The Essential Ingredients of a Powerful Loyalty Program

loyalty program

Loyal customers are worth cultivating. They spend 67 percent more than new customers – and it can cost 25 times less to sell to them than to new leads. One effective way to keep customers loyal is through a rewards program — but how loyalty programs reward customers is evolving rapidly, and keeping up with expectations can be a challenge.

Ever since retailer Sperry & Hutchinson (S&H) issued “green stamps” redeemable at outlets across the country, companies have trusted broad-based rewards to appeal to the widest possible customer base. But in today’s highly segmented consumer landscape, generic approaches to loyalty just don’t cut it anymore.

Forward-looking brands are taking a far more personalized approach, implementing highly targeted loyalty programs aimed at creating moments of delight for millions of individual customers.

As Coherent Path founder James Glover explains in his latest post on Business 2 Community,

The success of such a customer-centric, value-aligned loyalty program depends on the interplay of three crucial factors: the use of personalization over broad-based messaging, a focus on delivering delight rather than pressuring customers to purchase, and a use of individualized communication to foster a sense of exclusivity.

Sephora, for example, provides loyal customers with curated recommendations, beauty tips, product sets, and makeovers. Denim retailer Madewell offers free monogramming and hemming, along with other personalized gifts. REI gives member discounts on bike repair and outdoor survival classes. All these programs welcome customers into new worlds of delightful experience.

And as Glover explains, email is the ideal channel for building intimate customer relationships, delivering offers tailored around each customer’s tastes and needs, fostering lasting loyalty to the brand throughout the customer journey.

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