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7 Customer Loyalty Programs to Keep your Customers Happy

Gokul Gopi

Last Updated:  

31 May 2024

7 min read

Audrey observed a heartwarming scene at her usual store. A nervous teenager, preparing for a job interview sought a clip-on tie but found only regular ones. Dennis, an employee, not only showed him how to tie it but also taught him a firm handshake and how to answer challenging interview questions. The team cheered the teenager on as he left.

Blown away by this exchange, Audrey took to Facebook to record this incident, where it garnered thousands of likes and shares.

Apart from such brilliant media attention and great PR, the store also earned a delighted and loyal customer (and quite a few others) who’d never have a second thought about their favorite store.

Any guesses on the store? Read until the end of this blog to see if you guessed right! So, that’s a little intro to customer loyalty.

Jeffrey Gitomer quote

Customer Loyalty Programs: An Introduction

Making that extra effort, going that extra mile to care for your customers, always pays well. But that doesn’t mean you have to corner each individual customer and smother him/her with special attention.

It’s all about the benchmarks. Long gone are the days when companies relied on customer satisfaction as their standard. Now, the focus is on customer delight and customer loyalty.

So why all this buzz about retaining customers and customer loyalty programs?

Even though returning customers amount to only a third of the overall money spent online, they spend nearly three times more than one-time shoppers. Also, acquiring a new customer can be as much as five to ten times higher than the cost of retaining an existing customer.

From those big names and industry superstars to a local restaurant owner, everyone tries out customer loyalty programs to keep their customers hooked on to their brand.

According to Zendesk’s survey, 87% of customers think that brands need to put in more effort to provide a seamless customer experience. We have a long way to go mates!

Delighted customers buy more from you and are willing to pay more! Click To Tweet

What is Customer Loyalty?

Customer loyalty is not just one phase of your building up of reputation. It’s in every phase of your customer’s journey. But is that happy smiley, Five-star rating or that online review from your customer really important? Here goes!

  • Delighted customers buy more from you and are willing to pay more.
  • A loyal customer’s endorsement can outstrip all other marketing efforts. They refer others to the company, saving you the marketing and advertising costs. (Much like those low-budget movies that became blockbusters because of positive word of mouth!)
  • They are more forgiving when you make mistakes – even serious ones. In addition to it, if you have a system to correct errors on the spot, they become even more loyal.
  • Also, companies with happy customers tend to have happy employees who are genuinely engaged in work.

But then, how to provide something worthy that your customers would love and keep on coming to you for more? Designing a customer loyalty program needs quite a bit of effort. Here are a few things to keep in mind:

Mastering Customer Loyalty: Top 3 Insights

  • Create a Goal

The first step towards starting a customer loyalty program you need to think about is, “what is your goal i.e. what are you going to provide as an incentive? An incentive can be anything from gift coupons to discounts on the next purchase or a giveaway.

  • How Will You Promote the Incentive?

The second step should be “how to promote it.” You can either use social media platforms or offline mediums like newspapers or flyers or pamphlets. It all depends on where your target audience is located and what your marketing budget is.

  • Allow Your New Customers to Get Benefitted

Even before a person gets enrolled in your brand, he/she should know how they can be benefited from being a customer of your brand.

From a simple text message wishing customers on their birthday to a scavenger hunt game through the city, companies have tried a lot of strategies to enhance customer experience.

bad customer service is expensive mistake

We have listed a few of these customer loyalty strategies you could try implementing:

7 Essential Tactics for Top-Notch Customer Loyalty Programs

1. Giveaways

Something that resonates with the interest of your customers would be the best reward for your customers. A well-executed giveaway can help you grow your business with relatively low cost and create a buzz around in the market.

Running giveaways, of course, with exciting prizes (limited editions would be awesome!) is a fantastic way to build your social media following on sites like Facebook and Twitter.

They can help you grow your network, gain product exposure and increase the number of email subscribers.

Consider working with an influencer or a celebrity to help give your giveaway an extra “wow” factor.

2. Gift Cards

If there is one simple way to promote your brand, delight your customers and be assured of more sales, all at once, then that’s by using gift cards.

Gift cards obviously urge customers to do more purchases, but on an average, customers spend 20% more than the gift card value. Also, gift cards are the best way to recommend a new brand or a new place to someone. With the card in hand, they’re nearly certain to visit that new hotel or to try that new brand of shoes.

Be sure to boost gift cards during holidays and other special occasions (for obvious reasons). Also, if possible, ditch the physical cards and go-mobile!

3. Product Discounts and BOGO Offers

Offered as a percentage or dollar amount off the purchase, product discounts are still one of the most sought-after rewards. About 93% of shoppers use discount offers throughout the year.

Providing a discount offer would give your customers a reason to make repeat purchases. Another way to make things more engaging is by introducing creative currency or reward points, which can be converted to discounts.

BOGO (Buy One Get One) is quite similar to normal discount offers. Mostly used in the clothing industry, these offers would make normal customers make their way back and also, it’s likely you’d score a new one.

customer loyalty quotes

4. VIP Privileges

We have all come across those gazillion quotes and motivational images circulating the internet saying ‘You’re Special’ and ‘You’re one in a million’. And we feel connected to that higher calling while we read it. But why?

Everybody likes to be special or at least be treated special. This is where VIP Privileges come into place. By categorizing your best and most regular customers into a VIP group, you are motivating them to be more loyal to your brand.VIP programs take reward points or loyalty points to the next level by giving customers an elevated status and exclusive offers.

A famous example of one of the best customer loyalty programs would be the Amazon Prime membership.  Through this VIP program, Amazon categorizes its most loyal customers and gives them special offers, discounts, and even free gifts.

Shoppers not only work to earn additional benefits but will also try to show that they are of a higher status than their peers.

5. Make Free Shipping the Standard

Research says that 54% of shoppers will abandon their cart if shipping is too expensive. In 2017, this was regarded the leading cause for lost customers during checkout.

Online shopping is at an all-time high and now, free shipping is no more a benefit, but the desired standard.  Internet shopping giants are already offering free shipping on most orders.

Free shipping can be leveraged to drive customer engagement with your rewards program. If bearing the cost is outside your budget, offer it to members who spend over a certain amount, so that its less of a burden for you.

Free shipping can also be used as an exclusive VIP member benefit.

54% of shoppers will abandon their cart if shipping is too expensive. Click To Tweet

6. Customer Communities

The best customer experiences are those which create an emotional connection with the customers. One of the best ways to do this is by creating customer communities.

When customers say that they connect with your brand, they are actually connecting with the other people who feel the same affinity towards your brand. Rather than just selling a ‘product’, let them buy their way into a community of like-minded people or people they want to be more like.

Creating customer communities can help in reducing customer service calls because the members of the community will help out to each other. Also, these communities can provide you an in-depth knowledge about your customers’ likes, wants and purchase histories, thereby helping you to tailor future product offerings and to keep them content.

XBox has its own community called the XBox Ambassadors providing immense support to fellow gamers as well as the brand.

7. Rewarding Customer Feedback

Customer feedback is crucial in measuring the success of your product, things you need to improve and in obtaining critical metrics like Net Promoter Score.

Not only should you encourage your customers to give feedback on your products, you should also urge them to give you feedback on your loyalty programs as well.

Engage with your customers in a heartfelt way using tools like conversational surveys. It’s less of a survey and more of a chat, making them feel truly valued. One of the standout platforms in this realm is SurveySparrow. Many esteemed brands trust it to capture genuine feedback. Why not give SurveySparrow a glance? Dive into their free version and experience the difference firsthand.

conversational surveys,

You can also reward your customers for their feedback and sharing their opinion. Make them feel special like any other loyalty program should be doing. When customers feel that their opinions are addressed, they keep on being faithful to your brand.

To Wrap Up..

We have just listed a few of the innovative customer loyalty programs being followed by companies around the world. Be creative and build upon these strategies to design one of your own.

Be careful to not mistake customer inertia with customer loyalty programs. Just because they stick around and don’t complain, it doesn’t mean that they’re emotionally attached to your brand. Loyalty programs make sure your customers appreciate your products and services and the way you deliver it.

…And you guessed it right. The store? It’s Target!

And if you were wondering, the kid cracked the interview and got his job. No wonder Target have a solid customer base alike no other store ever!

Gokul Gopi

Guest Blogger at SurveySparrow

Engineer turned creative writer. Passionate dreamer. Marketing enthusiast.

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