How To Build A Successful Loyalty Program In 2017

Traditional loyalty program engagement has been on the decline for the past four years. But brands are finding success through mobile, partnerships, and more.

Rewards programs help businesses get to know their customers, engender loyalty, and encourage repeat purchases — but overall engagement in “traditional” loyalty programs has declined steadily over the past four years, according to RetailTouchPoints.

This shift is due to a variety of factors, from a lack of personalization to the fact that most traditional loyalty strategies don’t do much to foster genuine relationships. As analyst Loren Gray told GeoMarketing last year, “membership is a failure for younger people on an operational level. They don’t want reward far in the distance; immediacy is key. If they’ve visited several times, they want to see something for that – otherwise they don’t care.”

In contrast, it appears that the loyalty programs succeeding today “are designed to deeply connect with customers [across devices] and drive long-term, repeat business,” Session M posited in its report, 2017 and Beyond: A Guide to Loyalty Strategies for an Omnichannel World (download required.) Below, the top takeaways for brands looking to make the most of loyalty in the mobile age.

  • Make It Mobile: Although the majority of marketers understand the importance of thinking mobile-first, too many are still relying on punch cards when it comes to tracking loyalty. But with the number of businesses that have developed apps — including plenty of SMBs — it should be a no-brainer to connect a loyalty program: Customers don’t have to worry about losing their cards or keeping track of their punches, and at the same time, brands can look to use the resulting data to better understand their customers’ visits and purchase habits.

Session M reported that in a survey of over 8,000 QSR and fast casual restaurant diners, those that were members of at least one loyalty program (70 percent) listed free menu items, the ability to track their points, and personalized rewards as the top three program features — all attributes that are easiest to deploy on mobile.

  • Deliver Customized Benefits: As stated, customers list personalized rewards as one of their top three priorities in a loyalty program. It makes sense: They are, after all, individuals who value different things when it comes to redemptions, and the personalization enabled by mobile (and on-demand) has taught them to expect that their interests can be accommodated.

Here are two examples of successfully customized loyalty programs: First, Sephora’s Beauty Insiders program. While there are different levels of rewards based on a customer’s annual spend, each level offers diverse benefits. Through its online “Rewards Bazaar,” the brand lets members redeem their points for everything from a free gift with purchase to a meeting with a famous makeup artist. That’s a lot more exciting than simply knowing you’ll get a free lipstick for every $100 spent, right?

Likewise, Citizen M hotels has come up with some unique ways to reward guests. Instead of making customers save up their points until they can earn a free night’s stay, the chain has reportedly offered extras like free on-demand movies for smaller point increments — which may be part of why the property is succeeding with the Millennial demographic.

  • Don’t Forget Social: Part of building a successful loyalty program in 2017 means taking into account that the ways in which customers can support a brand have changed: While the ultimate goal for physical retailers is still to drive foot traffic and sales, loyal shoppers’ social posts, online actions, and more do a lot to generate interest.

Brands can look to reward check-ins at physical stores on platforms like Facebook or Swarm with loyalty points — even if its a smaller number than they’d get for making a purchase. Initiatives that reward ingrained behaviors like social sharing (as long as the posts are positive) make customers feel valued — and one thing that hasn’t changed is that that’s the feeling that keeps customers coming back.

About The Author
Lauryn Chamberlain Lauryn Chamberlain @laurynchamberla

Lauryn Chamberlain is the Associate Editor of A New York City based journalist, she specializes in stories related to retail, dining, hospitality, and travel.