Do Customer Loyalty Programs Really Work?


Turn your head to the left, right, north, south, or any other direction you can imagine, and every single brand you interact with will have some customer loyalty and rewards program you can sign up for. The natural question for you as a business owner is, do customer loyalty programs work, and should I implement one? In this blog post, we will explore:

  1. What is a customer loyalty program?
  2. Do customer loyalty programs work?
  3. What makes a good loyalty program

What is a customer loyalty program?

Defined, a loyalty program is a program that allows a business to track and reward customers for different types of actions taken. Rewards programs can come in many different shapes and forms, but most rewards programs at their core operate using points-based systems. As customers make more purchases, they can then collect points and use them for various rewards such as discounts, free shipping, free products, and more. A well-known example of a rewards program is how airline companies use Air miles – the more you fly, the more you can fly for free. It’s as simple as that.

Do customer loyalty programs work?

With over 90% of companies having a loyalty program, the big question is, do they work? In a loyalty report by Bond, their studies found that 84% of people who were members of a loyalty program made a redemption at some point. Not only that, but 71% of consumers said they found that the loyalty program was a meaningful part of their relationship with the brand. Over time, a loyalty program has a compelling benefit for the brand; on average, around 66% of customers modified spending habits to maximize rewards points, resulting in a 27% increased overall cart total. In another study by Incentive Solutions, they found that the average order quantity before and after the implementation of a loyalty program increased by an astounding 319%!

So the short answer, implemented correctly to the question “Do loyalty programs work” is a resounding YES! That being said, a poorly implemented loyalty program will not benefit you nearly as much as a well-structured one, so let’s explore the components of a good loyalty program.

What makes a good loyalty program?

For a loyalty program to be successful, it has to follow some basic principles; these principles will allow it to effectively and consistently keep customers “coming back for more.”

  1. Powerful and Desirable rewards

The most apparent aspect of a good loyalty and rewards program is providing the customer with enticing and desirable rewards. The customer must see the program’s benefits and want to work towards acquiring those benefits constantly. Otherwise, the program will not be successful.

  1. Digital Optimization

Many people are familiar with the supermarket rewards card, allowing you to scan or swipe it after every purchase to add the points to your balance. In the modern age, there must be a digital equivalent for everything and a way to access and view your topics digitally. While cards may be aesthetic and nice to provide for your customers, there has to be a way for people to access their points and balance when shopping online, when using their laptop or smartphone and when they are on the go. Ease of use makes a huge difference for your customers and will dramatically increase the usage of the loyalty program, thus improving customer loyalty

2. Easy to Join

You can have set up a perfect rewards system and made it incredibly easy for customers to access their rewards system anywhere; it all falls apart if you do not make it easy to join. Customers should ideally be able to sign up with minimal effort and in a few minutes or less. If multiple steps are involved in the process of signing up, you can counteract the possibility of customers exiting the process halfway through by introducing a sign-up bonus

3. Easy to use and understand

Once a customer begins to use the program, they have to be able to understand how to utilize the system easily. Make it straightforward for customers where they can redeem their points, the different options for redemption, the rewards and perks of different tiers, and how they can gain points. The more easily a customer can understand the program, the more they will use it

4. Emotional Connection

Last but certainly not least, the best loyalty programs offer more than a simple transactional process. A loyalty program allows customers to connect with the brand in many ways, thus building the most potent type of connection a brand can have with customers’ emotional connection. Adding tools such as friend referrals, points for social media posts of the product, follows on social channels, and other connective actions will change your rewards program from a simple transaction process into a tool for connectivity.

We can’t talk enough about how beneficial a loyalty program could be for your business; for many companies, creating one with all these features is long and strenuous. We can help save you that hassle and get you going in just a few minutes (not to mention we can do so much more 😉). Try out Gameball’s powerful all-in-one marketing and Loyalty solutions and unlock a level of growth you never imagined possible.

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