10 steps to structure a loyalty program

No matter how innovative and modern it may seem, loyalty is much older than it is often claimed to be. Brands have been concerned with building customer loyalty for a long time: this strategy has been used since the traditional S&H Green Stamps in the 19th century to modern cashback campaigns.

There are numerous loyalty programs, and they can be found in supermarkets, online shopping, credit card use and in other everyday activities. But loyalty isn't just about rewarding the customer, as much as this is one of the most tangible and direct strategies to somehow please your customer. 

It is clear that discount coupons and accumulation of points are very attractive, especially in Brazil, which already exceeds 160 million members in loyalty programs according to data from ABEMF (Associação Brasileira das Empresas do Mercado de Fidelização). 

However, more than just offering immediate or short-term rewards, loyalty is essential to generate engagement from the empathy between brand and consumer. Engaged people are motivated by recognition, personalized treatment and understanding of their needs and desires.

In other words, rather than winning new customers, efficient data analysis will help in the development of a true and long-lasting relationship with the people that are in contact with your brand.  

Loyalty is a more emotional and less rational strategy, especially in times of crisis, whatever it may be. And we are not just talking about the relationship between "buyer" and "seller". Loyalty programs go much further by encompassing all the people who have contact with your company - customers, employees, suppliers and everyone else who is involved with your business.  

We know that building customer loyalty in practice is a complex process. That's why we've selected the 10 essential steps for structuring a loyalty program.

1- Strategy - this is the first step of a loyalty program. This is where in-depth knowledge of the business and the needs of the customer and other audiences of your company generate valuable insights and help you set goals and objectives.

2- Objectives - here there are many variations that change according to the business, because everything is designed according to the company's values. Defining the objectives of a loyalty program may not be so simple when your business doesn't have the required tools. Reducing churn, increasing the life cycle, cross sell and up sell, increasing frequency and sharing of wallet are some of the topics covered in this phase.

3- Design/mechanics - the definition of how the loyalty program will work should be simple and aligned with the expectations of the company and the customer. Structuring a regulation that has no "catches" and doesn't take the consumer by surprise is extremely important. No "fine print" in the footer, transparency is essential.

4- Operation - this is when planning starts to take form, when strategies and goals start to foster actions. It is important that all the company`s areas are aware of what is to come: everyone must be properly trained and qualified so that the plan can be executed.

5- Technology - technology is the facilitator of the whole process, besides enabling the best customer experience with the brand. Some topics that deserve attention in this process are: integration of communication channels, touchpoints with customers, internal controls and automation of campaigns and actions.

6- Data-driven Loyalty - don't collect data from your clients just for the sake of collecting it. Rewarding the exchange of information directly or indirectly is the best strategy to collect only necessary data, exploring it to the maximum and making the customer experience your priority. Remember that the security of this data is extremely important, so consider getting help from those who understand the subject. We're sure you don't want your company involved in lawsuits about data security and privacy.

7- Financial - how much is all this going to cost? Financial planning is an important step in putting your loyalty program into action. An analysis of financial metrics and a long-term view of expenses and revenues are indispensable pillars in this phase. Many details are discussed, since financial viability is the core of a loyalty program. One thing we guarantee: it is much cheaper to retain existing customers than to win new ones.

8- Fiscal/Legal - with data protection laws and so many controversies involving the subject, the legal sector could not be left out. It is not a specific and isolated step, but a conduct that should permeate the entire loyalty program process, from structuring to execution.

9- Communication - engaging your audience and generating interest in the loyalty program is a task in which the analysis of your data will be fundamental. This is how your company will stimulate the desired behaviour, establish a dialogue with your customer, transmit confidence and trust, offer feedback and all the information about the loyalty program.

10- Management - it is not enough just to create the loyalty program: it must be implemented. The management of the entire process will determine the success of the strategies, leverage new opportunities, keep customers loyal and generate new insights for the program.

Aiming to show you the way to build a good relationship and loyalty with your customers, our new ebook, "Loyalty of the Future", comes as a good opportunity to stand out in the market. In a scenario that is becoming more and more competitive and full of innovations, a great differential for companies is the adoption of strategies with a total focus on the customer and on their experiences with the brand.

After reading this, you will:

- know about upcoming loyalty trends

- understand how to implement this culture in your company

- be able to promote memorable experiences with your brand and build customer loyalty efficiently

Download the ebook here to learn about the main market trends and get relevant insights to follow the best path towards a successful relationship with your customer.

Cover image/Thumbnail: Pixabay Images