Unlocking Success: A Guide on How to Create a Customer Loyalty Program

Amazon’s Executive Chairman Jeff Bezos once said, “Your brand is what other people say about you when you’re not in the room.”  If that’s true — and we believe it is — then word-of-mouth marketing is a brand’s best friend. Furthermore, a customer loyalty program is an absolute necessity.

What happens when your existing customers sing your praises online? Things like sales happen: a recommendation from a friend is the #1 reason consumers make a purchase on social media. And things like increased brand awareness: 97% of Gen Zers discover new products on social platforms like Instagram and TikTok. 

One powerful tool for boosting word-of-mouth marketing is implementing a customer loyalty program. If you’re in the business of e-commerce and/or social commerce, this is especially true for your brand. Read on to learn about customer loyalty programs, their benefits, and detailed recommendations for creating one.

What is a Customer Loyalty Program?

A customer loyalty program is more than just a marketing gimmick; it’s a strategic approach to attract and retain customers. With BrandChamp, you can structure your program in many ways, creating different tiers for various types of customers. For example, an athletic shoe company might segment ambassadors into a tier for runners, a tier for tennis players, and a tier for yoga enthusiasts. Each tier could be assigned to complete unique activities in exchange for specific rewards based on their interests.

Members of your customer loyalty program might be called brand ambassadors, affiliates, VIPs, or something customized to your company, like EHPLabs’ All Stars. Regardless of how a program is structured, the inherent workings of most programs are the same: loyal customers receive rewards for supporting a brand they love. 

The goal is to create a positive feedback loop that encourages repeat business and empowers customers to promote your brand. Let’s learn how it’s done!

How to Build a Customer Loyalty Program

Building a successful loyalty program requires careful planning and execution. Here’s a step-by-step guide:

• Choose Program Structure: Decide on the type of program – point-based, tiered, or subscription-based. Many BrandChamp clients successfully run hybrid programs that combine these elements. 
• Outline Incentives: Define the rewards and incentives customers can earn through the program.
• Platform Selection: Utilize software like BrandChamp to manage all aspects of your program in one place.
• Invite Customers to Join: Invite your existing customer base to join or apply to your program.
• CTA in Emails: Include compelling Calls-to-Action in emails to encourage customers to sign up or apply.
• Landing Page Addition: Create a dedicated loyalty program landing page on your website that provides comprehensive information.

Programs run through BrandChamp have access to our team of experts to help them optimize their programs to yield the highest returns for their brand. 

(For a more detailed look at how to start a brand ambassador program in particular, we put together this guide.) 

Benefits of a Customer Loyalty Program

If you manage your customer loyalty program correctly, it will be a win-win for you and your customers. With a thriving program, you will see: 

• Increased Customer Retention: Retaining existing customers is more cost-effective than acquiring new ones. And, on average, the top 1% of your most loyal customers will spend five times more than the remaining 99% of your customers. 
• Competitive Edge: Offering distinct rewards sets you apart from competitors, making customers more likely to choose your brand over others.
• Enhanced Engagement: Loyalty programs create a two-way interaction, improving customer engagement and strengthening connections with your community.
• Boost in Revenue: Satisfied and engaged customers will likely spend more, directly contributing to increased revenue. They’ll also bring in referral sales, which can significantly impact your bottom line. 
• Expanded Customer Base: Happy customers become brand advocates, attracting more individuals to join your customer community.

Below, we’ll get into what a well-managed customer loyalty program looks like — and what you can do to ensure yours is better than the competition’s!

Best Practices for Building Your Program

Did you know almost 70% of Millennial consumers intend to join customer loyalty programs in the coming year? Moreover, more than 50% of Gen Z consumers plan to increase their participation in loyalty programs. To ensure that all those potential customers choose your loyalty program, not another brand’s, consider these best practices:

• Create Great Incentives: Make rewards attractive and valuable to your customers.
• Nurture Connections: Foster a sense of community by encouraging interaction among members and by having your team engage with ambassadors on a regular basis.
• Spotlight Customers: Highlight customer stories, user-generated content, and experiences in your marketing efforts.
• Make it Easy to Participate: Simplify the process for customers to participate and redeem rewards. With BrandChamp, you can automate your rewards so your brand ambassadors don’t have to wait for you to send them out manually. 

Program Management Apps and Platforms

To launch a successful program, you’ll want to use a comprehensive management tool. Relying on multiple spreadsheets or tools to keep track of rewards will only drag you down. For an exceptional program, explore these popular apps and platforms:

• BrandChamp: A versatile platform offering comprehensive loyalty program management.
• S-Loyalty by Shopify: Known for its e-commerce capabilities, Shopify also provides robust loyalty program features. Our platform integrates with Shopify for a seamless experience. 

In conclusion, a well-designed customer loyalty program is a valuable asset for any business, benefiting brands and customers alike. Companies can cultivate lasting relationships and thrive in today’s competitive market by implementing the outlined steps above and incorporating best practices. To get started, request a BrandChamp demo today!