Lifecycle of a Loyalty Program

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Having a loyalty program in place helps the business drastically increase its revenue by gathering insightful data, increasing customer retention and acquisition and more!

Launch a loyalty program or take your existing loyalty program to the next level to boost your sales by not only attracting new customers but also turning your loyal customers into true valuable brand ambassadors.

This article will detail everything you need to know to deploy the best Loyalty for your beloved customers. Discover the five stages of a Loyalty Program lifecycle: 

Stage 1: The Planning and Onboarding stage (1-2 months before launch) 

The planning happens before the loyalty program is made live. At this stage, there are a few things businesses need to determine: 

1.What is the main objective of the program? Is it to grow your customer base, boost your brand image, communicate with and update your customers on a regular basis, improve your average spend and visit frequency, create a sense of belonging to a club, etc.? Your program can have many objectives, but they have to be clearly stated at the beginning so every initiative you take is targeted to reaching your goals.

2. What is the budget assigned for the loyalty program and the marketing campaigns associated with it?

3. Who is the target audience for the program? How do you define your “loyal customers” today and how do you want to define them tomorrow? Putting words and numbers on what your target “members” look like will help in selecting the best loyalty schemes to activate depending on the different customer profiles. 

4. Identifying KPIs to follow and have a north star to reach in mind!

5. What are your direct competitors doing in terms of loyalty? Do they have a loyalty program in place? If not, you’ll be innovating on this topic. If they do have one already, what does it include and what could be improved? The analysis and the decisions coming out of it at this stage have a notable impact on the performance of the loyalty program through its entire life cycle. Don’t underestimate it!

At Como, during your onboarding process, we help you answer these strategic questions in order to craft the most relevant customer engagement and loyalty program solution.

Once you are done with the pre-planning of the loyalty program, you can start actually designing it! There are a couple of aspects to look into when designing an efficient loyalty program: 

1. Attractiveness of the program

a. Select the most relevant loyalty schemes for your brand: from digital punch cards, to a convenient mobile wallet, an exciting Points Shop, Cashback or members’ Tiers, Como has got you covered with many different key features to choose from! Focus on 2 main ones and update/upgrade your program to show renewed and ever-growing value to your customers.

b. Make your program as interesting as possible from the beginning by bringing true upfront value to your customers. Apart from the main loyalty schemes at the heart of your program, you can offer enticing rewards/discounts to your members such as a joining gift, a birthday gift, a Happy Hour deal, in addition to the many seasonal and temporary gifts and discounts you will grant.

c. Find a great name for your loyalty club: If the name of the loyalty program is not enticing, there are higher chances that your customers might ignore it. The goal is to create the desire for customers to join, use and share it with their friends and family members! 

2. Offer a personalized & seamless experience to your customers across all channels

a. Prepare your communications to members ahead of time. With Como you will be able to share loyalty offers through email, sms, push notifications and in-App messages. These communications should be well thought out and match your customers’ tastes in terms of frequency, channel, tone, layout,…

b. Allow members to earn points and rewards when they order through all your channels by integrating your loyalty program with your online ordering platform.

At the end of the Onboarding phase, your program is Live. But to ensure great success from the start it should be introduced to the world properly!

Stage 2: Introduction Stage of the Loyalty Program (First month after the program launches)

During the first month of your loyalty program’s life, you need to work on key areas to ensure the success of your customer engagement strategy.

1. Spread the word in your locations

Your locations offer lots of great opportunities to spread the word about your loyalty program and make a big splash with your customers. Here are some of the ways in which you can let your customers know about your program at your locations: 

a. Outside your store: Hang posters up on the windows, place roll-ups outside your store and most importantly, train the salesperson and waiters to distribute the pamphlets, especially if there are many other competitors in the area. 

b. On the tables: You can create table tents, table mats and even place digital signage on TVs and iPads where the menu items may be displayed. 

c. On products: Adding a scan-code on tissues, coffee cups, water bottle stickers and coasters is a great way to steal the attention of customers. 

d. At the checkout: Putting promotional stickers on customers’ receipts, placing signage & posters near the checkout; advertising on staff’s uniform, etc go a long way! You can even go the extra mile and put flyers in the take-away item bags!

2. Generate buzz on social media

In order to promote your loyalty program far and wide, it’s essential that you share it across your social media platforms: Twitter, Facebook, Linkedin,  Instagram and Tiktok. This helps reach out to those people who haven’t stepped foot in your business for a long time. 

a. Post stories and story highlights.

b. Post more videos than static posts because videos are more attractive to social media users. 

c. Add relevant hashtags to the posts.

d. Add a link to download the program, access your web portal or learn more about your club in the bio of your social media.

e. Showcase your happy customers on your social media profile. 

f. You can even use social media to promote blog posts and articles talking about your loyalty solution. 

g. Tiktok is the latest social media platform that is trending around the globe. You can showcase your loyalty solution with short 30 second videos and make it go viral! 

3. Other ways you can showcase your loyalty solution online

a. On your website, you can include a button that redirects the visitors to your web portal! 

b. Email marketing goes a long way in promoting your businesses’ new features. So share the announcement with everyone on your mailing list.

4. Make sure your staff is ready

Get all your employees ready to launch your loyalty solution. They not only need to be motivated but also have the right knowledge to communicate to your customers about the program. Afterall, they’re the ones on the frontline who are talking to your customers on a daily basis and their involvement is critical to make your loyalty club successful. 

a. Hold a session to show them how to use both the POS and the mobile app (if any) Training is crucial because they need to be confident in how the app works in order to deliver it with full knowledge. 

b. Encourage them to download your app and try it out for themselves. 

c. A good way to motivate them is by holding a competition over who can get the most customers to join the program. 

d. Involve them in the marketing and decision making process.

e. Incentivize them by giving them a promo code that their friends and family can use for a special treat. 

5. Make sure your company’s leaders are onboard as well

The upper management, branch managers and your marketing and sales team can also play a major role in getting customers onboard. You’ll want to make sure every one of them is: 

a. Inspired by the program has driven major growth for the business.

b. Have sufficient knowledge on what the club is, how it works and how they can communicate the same to the customers. 

Stage 3: Growth Stage (6 first months after the program launches)

At this stage, there are two kinds of customers:

a. Those who have already signed up to the program and are redeeming points and rewards and some are even telling their friends and family about it. 

b. And two, those who haven’t. 

Your business has to focus on signing up new customers to the program as well as increasing the value of existing members. To do so, your business needs to understand why some customers are not on board yet and why certain members are not using the program very often. 

There are 2 main KPIs to track: 

  1. The number of members in the program
  2. The Penetration rate of the program

To subscribe new customers to the loyalty program:

a. The program should be visible to customers both online and offline. 

b. It should be exciting enough for new customers to join the program, offering direct and valuable perks is the way to go.  

c. Incentivize your customers to refer their friends and family members to the program.

d. Segment your members’ base for a higher degree of personalization. This way, the customer sees that your business knows their needs and preferences. 

e. Offer new and exciting incentives to customers/members. Personalized promotions go a long way! 

Stage 4: Loyalty Optimization Stage (6-12 months)

The data that your business accumulated from analyzing the customers’ behaviour in the last stage can be used in a number of ways. This will help your business either approve or improve the relevance of the loyalty schemes in place. 

a. Analyzing the reward program redemption rates to see which customers are redeeming, what they’re purchasing and when.

b. Making sure the rewards aren’t too hard to earn/use or else the customers will become disengaged. 

c. Launching new features to delight loyalty program members and showing them more value such as a tiers system, subscription plans, mobile wallet, punch cards and more… Offering more ways to earn rewards such as online ordering is also a good way to attract customers. 

At this stage, there are 3 main KPIs to track: 

  1. The Penetration rate – Making sure your customers are embracing the loyalty program. 
  2. The Visit Frequency – Making sure that the visit frequency of customers improves overtime. 
  3. The Redemption rate – If the redemption is not up to the mark, then this calls for the need to adapt the loyalty scheme in place. 

Stage 5: The Loyalty Upgrade stage

This is where your company conducts proper due diligence on the performance of the loyalty program and analyzes the results generated. The main objective is to leverage your database and the insights generated to perfect your loyalty program and interactions with members and eventually, turn them into brand ambassadors. 

At this stage, there are 3 KPIs to track: 

  1. The Penetration rate (always!) – in terms of transactions and sales. 
  2. The Average spend by member.
  3. The Average Visit frequency per member.

This means refining your campaign, fleshing out your rules set and launching Comillia AI campaigns!

Refining your businesses’ campaigns:

a. Launch personalized campaigns for better success based on tags, purchase history of the customer and more. 

b. Launch seasonal campaigns with personalized gifts. This can be done by leveraging gamification campaigns as they’re always a big hit! 

c. Launch win-back members campaigns to get members who have not visited for a certain time back in stores.

d. Promote locations lagging behind and organize store competitions.

Fleshing out your rules set:

a. Add new rules like rewarding those who spend over a certain amount, visit a certain number of times, etc. with either a gift, voucher or doubling the points. 

b. Offer product bundles at a discounted rate. 

c. Introduce deals like happy hours on your lowest days of the week. 

d. Launching Comillia AI campaigns to increase the visit frequency and the average spend of the customers.

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