How to Design a Loyalty Program for the 21st Century



In a world of loyalty programs, we are, unfortunately, hard-pressed to find ones that stand out.  Many are woefully stuck in a muck of similar points-based programs, whereby members spend a dollar, get a point, and then redeem the accumulated points for in-store merchandise at a later date.  This type of thinking is hopelessly stuck in the 20th century and does not recognize your company as unique, does not address the changing needs, expectations, or demographics of your customers, and does not leverage the new technology options that we have available today.

SoLoyal has done a tremendous job compiling most prevalent Canadian Loyalty programs in a single place.

This is a list of imperatives to update your loyalty program, differentiate it, set it up for success, drive customer engagement and results, and to future-proof it.

  • Program/Brand alignment, including ESG initiatives.
    • The brand and loyalty program must work together. Loyalty is integrated, holistic, and continuous. It is meant to support and enhance your brand, not be independent of it.  Consumers are responding to your brand, and the loyalty program enhances that relationship. It’s not a separate strategy.
    • Lean into social responsibility and community values, as ethically conscious consumers vote with their wallets.
  • Focus on data collection and usage.
    • Data collection is the main reason to have a loyalty program.
    • Ensure you leverage the data to drive business decisions across the enterprise, including merchandising, pricing, operations, and marketing.
  • Personalization using a blend of Artificial Intelligence, common sense, and human/business experience.
    • Your personalization and messaging strategy needs to be rooted in both first- and zero-party data. Creating messaging opportunities based on transactional data is a good start, but using zero-party and psychographic data to personalize those messages will differentiate your brand from those of your competitors.
    • Personalization must recognize members’ wants and needs. Drive relevance to deter members from turning on increased privacy /data blocker services.
    • Build meaning through personalized interactions, messaging, product recommendations, rewards, content, and offers.
  • Seamless loyalty integration into all customer touchpoints.
    • Customer experience must be contextually relevant and be seamlessly assimilated into consumer lifestyles to create emotional connections.
    • The ease and use of a program’s website and mobile app have a significant impact on program loyalty.
    • Make the program easily discoverable in all channels (website, mobile website, app, social media, paid search, etc.).
    • Create a convenient, easy, and secure sign-up process for new members.
  • Ensure reasonable time to first redemption.
    • Ensure a reasonable/competitive effort is required of the consumer to earn a redemption. Drive redemption behaviour to encourage emotional loyalty and future spend. Ensure members can reap the benefits of the rewards in the program within the first week and again in the first month of membership.
    • Balance cost-effective and quick-to-redeem rewards with more valuable, aspirational items. Provide experiential rewards within the program to create and build upon emotional loyalty vs. pure reward-oriented transactional loyalty.
  • Drive emotional loyalty.
    • Customers who are emotionally connected have a 4 times greater lifetime value and depth of engagement.
    • Members claim that the best programs offer great value, live up to their promises, have great customer service, are dependable, are worth their time and effort, are better than the competition, offer a lot of points and rewards, have rewards they care about, have rewards that are reasonably attainable, and resolve issues completely and quickly. Very few of these attributes are about the hard benefits or earn potential.
    • Great programs delight through surprises, make members’ lives easier, and say “thank you”.
  • Value and treat associates as brand ambassadors.
    • Emphasize the employees’ role in the loyalty experience – they are a program’s greatest asset.
  • Recognize your best customers and build a member community.
    • Create moments of recognition, exclusivity, personalized content, and exclusive experiences, build member communities, and access for members to participate with like-minded members.
    • Introduce premium benefits, such as expedited customer service, free shipping, extended return windows, concierge services, and more to support convenience and priority on time as a highly valuable “commodity”.
    • Build a sense of belonging.
  • Invest in partnerships, including co-brand payment methods.
    • Invest in brand-right partnerships to provide members with unique, experiential benefits that can also unlock new revenue streams and capabilities.
    • Incorporate co-brand payment options that give members incremental benefits when using preferred tender. This improves the profitability of the program, provides you with access to data outside of your company, and significantly accelerates the members’ time to reward.
  • Reward non-transactional brand interactions.
    • Incorporate unique/innovative features into their programs, such as referrals and rewards donations.
    • Ensure the program includes non-transactional means of earning points/benefits (e.g., product reviews, brand advocacy, participating in the community, etc.).

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