Customer Loyalty Programs From a Marketing Perspective


By Mark Shumaker

It's easy to understand why customer loyalty programs have become integral parts of so many marketing programs. These programs are powerful tools for increasing existing customer engagement and repeat business, along with helping to attract new business.

I bet you participate in some form of a loyalty program. Maybe you get perks through your local grocery store, convenience gas station, favorite online retailer or family credit card. If so, you’re not alone, but have you ever considered what makes a successful program?

Here are a few things to consider when developing successful loyalty programs:

  • Determine the goal of the incentive - Before you begin developing an offer, make sure know why you’re launching it and what you want it to achieve - developing loyalty, increasing sales, attracting new customers, introducing a new product?

  • Identify the audience - Once you’re certain of your goals, identify exactly who can help you achieve your goals, and therefore should take part in the program – existing customers, repeat customers, prospects, those who meet certain criteria, etc?

  • Be distinctive - 75% of consumers are engaged in loyalty programs, but they only actively participate in three or four. Make sure your loyalty program is distinctive so that it is differentiated from all of the other programs. It is critical to offer powerful incentives such as desirable brands, rewards which are perceived as valuable and are easy to redeem.

    For any-size business, customer loyalty is founded first and foremost on great service and the quality of your products or services. Think of ways you can make your incentives and rewards as unique as your business.

  • Add a digital component – Not everyone is digitally savvy, but many are. It’s increasingly important that you cater to the growing mobile loyalty trend. There are many inexpensive apps that any size business can tap into. If your business already uses a mobile payment platform, many of these are now integrating loyalty programs into their offerings. Explore your options and look for services that offer social media integration.

  • Budget properly - Incentives are not expensive luxuries. Loyalty programs should be self-funding strategic tools, the cost of which is covered by increased sales or stronger cost-efficiencies. You should always generate return on your investment.

  • Communicate effectively - An incentive program cannot work without proper communication. Communication must be consistent from beginning to end and the more creative the better. The more excitement that is generated around the incentive, the greater the participation and the better the results. And, don’t forget to communicate the incentive’s success after it has finished.

  • Track performance - Being able to track the performance of your incentive and assess its effectiveness is very important. To be able to access feedback and view return on investment is invaluable, whether in terms of deciding on the next strategic step or improving the operation of an existing incentive.

If you have further questions or are interested in developing a loyalty program, many marketing agencies have professionals who focus their talents on loyalty programs.

© 2013 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2019 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.