Customer Loyalty Programs?

in: Customer Experience,Growth

Keeping existing customers on board is not an easy task in this competitive world. To be successful, you need a mix of marketing strategies and a solid customer loyalty program to retain your customers.

Saying is easy, but the point is: “How do I start?”

The answer lies in the core aspects you should consider when running a customer loyalty program. 

And this article will show you what they are.

Let’s get deeper into the discussion around building a good customer loyalty program. 

Stay tuned!

Building Customer Loyalty Program

Developing and Understanding Customer Service Channel  

You need to understand the pain points of your customers before developing the customer channel. In this instance, imitating another loyalty program or just focusing on a single idea won’t work. Customer service channels are the gateway through which the customers can get insider news and information about your brand. 

A frustrated customer will look for ways to connect with you. And it is up to you to provide them with every possible channel for communication. In a customer loyalty program, communication is a must. 

You can deploy channels like tele-calling, online chats, chatbots, email, user-reviews, Local Stores, and online community. All these mediums are meant for initiating communication between the brand and the customer. 

Building a community is a good way to understand your customers and develop your loyalty program

Choose your Target Customers 

The harsh truth is that a customer loyalty program is not meant for every customer. You should choose your target customer that you want to provide the benefits of your loyalty program. 

And every single customer that visits your store will stick with you. Some will and others will not, no matter whatever benefit you provide to them. So, it’s essential to handpick your customers for the program. 

Be careful to select your customer for the program (Photo by Icons8 Team on Unsplash)

This must be your initial approach. For this, ask yourself a few questions like: 

  • How much revenue does a customer provide to the company in a year?
  • What is the frequency of purchasing products?
  • How much profit did you earn from a customer?
  • What are your Payment Methods?
  • Can you define the satisfaction levels of the customer?
  • Is there a scope to increase business correspondence with them?

These are the questions that you should answer before choosing your customers. Those who fit into the category must be included in the program. 

Enhancing Customer Interactions

The State Global Customer Service Report of 2016 has mentioned that 60% of the customers will stop using your products if they have to experience even a single instance of bad customer service. 

Yes, customer service is vital for your business. More important than it is to maintain this interaction at all times. These activities will help you build credibility in the eyes of the customer

You must value your customers, and not only this, make them recognize that you value them. Appreciation is the word. Appreciate your customers, help them realize that they are important to you

For this, you can use a good Customer Relationship Management platform that records all the previous transactions and conversations with a customer. A CRM is best to build a personal rapport with each customer. You can also add notes and pointers for each customer.

 Customer Rewards Program 

While building your customer loyalty program, it’s vital to focus on emotional connection. The customer that has an emotional connection with your brand provides 4x more lifetime value to your brand than others.

Rewarding your customers is showing your appreciation for them and helping them realize that you value them as much as they value, if not more. If they are spending more and buying your products more than others, you should also give them something in return. 

Although, this step will come a bit later when you have some data in your pocket to analyze which customer is relatively more valuable than others. But, in no instance, skip it. Prepare your rewards program well in advance and also let your customers know about the program. 

Set your Goals and Measure them: 

There is no better way to analyze the importance of your customer loyalty program than measuring it with the help of a few goals. You can set goals like:

  1. Customer Service Complaints handled in a day or something like time taken to attend to each customer service call. The goal should be to take less time to solve customer problems. 
  2. Increasing the frequency of purchases made in a fixed time period. If at present, your customers are purchasing twice every month, increase it to three times a month. 

Using a CRM will be good for measuring your goals, or you can also rely on the in house analytics software to know your progress. Nextsale is great to mention as they provide you with a simple and easy to use dashboard. From there, you can create campaigns and track all of them to know which works best. If you are able to achieve your goals, this means that your customer loyalty program is bearing fruits.

Benefits of Customer Loyalty Program 

Customer loyalty programs are meant to help you grow your business and increase profits. Apart from this, there are a few other benefits accorded to the businesses from the customer loyalty program. 

  • Retaining your Customers: For the most part, a customer loyalty program will help you retain your existing customers. And going by the BDC (Business Development Bank of Canada), customer retention is much more cost-effective and beneficial than customer acquisition
  • Word of Mouth Advertising: Not online reviews or endorsements, but two friends talking to each other about your product and brand, is the best and most authentic marketing tactic. So, when a customer feels valued and appreciated, he/she will surely promote your brand among their circle
  • Cost-effective Gaining or attracting a new customer will cost 5x more than making efforts to retain the existing one
  • ROI: 72% of US businesses with loyalty programs see a return on their investment. Interestingly, only about half have customer loyalty programs in place.

Final words 

A customer loyalty program has become part and parcel of the 21st Century business proceedings. Any type of business wants to acquire more and more customers but also wants to maintain their existing relationships. To do that, businesses need to innovate and understand what a customer wants

And this is not just limited to quality products. Where providing quality products is the first step towards making a loyal customer. To make sure that a customer stays loyal, a customer loyalty program is needed. 

About the author:

Hannah started as a copywriter, but it turns out her true passion is e-commerce marketing.

She is naturally inquisitive about human behavior and its interaction with the digital world. Now, she’s part of the HappyPoints team with a goal to help Shopify merchants boost their business.

Her team helps merchants launch their e-commerce websites and optimize their sales conversions with fully managed Shopify store setup and theme customizations.

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