Planning Loyalty that Lasts

There must be more that goes into building a Loyalty program than creating a system of points and redeemable rewards. Many companies seem to assume that creating a program where points can be earned and traded for store credit is enough to create and maintain customer loyalty.

I believe this is the reason why many loyalty programs fail to stand out from others and don’t offer a unique, targeted experience for its users. You might be wondering how this can be achieved when it seems like everything has already been done before. This, however, is the wrong approach to creating a successful loyalty program.

The key to creating a successful loyalty program is to spend a significant amount of time planning step-by-step. The first step to planning your loyalty program is to know what problem you are trying to solve within your company or business. According to Loyalty 3.0, “If you don’t have a clear idea of the problem that you’re trying to solve, then it’s impossible to ‘do the right thing’” (Paharia, 2013, p. 192).

If you try to create a loyalty program without first identifying key problems to solve with your program, you will get nowhere. Next, you must identify your target audience. Who do you envision using your loyalty program? How can you make their experience with your company a more positive one? In this process, it is important to create a user persona for your audience in order to personify who you are reaching and more effectively cater to their needs as you are crafting your program.

The next step in building your loyalty program is to identify what behaviors you’d like your audience to engage in. Do you want them to visit your business more frequently? Maybe you want them to spend more with each visit. Either way, you must be specific to ensure you remain on target and create a loyalty program that will best suit the needs of your company. 

This next step is crucial to ensure that your program is actually benefitting your business; you must identify key performance indicators, which is how you will measure the effectiveness of your program. Some examples of key performance indicators for your company could be the number of social media shares or the average amount of money spent by each customer per visit.

At this point you will want to create a mission statement that comprises all of the goals you have already come up with for your company. Your mission statement will include the problem you are trying to solve, how your loyalty program will solve that problem, and the desired outcome of your program.

Next, you must ensure that you understand what boundaries or constraints you may encounter when building your program. You may not have all of the resources necessary to create the program of your dreams, but you can be creative with the resources you do have.

We’re almost done. Now, you need to calculate the return on investment of creating this loyalty program. There will likely be a cost to implementing your program, and that’s okay. However, you must be sure that in the end, there is a net positive to your company as a result of your program. This is something you should estimate before implementing, as well as something to continue monitoring after its implementation. 

Lastly, you will need to sell your program to the people of your organization. You know that your program will have many great benefits for your business, but you need to convince everyone else. Anyone who will be affected by your program will benefit from investing in its creation, and you will need their help to get the program up and running. 

This all may sound like a lot, but it’s important not to skip any of these steps in the planning process if you want to create a successful program to help your business thrive. As the Bible says, “Do your planning and prepare your fields before building your house” (New Living Translation, 1996/2015, Proverbs 24:27). Doing the hard work of preparation ahead of time could save you the headache later, and potentially thousands of dollars.