How to Build Customer Loyalty

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Loyal customers are the lifeblood of any successful business. Find out how you can create a successful loyalty program that keeps your customers coming back.

When it comes to purchasing power, loyal customers are king. Not only do they spend an average of 67% more on products and services than new customers, but they also save your business serious sums of money on acquiring costs.

So what does this mean for your business?

You should be devoting more time and efforts to enhancing customer satisfaction and building customer loyalty than seeking new customers. One cost-effective way to do this is to create a customer loyalty program to entice and reward them as well as keep them coming back. (Given the aftermentioned statistics, the loyalty program will end up paying for itself.)

What Is a Customer Loyalty Program?

We’ve all experienced customer loyalty programs. According to the 2017 Loyalty Census Report, there are currently 3.8 billion enrollments in customer loyalty programs—a number that is expected to grow. Why? Because these programs offer loyal customers added value to products and services they already love. Typically, they give consumers free merchandise, discounts, exclusive rewards or VIP access, but these bonuses can be awarded for various reasons.

As the creator, it’s up to you what you want to offer and for what reason.

How to Start a Customer Loyalty Program, Step-by-Step

1. Start with a name.

The name of your customer loyalty program should be impactful yet quick and easy to remember. Most importantly, it should stand out among the competing rewards programs. Some keep it simple and use brand recognition to name their program like Starbucks Rewards, whereas Petco used their branding to create Pals Rewards.

2. Decide how your loyal customers will earn rewards.

Is it a point system based on the amount they spend annually? Is it a certain threshold of purchases they need to make? Are they rewarded just for signing up for your text message updates? There are plenty of ways you can approach your rewards program, but the key is to make it work for your business and your customers.

3. Determine what rewards you will offer.

The rewards can range from a simple discount code to an entry into a large sweepstakes. But the key to a successful customer loyalty program is to offer variation and frequency. You want to reward your consumer often, so that they see the value in being a member. Giving multiple, smaller offers can sometimes be more beneficial than a huge reward to end all rewards.

Again, you should find a system that works for both you and your customer. If your loyal customers value free merchandise over discounts, then account for that when developing your loyalty program. If you sell service-based goods like gym memberships or salon services, then sometimes a discount or exclusive add-on will resonate more with your audience. It’s important to find the right system to guarantee customer satisfaction.

4. Add an element of gamification.

Whether it’s by offering virtual badges as your loyal customers achieve more points or offering commemorative, exclusive merchandise—adding an element of gamification helps spark your customer’s competitive spirit and rewards them for brand loyalty. As a result, you will see them participating more often.

How Can You Ensure Your Loyalty or Rewards Program Is Successful?

Now that you have all the elements to build a customer loyalty program, how do you make sure it works? The key is to reach your customer when they are interacting with your brand such as on your website or at one of your locations. Here, your brand is already top-of-mind.

Advertising your loyalty program with a keyword and dedicated short code allows your customer to immediately opt-in. From there, you can offer a reward simply for signing up which will encourage your customer to make a purchase right then. This also allows you to contact them with other relevant promos, events, and information they could be missing out on—which is a win for everyone.

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