Key Success Factors of Customer Loyalty Programs
Among all the marketing strategies, the loyalty scheme is the most effective and successful one. Nowadays, almost every enterprise launched a loyalty program to retain its existing customers. What makes loyalty programs so successful and commonly used? Here are the five key success factors, let’s have a look.
1. Surprise Your Customers With Personalization
Personalized service is an important element of a successful loyalty program, which will bring your existing customers different surprises. With the help of big data, it is easy to mark down the consumer behaviors of members, such as purchase history, looked-up products, and rewards claimed. Big data analysis allows us to predict the preferences of the customers and provide them with the newest, most suitable, and highly related products. Providing exclusive offers, sending birthday newsletters and prizes are some of the examples of personalization that can impress your customers.
The offers and shopping information should be exclusive and matching with members’ habits and preferences, to ensure their customer journeys are unique and special. For example, some customers like cash rewards or discounts, and some may like experiential services. We may provide different offers to different customers according to their preferences.
While providing personalized offers or discounts to our members, we should show our emphasis on the uniqueness of their treatments. Since the offers of each customer are tailor-made, they will feel listened to and treated specially. By telling the customers “You are unique and special”, we may express our care and understanding to every customer. Not only can we retain the current customers, but their loyalties toward our brand will also be enhanced.
2.Simple and Clear Rewards System
Customers are alway busy and impatient. The easier the loyalty program, the more customers retained. When you are designing your loyalty scheme and events, it is better to simplify the goals, points collecting rules, and the rewards claiming process.
customer loyalty program success factors
Take Yuu Rewards Club launched by Dairy Farm as a reference, the rewards claiming process of Yuu is clear and simple, which attracts a lot of busy users. All the rewards provided by Yuu can be found under the “Rewards” tab, the users may check out all the coupons or products provided by different brands at once. Once the rewards are claimed, users may show the QR codes to the staff members in physical stores and enjoy their rewards. Compared with traditional loyalty programs, Yuu allows users to spend their points for rewards with mobile phones, they may claim their rewards anytime anywhere because everything is paperless.
To develop such a convenient digitized loyalty platform, a combination of UX and UI designs is necessary. UX and UI designs allow us to perform platform improvement and maintenance, to enhance the usability, variability, and loading speed of the loyalty platform. A more user-friendly and complete loyalty program is important for customer retention.
Apart from businesses, loyalty platforms can be applied to different aspects. Click here to find out more about the case study of Carbon Wallet.
3.Reassuring and Transparent Points Handling
Customers expect loyalty points just like their savings in the bank, that they can inquire and spend the points anytime they want because they are one of the users’ private assets. Hence, as a merchant, we need to take care of theneeds of our customers by providing a transparent and reassuring point handling procedure.
It is important to make your customers trust your loyalty platform. Apart from simplifying the loyalty point system and making it transparent, members should be provided with the information they would like to find out. Let’s say the loyalty points acquisition history (including related transaction history/rewards claiming history, etc.), the balance of the remaining loyalty points, the equivalencies between loyalty points earned and cash spent, the expiry dates of loyalty points, and so on.
Therefore, the rewards claiming process needs to be simplified and transparent, customers should be able to spend their loyalty points regardless of when. If the procedure is too complicated: filling additional forms,waiting for approval, having a long approval time that takes a whole month to deliver the products… Think about it, if you have to do all these just to redeem a small offer or product, you will probably be reluctant to join the loyalty program. Rewards are the motivation for the customers to purchase more, especially the abundant ones. However, people will only step back if the redeem process is too complicated as they will find it meaningless to collect the points.
Transparent and simplified loyalty points handling make a loyal program trustworthy. With the use of technologies and digitized membership platforms, loyalty points may be accessible by the enterprise’s network, connecting the POS system in stores, online shops, and the members’ applications. Members may inquire about their loyalty point balance through different platforms seamlessly, and feel like they are the ones who have the power to manage the points. This is the reason why members would be reassured about a loyalty program.
4.Interactions Beyond Transactions
Interactions with customers are more than just transactions. With the use of technology and applications, games and events can be carried out to enhance the engagement of your members, to provide better shopping experiences.
customer loyalty program success factors
Celebrating the establishment of over 1000 stores in Hong Kong, 7-Eleven launched a new in-store promotion campaign with the use of Web AR technology. After spending $20, customers may scan the QR code on the receipt and enter the game, they have to scan a specific logo somewhere in the store and look for an air balloon in the AR camera to claim the rewards. Apart from enhancing the engagement of customers, there are more advantages of organizing similar interactive campaigns for customers:
- Boost transactions
- Increase the staying time of the customers in stores, more chances for them to purchase.
- Customers will visit the store again to use the coupons, the customer return rate will be increased.
The marketing team of 7-Eleven put in efforts to design this fun and interactive campaign. Apart from building up beyond-transaction relationships with the customers, their loyalty and sense of belonging towards the brand are also enhanced.
5.Multi-Brand Collaboration
Everything is starting to be digitized in this day and age, including businesses. Digitized loyalty programs broke through the limitations of traditional ones, such as limited opening hours, separate loyalty programs and POS, and so on. Apart from 24/7 opening hours, e-platforms allow us to create linkage between different brands and business partners and set up a one-stop platform for multi-brand loyalty program service.
Yuu Rewards Club is a good example of a multi-brand digitized loyalty program. Carried out by Dairy Farm, Yuu enjoys the benefit of group enterprise and a large customer base. The reward partners included different brands under Dairy Farm, from Wellcome to IKEA, the brands covered a lot of the daily needs of the customers. Some of the reward partners had their original loyalty program before, the majority of the original members will choose to become Yuu members instead of losing their current loyalty points. That is one of the reasons why Yuu Rewards Club application was downloaded by a lot of users and became one of the top few applications on the leaderboard.
customer loyalty program success factors
Besides brands under Jardine group and Dairy Farm, Yuu Rewards Club even partnered with Hang Seng Enjoy card, Livi Bank, and Mandarin Oriental Hotel Group. Collaborating with different bands and enterprises to build up an ecosystem for loyal members, Yuu Rewards Club may also enjoy a strong customer base from its collaboration. For customers, a multi-brand one-stop application is more convenient than separate loyalty programs. They may manage their loyalty points, which can be used to redeem offers from different brands, in just one application. For the brand, other than the increase of cross-sales, customer loyalty and stickiness will also be increased, generating long-term values to the brand.
Click here for a deeper case study of Yuu Rewards Club.
After knowing the five success factors of loyalty programs, you sure are inspired and have a deeper understanding of the customer retention process. If you are thinking about or starting to develop or improve your loyalty program, please feel free to contact us anytime! We provide one-on-one business analysis and UX consultation services, to turn your ideas into a blueprint, and then turn the blueprint into a real application.
Seamless O2O Customer Journeys: CRM & Loyalty Platform
To learn more about our powerful O2O-centric CRM & Loyalty Platform, visit our page and discover the advantage of seamless O2O customer journeys and real-time interaction capabilities!
Keep up with us – follow us on social media!