How to Create a Loyalty Program Your Customers Will Actually Use

loyalty marketing

According to The Harvard Review, “a new customer is anywhere from five to 25 times more expensive than retaining an existing one.”

This is why it’s so important that you add a loyalty marketing strategy into the mix to ensure your customers keep coming back for more.

Check out these ideas on how to build a happy and loyal following with a loyalty program.

Know What Drives Your Customer

Doing a little research on what is important to your target audience before deciding on your loyalty marketing strategy can save time, effort, and money. (If you have Google Analytics, you can easily get this information.)

  • For example, if your target audience has an interest in charitable organizations, they will be more likely to join your loyalty program if a part of the proceeds goes to charity.
  • If your target audience loves pets, your loyalty program might send a percentage of each sale to a local pet shelter.

If you understand what customers value, you can create your program around it.

Personalize the Loyalty Program

According to an Accenture research finding, personalizing your offers will have the greatest ROI.

For example:

  • A massage company might target high-stress workplaces with on-site massages. After X amount of paid massages, an employee can get a free 30-minute massage or save up points to redeem for a 90-minute massage or a couples massage.
  • A coffee shop might offer variety — after a customer receives X punches on their loyalty card, they can choose from a free bagel, muffin, or cookie to ensure customers get what they want. D’Lite Healthy on the Go, a restaurant in Scottsdale, Arizona, offers a punch card for their loyalty program. Every time you order a drink, you get a punch on your card. Once your card is filled up, you get one free drink of your choice, whether it’s a 12-ounce iced tea or a 32-ounce smoothie.

Offer Mobile Features

A company that does not offer reward programs via an app or through an e-commerce website (where customers can log into their rewards account) can potentially miss the opportunity of an increase in business.

If an app is too expensive, consider text as a more affordable option. Square offers a loyalty program where customers put their phone number in at checkout, and receive a text notification every time they earn a star or a reward, reminding them to visit so they can redeem it.

Understand That Loyalty Marketing Has No Age

Over the past five years, there has been a focus on companies winning the interest of millennial customers.

However, consumers over the age of 60 have major purchasing power. At least 47.8 million of the United States population is made up of people over the age of 65 based on the United States Bureau findings. A McKinsey podcast in 2016 mentioned that by 2031 at least 51% of urban consumption is expected to grow in this age group.

It is essential for companies to use accurate data to find out what people past the age of 60 want in customer loyalty programs. The data can include where these consumers live, their daily essentials, annual earning, etc.

Most importantly, data from customer loyalty program can help an entrepreneur understand what matters to consumers today.

Here are a few interesting facts:

  • Most people in this age group have an interest in traveling locally or abroad, volunteer or donate to local non-profit organizations, and participate in hobbies in their downtime.
  • The Bureau of Labor Statistics projects that by 2024, about 164 million people over the age of 55 will be a part of the workforce.

Overall, this group of consumers appreciates a company that offers special discounts and benefits for being loyal customers.

So if your target market includes this age group, loyalty marketing should not be overlooked.

Common Customer Loyalty Mistakes

In order to design a loyalty marketing strategy that’ll actually be used, you’ll want to avoid some common pitfalls.

Here’s a few to watch out for:


Avoid sending too many emails, calling customers too frequently, or mailing too many pieces of customer loyalty program information. Over-communication = unsubscribes.

Complicated Rules

Spell out the rules of a program in a way that all customers can understand. A phone number or email form for inquiries is suggested to avoid misunderstandings that can lead to disappointed customers.

Treatment of VIP Customers

Some businesses treat regular customers the same as customers who purchase only once a year. What will you do with your program? I recommend offering a higher percentage of discounts and benefits to your big spenders.

For example, Sephora has three tiers of their loyalty program: Insider (free), VIB (spend $350 per calendar year), and Rouge (spend $1,000 per calendar year). The rewards that customers can redeem vary, depending on their status. (But customers can see all levels of rewards — which may encourage them to spend more.)

Do you have a loyalty marketing strategy in place? 

About the Author

Makeda Waterman

Makeda Waterman is a freelance writer who writes for a variety of companies, websites, and news publications. She has clips from Huffington Post,, and Elite Daily, among others.

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