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10 Things We’ve Learnt in Applying a Loyalty Program

Loyale Team | May 17, 2021

There are numerous loyalty schemes out there. Each one has a little twist. A value centric scheme we use has proven to be really valuable to our business. Here is our experience in 10 takes:


1. The program must benefit both buyer and seller

For anything to work, there must be a clear value proposition to all stakeholders. The consumer needs to be attracted to the scheme and must find instant benefit and satisfaction. Throughout the article, we focus on the business benefit instead assuming customers love the scheme.


2. The true benefit is repeat business

The true benefit of any scheme, indeed, of any marketing effort, is an increase in customer loyalty. Simply put, this means repeat custom over time. The scheme needs to be central to repeat business and must be designed for this.


3. The marketing cost of attracting a new customer is known 

A loyalty program is transparent, meaning the cost of attracting every single customer, every time the scheme is applied, is known. Contrast this to the blunderbuss approach of traditional marketing. Any business could be spending large sums on advertising in all its different formats, but it still would not know the advertising success rate in attracting new customers.


4. Marketing spend is reduced as this is direct and targeted to scheme members

Loyalty programs allow you to target different segments of your audience, be it the ones who are super loyal, the ones who are losing interest, and the ones who have yet to discover you. Instead of throwing out a general promotional discount, or adverts aimed at your audience as a whole, reduce your costs and increase your accuracy using your loyalty program to target the individuals with the right messages (offers) tailored to them.


5. Loyalty programs benefit all businesses no matter the size

Scheme participation gives visibility and access to all businesses, big or small. Using the scheme wisely, and incorporating this in promotions is a great way of getting into the mindset of consumers. Whether you’re a small café trying to earn new clients or a large franchise restaurant trying to retain clients- loyalty programs can help you achieve your goals.


6. The scheme should be central to your digital marketing

The pandemic has reinforced consumer use of the internet command, mainly through smartphones. Gone are the days of carrying a ton of loyalty cards. The smartphone is a true personal assistant to the consumer, enabling everything from online shopping, deliveries, communications, news, and much more. Therefore digital marketing places the scheme at the heart of the consumer’s personal life.


7. Know your customers intimately

As customers join the scheme, more information is gathered and shared. Contrast this to an over-the-counter sale where information exchange is one sided, that is from the business to the customer. The potential of being able to speak to your customers directly s valued people is the true hallmark of loyalty.


8. Reactivate customers not seen in some time. 

The beauty of knowing your customers intimately is the ability to activate them with items or service of interest in seeking repeat business. This is only possible if you know who your customers are and if you are actively and intelligently pursuing them, offering them value as time goes by.


9. Use the scheme to promote select products and services

Knowing your customer means knowing the tastes and preferences of a select market segment. This gives the business the confidence of being able to target this segment with select or exclusive products. Anything is possible, for example, testing a new product range, specials, repackaging existing products that matches the personality of the select group and so much more. It really is up to your imagination and experience.


10. Add value to your price comparability

With price comparability comes price competition. This is especially so the more saturated your industry is. If you are a hairdresser in a city where competition is high, you may find yourself  having difficulty differentiating yourself from others, especially when it comes to price- let’s face it there’s only so low you can go. With a loyalty scheme you’re adding value to your price. That value changes how people see your pricing and how they compare you to your competition.


One final word, a loyalty scheme isn’t about the card, the app, or the point system. Instead, it is about the organisation managing the scheme in partnership with you. The company should have the marketing experience and the business analytical skills to help you plan your strategy and tactics that give your business the edge.

We are capable of doing all this and more! If you wish to get in touch with us click here!