How to examine your consumer and which program to select out of all

Loyalty programs have become an expected part of any good brand, because why shouldn’t customers choose a brand that rewards them for simply loving their products?

If implemented right, loyalty programs could really help your business by retaining loyal consumers and driving long-term returns on your investment. But again, the emphasis falls on the implementation; how do you even begin to choose a loyalty program that works for your brand?

Loyalty programs that work are loyalty programs that recognize the consumer on a deeper, personal level and address their needs accordingly.

Let’s take an example:

If you log on to Amazon.com per se and find that they’ve recommended items like books or music based on your previous purchases, you feel as if the website knows you, and you’re more likely to spend hours browsing through their suggestions, which could dangerously end in you adding 10 items to your shopping cart.

The key to choosing any loyalty program should lie first in getting to know your consumer: When do they shop? What do they like? What times are their preferred shopping times? Do they only shop during sales, or are they year-long buyers? Do they like rewards systems, or do they prefer loyalty cards?

All of these questions and more are a starting point for you to familiarize yourself with your consumer base a little bit better. Collecting this data is simple: you can send out an email survey, ask customers a few questions on your loyalty program app or loyalty program platform to better enhance their experience, or in some cases, collect this data in person directly at the point of sale.

Once you’ve had enough data to understand your consumer base, you have a wide range of loyalty programs to look at. Let’s look at some:

Points Loyalty System

This system works best for companies looking to enact frequent and short-term purchases and is usually used by brands such as Starbucks and Sephora. It’s flexible, customizable, and encourages consumers to make repeat purchases to gain points and earn rewards. This can take the form of a card, application or even just using your email.

The one con of it is that consumers will begin to expect immediate rewards, and some will be easily disappointed when they don’t see the instant benefit of this system.

Loyalty Card Program

This program differentiates between two types of consumers: the normal consumers, and the elite, exclusive consumers. Loyalty card members are made to feel prestigious and privileged because they can access special discounts, coupons and points those other consumers have no access to. It could take the form of a virtual card on a loyalty program app or platform or a physical card. The only con of this would be having to encourage consumers to spend more on higher value purchases.

Fee-Based Loyalty Program

Simple formula: pay a fee, receive benefits. This is perfect for customers who want immediate rewards without having to put in any of the work for it! It could attract lots of customers, but it is also makes it difficult to get in new customers on the long run and does not provide extensive data the way other loyalty programs do.

Some other loyalty programs that are worth looking at are coalition loyalty programs (operated by more than one business, like Azadea for example), cash-back loyalty programs, and mobile loyalty programs.