Revitalize Your Loyalty Program

How much are you spending to get a sale from a new customer? It can be a big part of your budget. But if you can get customers to buy again, that cost can be spread out over multiple sales. Many small businesses use a loyalty program to encourage these repeat sales. The problem is, how do you make yours stand out? Here are some tips to recharge your loyalty program and make it as unique as you are.

The Loyalty Payoff

Besides spreading out your acquisition costs, customer loyalty pays off in a more fundamental way. It can be a key factor in growing your business. According to a KPMG study, 85 percent of a company’s growth comes from loyal customers. That’s because people who like you are prime targets for that new product or service you’ve just launched.

The KPMG study also revealed these insights into how consumers feel about loyalty programs:

  • 74% of shoppers will go out of their way to shop at a place that offers loyalty points
  • 75% would give rave reviews about their loyalty program membership
  • 60% would shop at a store with higher prices to earn a loyalty program award


But competition among loyalty programs can divert a customer’s attention. A Colloquy study reports that the average U. S. household belongs to 29 loyalty programs but actively uses only 41 percent of them. So, it’s important to have the right kind of loyalty program.

Tips to Revitalize Your Loyalty Program

So how can you use this information to create a more effective loyalty program for your customers? Here are some guidelines:


  • Make it worth their while44 percent of loyalty program members believe that the rewards offered are irrelevant. So, look for ways to make your rewards more appealing. One way to do that is to offer experiences rather than things. For example, a restaurant may offer exclusive member events that include a gourmet meal with access to special seating or parking at a movie that evening. Another idea is being able to use rewards to support their favorite local charity.


  • Choose the right metrics – Focus on the customer experience. Measure critical points in the buying cycle. Then use that information to inform not just the loyalty program, but all of your processes. For example, if most of your reward points are earned from the purchase of one product, what complementary product or service could you offer to extend that sale?


  • Show them how they’re doing – Knowing you only need 10 more points to earn your next reward can be a powerful motivator for a customer to take action so, provide frequent feedback on their standing in the program. Make the feedback as visual as possible. Some businesses use a progress bar to show how close a customer is to the next reward. Others give a star for every $10 purchased, then display all the stars in one place. A bakery could use cupcake icons to show progress.


  • Surprise and delightThe KPMG study found that 80 percent of loyalty program customers said they prefer surprise deals or gifts to traditional program rewards. Look for ways to surprise customers with unexpected rewards. Some businesses create special days where customers can earn accelerated rewards. Starbucks has “double-star days” where coffee drinkers earn twice the number of points. Other businesses use personal events, like a customer’s birthday or anniversary, to give extra rewards. Still others bestow a “customer of the month” reward to someone who’s made a purchase in the last 90 days. Anticipation from these unexpected surprises can keep customers active in the program (and your business).

Customer loyalty can be an important way to grow your customer base. But the trick is to offer programs that appeal to today’s consumers. Start with these ideas to pinpoint what your customers want in a loyalty program.

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