How to Run a Customer Loyalty Program that Works

How to Run a Customer Loyalty Program that Works

Gaining customer loyalty is a sure-fire way to increase your profitability, whilst keeping your cost base stable. But it’s an exceedingly difficult thing to achieve, as loyalty is more than just discounts and rewards points…

Customers are loyal because of quality products, experiences, and the added benefits you provide—such as solving problems, increasing their profitability or helping them to reduce costs.

For a business to build loyalty, it needs to create the best experience for its customers. So, before you launch a new loyalty scheme or change an existing one, you need to have a clear understanding of what drives a customer to be loyal to you.

Loyalty looks different for every organisation. For some, it means customers shop weekly. Others may need to be in the top three choices of the customers’ decision-making process.

Analyse the behaviours of your most loyal customers. Which engagement channels do they prefer? Do they usually make big purchases? Are they buying everything they could from you or just buying selected products and services?

The more ways a customer engages with you, the more likely they are to be a loyal customer. Do they engage with you on social media? Are they recommending your products and services to other organisations or their friends? Are they helping you to create a great name in the marketplace?

It’s a great idea to segment your customers and identify who are the most loyal. This includes measuring the variety of products they buy from you, the number of ways they communicate with you (phone, text, email and social media), how many times they buy, the typical size of their transactions and how many times they recommend you.

Once you have profiled and understand the value and activities of your most loyal customers. The next step is to identify similarly (size & type) existing customers, who (for whatever reason) aren’t yet as advanced up the loyalty ladder … and invest in them. As you have now identified that they have the greatest potential for loyalty toward you.

Now you have this information, you can go as far as measuring the monetary value your most loyal customers bring to your business, against the next tier you have earmarked to progress up the ladder of loyalty. What’s the average difference in their spending? Use this number to calculate the value of marketing you can afford to spend on them, to encourage higher engagement and loyalty.

Be warned, making assumptions about customers can lead a loyalty scheme in the completely wrong direction—costing lots of money and wasting lots of time.

The only way to understand what customers want is to ask them.

By identifying what delights customers and prospects, you can create solutions that better align with your customers’ wants and drive the desired behaviours that your organisation requires. This enables you to develop deeper relationships with your customers to lead them up the ladder of loyalty, through more personalised experiences.

The initial reason a customer engages with an organisation or signs up for a loyalty scheme can be because of a discount or a special promotion. But a customer only stays engaged because of the product itself, the perceived benefits (solving a problem, increasing profitability, or reducing cost), the experience and the relationship.

The more a customer engages with a business like yours, the more you should look to acknowledge them in some positive way. This includes providing special and exclusive customer access, experiences and unique industry sector schemes. These can really make a difference and help you stand out in the market.

A good example of this is the unique profit-sharing scheme I created and launched in my business, for charity organisations.

In our case, we aim to provide charities with the right printing technology, while giving them a way to earn recurring donations that support the communities they represent. So, for every colour page a charity prints we are giving them one penny back in the form of a donation. This leads to £1,000’s being donated back to support the communities in which we operate. Find out more about it here.

Whether supporting you through regular purchases or recommending you through word of mouth and social media, loyal customers are essential to your long-term success.

Loyalty is not built overnight. It comes from timely, relevant engagement and results in customers consciously choosing to do business with you repeatedly.

Loyal customers are the most valuable. And before creating a strategy to engage customers, we find it’s best to have a clear definition of what we need to do to create loyalty. We are hoping the information we have shared will help you to develop long-term customer relationships and drive more customer loyalty for your organisation.

Darren Turner’s imaging business success story began in 2003 when he opened a retail store in the UK selling printer supplies to home users & small organisations. Since then he has moved into a business unit, grown his team and continued to adapt to match his customers’ changing needs. He has developed a ‘fit for purpose’ office products and solutions business model that provides certainty of cost and service for small businesses, charities and schools—thus providing them complete peace of mind.

He has become a trusted advisor for small organisations across the world. Turner invites you to chat with him about your business, reaching out to him on LinkedIn, email or on the phone at +44-7887-548523. Especially on this topic: “How to Run a Customer Loyalty Program that Works.”

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