Are Loyalty Programs Worth It?

Neal Kaiser: Offering a loyalty program has a lot of value for your company and your customers, but it likely won’t look like loyalty programs of previous generations. Online shopping — via mobile devices in particular — has dramatically changed how customers view their relationship with brands. To remain relevant and win their loyalty, you may need to think outside the box.

First, consider your goals for a loyalty program, and consider any strategy that will help you reach those goals. Many e-commerce retailers use points-for-purchase models, but research indicates that the type of loyalty fostered by these programs may not be as fierce as programs that offer unique or value-added rewards (think experiences and exclusive content).

Second, consider alternate means of rewarding loyalty beyond customer purchases. How can you reward fans for engaging with or sharing your brand on social media? For example, offer exclusive content (promotional codes, members-only information, free shipping, etc.) for writing and sharing reviews or for referring friends. Are there ways you can reward fans before they’ve made a purchase — by running a contest on social media, or offering a promotion when they’ve spent a certain amount of time browsing your site? Building a relationship between you and your customers — whatever rewards you offer — will foster greater affinity and stronger loyalty between your brand and your customers.

Lastly, consider how to personalize the experience for customers. Research indicates that people respond strongly to personalized experiences — take time to analyze your customer data for ways to customize shopping experiences for your loyal customers. Not only will it improve the likelihood customers will make purchases based on personalized content, it will result in greater affinity for your brand among those customers.