THE CLARUS Blog

Designing a Loyalty Program? Don’t Skip This Important Step [Video]

When you think of a loyalty program, what’s the first thing that comes to mind? Points, discounts?

We move so quickly to the mechanics of a program instead of thinking about the goals around it.

Why did you create the program in the first place?

 

Align On Your Loyalty Program Goals

In our recent data study, nearly 70% of consumers said their loyalty is more difficult to maintain.

So, it makes sense that we’re all continuing to invest in loyalty.

As a result, we’ve seen several retailers revamp their programs in the past year, including brands like Target, Nike, Reebok, Nordstrom, and Starbucks.

It’s reasonable to watch this trend and jump right to designing benefits for your program, but something must be done before this.

While every loyalty program needs to be structured around and for your customers, there are different goals.

Reaching alignment on your loyalty program goals is critical before anything else happens.

Once you are aligned on your program goals, then you’re ready to proceed.

 

It’s Not Always About the Money

While most loyalty programs are judged on if they can increase AOV and repeat purchases, there are other goals as well.

The longest lasting form of loyalty is emotional loyalty.

This can’t be measured as easily with transactions, since the customers who carry this emotional loyalty aren’t always your highest spenders.

But they are your biggest evangelists.

Consider that Restoration Hardware’s RH Members Program accounts for a staggering 95% of total company sales.

Another goal of loyalty programs can be to collect data.

This continues to be increasingly important as customers are now concerned with where their data is going.

Loyalty programs can create value here since 58% of consumers are “data pragmatists” who provide data when there is a clear benefit in doing so.

This data can be used in various ways.

You need data for personalization and to find more customers you’re your best customers.

 

Tailor Your Program to Your Overall Goal

Loyalty is a long-term game and your program needs to be tailored to your overall goal.

You need different benefits, different program structures, and different incentives based on your goals.

The more clarity you can attach to each goal, the easier it will be to construct the right program and KPIs.

 

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