The Developement of Successful Customer Loyalty Programs

We know that loyalty program are great marketing tools for businesses trying to retain customers, however do you know how these programs are created? Or what it takes to develop a successful loyalty program? In fact, the process takes place over the course of several years through which businesses convert you into loyal customers. During this development process, it is important to create a list of guidelines and questions that can assist in implementing the loyalty program. This may include:

 

·         Evaluating the product

 

·         Identifying the value of the reward

 

·         Creating program goals

 

·         Determining the cost of the program

 

·         Developing communication outlets to market the program

 

·         Determining the individuals required in the organization and management process

 

·         Setting up a database

 

·         Preparing a strategy for program defects

 

WATCH: The following video demonstrates and explains how to implement a successful customer loyalty program.

 

 

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In addition to the above guidelines, there are three basic criteria in creating an effective loyalty program. These are: management support, customer communication, and automated databases.

 

·         Management Support: In order to create a successful loyalty program, it is important that top management ensures each member of the business is informed and supportive of the program and process involved.  Management is required to begin the developmental stages of the program such as creating goals and setting up the program database. The entire process is ongoing and long and may take up to 2-3 years before completion therefore during this process management must display patience and support.

 

·         Customer Communication: Participation from customers is crucial to jumpstarting any loyalty program, thus it is important to communicate regularly and effectively with its participants. Businesses must motivate you to come and shop at their store with the difficult task of converting you into a loyal customer. When creating loyalty programs, it is crucial to make sure that the value of the reward will effectively satisfy and excite the customer. Therefore clear communication is important to properly introduce the program and its incentive to buyers.

 

·         Automated Databases: Almost all loyalty programs include an automated database that tracks member’s information, purchases and cumulative points. The database is usually created through the internet, where it can be easily accessed through the businesses website. The purpose of the database is to collect, monitor and evaluate the information coming in from members and their purchases, in order to better accommodate members and retain their loyalty.