Are you tired of lackluster results from your loyalty program? Do you feel like you're offering the same old rewards and not seeing any increase in customer retention? Well, fear not, because in this blog post, I will share with you 10 fool-proof ways to improve your loyalty program in 2025, including now so popular AI.
If you are already running a loyalty program but seek ways to improve it, you’ve come to the right place. Check out the list of best ideas for enhancing your loyalty programs and other undertakings focused on garnering customer approval and attachment.
Even if you’re not a professional Counter-Strike player, you can still appreciate the rush of adrenaline and excitement that comes with beating levels, collecting points, and receiving rewards. Setting up a flat, one-dimensional loyalty schemas does not sit right with modern customers anymore.
The excitement that arouses with gamified experiences stems from popular marketing psychology tricks, namely the Novelty Effect, Urgency, and Windfall Gains.
To cut the scientific talk short, the brain creates dopamine (good guys) each time it is faced with a unique and new experience. This simple chemical dependence is responsible for the breakneck pace in marketing and sales efforts to come up with new campaigns, programs, and content and work on improvements round the clock. In conclusion, people don’t like stagnation.
Well, going beyond a one-level loyalty program is the way to go. Try out adding multiple tiers and levels to your loyalty incentives (e.g., Sephora Club), visualize the journey customers need to take to reach the top, and keep your program rules simple. Remember that your customers won’t beat the game unless they know the controls.
Your ideal loyalty program will undoubtedly take many different forms depending on your business model and the target audience. The most popular type of a loyalty solution is a point-based loyalty program in which customers collect points that later on can be redeemed for material rewards. This form of a loyalty solution suits best businesses that thrive on high intensity and value of customer orders.
Remember not the rest on laurels as most customers are a bit tired of this formula and may seek more innovative loyalty solutions.
Note: Discount and gift cards are an excellent way to go, as customers would need to return to redeem their rewards. Therefore, customers receive your products that they enjoy at a discounted price, and you earn bonus purchases.
As I mentioned earlier, the classic point-based formula in which 1$ equals 1 point isn’t the best fit for the modern market full to the brim with competition and ever-changing customer trends. Take a look at the Starbucks loyalty offer. This leading cafe chain decided to reward customers also for engagements, not just purchases. An opportunity to earn extra points for activities such as leaving a review, celebrating a birthday in the café or making an order via the app, makes the program more dynamic and tailored to customers’ needs.
Speaking of the mobile app, the advent of mobile culture shouldn’t be overlooked in your loyalty strategy. Creating a loyalty solution that’s always within reach in a handy form of a mobile app is something to consider. Looking at the US, approximately one-in-five American adults are “smartphone-only” internet users - that’s around 28 million people using smartphones as their only source of information. That’s a significant number that you don’t want to skip.
If only your marketing team is aware of the loyalty program, you’re not going to get too far.
Launching a loyalty program is a multi-layered undertaking, and so it requires open communication between various teams, including (obviously) marketing and sales, IT, customer support, upper and lower management, and even legal teams. If you are offering your products in brick-and-mortar stores, make sure that the shop assistants know the ins and outs of your program and that they talk about it every chance they get. Lack of proper exposure is synonymous with badly-performing loyalty incentives.
Perhaps, it’s a little off-topic, but when Airbnb first launched its widely-known referral program, it fell flat. But the problem didn’t lay with the program itself, but rather with proper education of Airbnb employees. When asked about the program, some of them admitted never hearing about it before. Don’t let the same thing happen to your customer loyalty solutions.
Imagine buying a new book that you wanted, and then instead of enjoying it straight away, you need to put it on the shelf for a week. What do you feel? Annoyance, weak strings of anger, disappointment? Yup, you don’t feel the initial excitement due to the gratification delay.
Your loyalty solutions should be designed in a way that allows for fast points redemption, speedy reward delivery, and points conversion. The longer customers need to wait for the actual fruits of their loyalty towards your company, the more annoyed they will end up.
You can’t expect your loyalty program to win all the awards right after launch. There is time for initial design, but you also should make time for modification, changes, and updates. Track customer data, engagement rates, and loyalty metrics, such as participation levels and redemption numbers. See which rewards steal customers’ hearts and which are usually overlooked. In short, aim for perfection and always give yourself time and tools to adjust the program to any obstacles that arise along the way.
If you have decided to use a SaaS loyalty solution provider instead of building in-house loyalty architecture, make sure that your loyalty provider meets the following criteria:
According to Forbes, 75% of customers expect businesses to use technology to create better customer experiences. Interestingly, the same research shows that over 60% of consumers are open to using AI as a way to improve their consumer experiences.
Taking those things into account, there is no doubt that AI has the potential to revolutionize loyalty management in the nearest future. Hence, you should not hesitate to employ such devices to improve the loyalty journey of your customers – from customer dialogue and overall UX experience to finally driving up your sales.
As for the loyalty program, AI chatbot devices can help you keep your customers informed about the benefits of your loyalty program and any changes made within its rules. Remember that regular communication is key to customers feeling more connected not only to the program but the brand itself.
ChatGPT is one of AI's most popular solutions capable of natural language processing, understanding, and generating human-like responses to text-based inputs, making it useful for various applications such as chatbots, customer service, and content creation. This means that you also can use ChatGPT to make your own loyalty campaign more effective and tailored to the exact needs of your consumers.
Accordingly, the application is useful to millions of people and can be so for your loyalty campaign as well. Below there is a list of ways in which ChatGPT as an AI language model can prove effective in improving the loyalty experience for your customers:
Chatbots can help increase customer engagement with the loyalty program by providing instant support and answers to various customer queries. Whether they have questions about products, loyalty program conditions, or delivery options, consumers can access the chatbot from anywhere at any time, and immediate answers indeed prove valuable in terms of nurturing customer loyalty and trust in the brand.
You can also train your chatbot to provide customers with tutorials and how-to messages to educate them about using your products or services, or allow consumers to book appointments through chatbots making the process seamless and pleasurable. The possibilities are endless.
ChatGPT-powered chatbots can collect and analyze customer data, such as purchase history, preferences, and feedback. This data can help you tailor your loyalty program and offer personalized incentives that are more likely to resonate with your customers.
Without a doubt, chatbots are available 24/7, which means customers can access info about the loyalty program and rewards at any time of the day or night. Such availability time window increases customer convenience and improves customer satisfaction daily. Being a part of a brand ready to answer its customers' needs is an invaluable experience for every consumer.
Chatbots can handle a large volume of customer inquiries and requests, which means you can scale up your loyalty program without worrying about customer support capacity. A ChatGPT-powered chatbot can help you manage a more extensive customer base and increase loyalty program participation.
Chatbots can use AI to provide personalized rewards and incentives to customers. By analyzing customer data and behavior, ChatGPT can suggest special rewards that are tailored to the customer's preferences and past behavior to influence their shopping habits. Receiving offers that just suit a particular customer's needs will certainly make them love your brand even more.
Overall, ChatGPT is a great tool for creating effective communication with your customer base. As long as you know what your customers want and are always ready to answer their needs, you can successfully nurture their loyalty.
Importantly, ChatGPT can also be used for content creation. Your marketing can take advantage of the application and develop marketing communication – for example, write email sequences or social media posts – with its help. Moreover, ChatGPT can help you generate names of programs, and arrange tiers along with their structure. Later on, it can facilitate generating the structure of awards and optimizing them.
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