The question on retailer’s minds is no longer “do we need a loyalty program,” it is “how to we roll out the smartest, most relevant loyalty program.” Retail is more customer driven today compared to even half a decade ago. Customers seem to have a never-ending array of options to get introduced to brands and products – right from the traditional “heading to the store to pick up a product” to “the monthly subscription that drops off a cohesive assortment of products at the front door.”

In this environment, creating brand loyalty is one of the biggest challenges for retailers. A strong customer engagement strategy is a must have for a retailer and constructing a loyalty program that is easy and engaging is sure way to build and foster brand loyalty.

Loyalty programs have come a long way from punch cards. Today’s best programs are personalized, offer experiences and let the customer control that experience.

Here are some of the key questions to ask before launching a loyalty program:

  • Why are we launching a loyalty program? It is very important to clearly state the intent of the program. While the overarching reason for a loyalty program is to create a loyal brand following, it is important to delve deeper into that goal. What is the goal of the program and how does it fit into the larger business strategy of the brand? Do we want to learn more about our customers? What about their buying patterns and their lifestyle? Do we want to build a relationship with our customer? Do we want to gain share of wallet? Do we want to provide differentiated service to our top customers? The answer may be a combination of all of the above, and more. Prioritize the intent before defining the program.

  • Does the program align with our brand?  Setting the right currency and cadence for the program is key to a successful program. Frequency of visits, average basket size, deals, perks and service expectations vary by brand and retail vertical. The program needs to tie in the right attributes and reflect the energy of the brand. Are we a points and discounts program? Or are we a surprise-and-delight and experiential program? Develop a program that resonates and enhances brand identity to keep that customer coming back for more.

Using loyalty to build a brand
  • Does our whole business support the program?  Customer relations are no longer the exclusive task of the marketing team at a company. The whole business needs to whole-heartedly support the philosophy and the program. Right from the front line sales staff on the floor pitching the program to the data scientists that are churning data to gain useful customer insights to the IT team that supports communication with the customer that’s on the go. With omni-channel engagement being the need of the hour, ensure that all teams and systems are on the same page.

  • Do we have the right systems in place? Drafting the perfect program on paper is one thing, but to bring it to life is something that is a totally different animal. A lot of businesses miss this important step of getting a clear understanding of what’s required to launch and maintain a robust program. Can our POS systems collect customer data? Can it look up customer information? Can our customer service team easily make point adjustments? Can we trigger communications based on our customers’ social media actions? Based on the program definition, be sure to have the right set of systems in place to implement thoroughly – whether built in-house or partnering with a vendor.

  • Are we ready to test and learn? A lot is learned about the customer during the initial months after the launch of a program. Being nimble enough to incorporate the learnings in planned cycles is key to building a robust program. Most large businesses have a phased approach to launching a program. The primary reason for this is to understand what works and what needs tweaks. Pay heed to customer responses, sales staff’s feedback along with data and analytics during those initial few months as this will go a long way in cementing a successful program.

In summary, a loyalty program should be a customer engagement program and the answers to the above questions will set the right foundation to drive healthy customer acquisition, retention, and growth.

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