Customer loyalty programs can look very different for different types of companies. Everything from a grocery rewards card to a frequent flier club to a B2B customer community counts.
For companies that have yet to get in on the action, though, there are a lot of questions to answer before they can create an effective customer loyalty program:
You have to start somewhere! Take the (relatively) straightforward decision of whether you’ll use instant rewards or a points-to-rewards structure. Here are three questions to ask yourself that should help you evaluate which option is better for your own customer loyalty programs.
READ MORE: 10 Stats to Show the Importance of Rewarding Customer Loyalty Now
It’s the million-dollar question for marketing and sales teams. The past few years have seen many companies working under tighter budgets to try to reach higher goals. And even though customer loyalty programs can do wonders for your retention and revenue, they inevitably take money to set up and maintain.
While programs that use instant rewards typically get more engagement — everyone prefers to get their reward right away, of course — those that use a points-to-rewards structure can often be a more cost-effective option. Customers need to collect enough points by taking multiple actions, so it takes them longer to earn each reward. Also, since you have control over the value of the reward, the number of points that participants need to earn, and how many they get for each action, this structure offers a lot of budget flexibility.
Customer loyalty programs can look very different for different types of companies. Points-to-rewards make perfect sense for grocery, gas, and other retail businesses — spend more money, earn more points, redeem more rewards.
But what about B2B companies? Or technology companies that sell a solution you only have to buy once? Or subscription-based purchases that renew annually? In those cases, instant rewards may make more sense, or you may have to adjust the activities you’re incentivizing.
In tandem with thinking about what structure makes sense, the other big question is how frequently you want members to engage. Because retailers want customers to come back and buy as much as possible, points are a logical choice.
But other industries may be looking to use customer loyalty programs to boost other parts of their engagement strategy. Your needs can help dictate your structure. For instance, if your goal is to collect occasional referrals or useful feedback in a yearly customer survey, then instant rewards let you thank those customers for a single action.
However, if you want customers to constantly engage with you by posting in a community forum, taking product training workshops, leaving online reviews, and sharing your posts on social media, then a points system may be more appropriate.
The next question: Is there a tool that can help me streamline my points-based customer loyalty programs? In fact, there is! The PointsJoy solution from BHN Rewards can even help automate your processes. Request a demo to learn more.
Hannah is a reformed journalist who has more than 15 years of experience and now focuses on content marketing for innovative tech companies.
Hannah is a reformed journalist who has more than 15 years of experience and now focuses on content marketing for innovative tech companies.
