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How to Create a Rewards Program That Keeps Customers Happy in 13 Steps?
Karolina Kmita
Karolina Kmita
April 24, 2023
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Creating a Rewards Program That Keeps Customers Happy in 13 Steps?

Loyalty programs have become increasingly popular among businesses of all sizes in 2023. In fact, according to a late 2022 survey, seven out of ten Americans believed loyalty programs were a major component in ensuring their commitment to their favorite brands. However, as the saying goes, Rome was not built in a day. Without a good plan to build a loyalty program, your best efforts may come to naught. In this blog post I will focus on how to build an effective rewards program step-by-step, but first let’s start with the basics.

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How does a reward program work?

A reward program, also known as a loyalty program, is a marketing strategy that encourages customers to continue doing business with a brand by offering them rewards or benefits for their loyalty. These rewards can come in many forms, such as discounts, free products, exclusive or early access to new products, or other perks that are typically earned by customers through repeat purchases or other desirable actions.

The ultimate goal of a reward program is to build a loyal customer base and foster long-term relationships with customers. Whether you're a small business owner or a large enterprise, Voucherify can help you create a loyalty program that keeps your customers coming back for more. Here's how you can get started:

How to build a rewards program in 13 steps?

1. Define clear program goals

Before you begin building your customer rewards program, it's important to define your objectives. What do you want to achieve with your program? Are you looking to increase sales, encourage repeat customers and purchases, or generate customer referrals? Understanding your goals will help you design a rewards program that aligns with your business objectives and make it easier to set up OKRs and KPIs.

Example of a loyalty program from Frank Body

2. Understand your target audience

Understanding the target audience in loyalty programs requires thorough market research and data analysis. Before launching a loyalty program, it is crucial to tailor your customer loyalty program to their specific needs and preferences. By gaining a deep understanding of your target audience, you can also identify the key drivers of loyalty and create a program that resonates with them, leading to long-term customer engagement. Such study will determine which program model you should choose (online, offline or mobile-based), as well as which program structure to implement; for example, if we have price-sensitive clients, a points program with cash-back or discounts would work best.

Learn more: What type of a loyaly program to choose?

Starbucks rewards program

Voucherify provides businesses with CRM capabilities that can be used to comprehend the target audience. By collecting and examining customer data, including demographics, purchase history, and engagement patterns, you can design a rewards program that will be tailored to the needs of your customers as well as your brand, allowing you to kill two birds with one stone. What’s more, to get a single source of truth about the customer, Voucherify also offers integrations with Customer Data Platforms like Segment and mParticle.

3. Choose the right type of loyalty program

Different types of loyalty programs, such as points-based or tiered programs, appeal to different customer segments and behaviors, so it's important to choose a program that aligns with your target audience's preferences.

Choosing the appropriate type of loyalty program in Voucherify depends on several factors such as the business goals, target audience, and budget. Some popular loyalty program types that can be created in Voucherify include points-based reward programs, tiered programs, punch-card programs, and cashback programs, each with its own unique benefits.

4. Design a compelling and easy-to-understand program

Designing an easy-to-understand loyalty program is crucial because it increases the likelihood of program participation and engagement, ultimately leading to higher customer retention and revenue. A simple and transparent loyalty program also fosters positive customer experiences, builds trust and loyalty with your brand, and minimizes confusion or frustration that could lead to disengagement or churn.

tarte rewards program

When designing a compelling and easy-to-understand rewards program with Voucherify, consider the following key elements:

  • Earning Rules: Set clear and straightforward earning rules that are easy for customers to understand. For example, use a simple point-based system where customers can earn points for each purchase or action. Avoid overly complex rules that may confuse or discourage participation.
  • Customer Segmentation: Utilize Voucherify's customer segmentation features to tailor the rewards program to different customer segments based on their preferences, behaviors, or demographics. This allows for personalized offers and incentives that are more relevant and appealing to each segment.
  • Points Expiration: Carefully consider points expiration to strike a balance between motivating customers to redeem rewards and preventing points hoarding or devaluing. Clearly explain expiration rules  to customers to avoid any confusion or disappointment.
  • Tiers: Voucherify allows businesses to use loyalty tiers in their loyalty program to reward customers based on their loyalty and spending behavior. By creating tiered structures with different benefits and rewards for each level, brands can trigger customers to spend more and increase engagement and retention

5. Offer attractive and relevant rewards

Rewards that are desirable and aligned with your customers' preferences and needs create a sense of value and appreciation, incentivizing repeat purchases, increased spending, and word-of-mouth referrals, all of which contribute to a successful rewards program.

Sephora loyalty program

To offer attractive and relevant rewards in a loyalty program with Voucherify, you can use a range of rewards such as discounts, free shipping, cash-back, gift cards, and exclusive access to events. Voucherify also allows you to customize these rewards based on customer behavior and preferences, ensuring that your loyalty program is engaging and effective.

Learn more: What are the best B2B and B2C loyalty rewards?

6. Create an engaging user experience

Creating an engaging user experience in a loyalty program is crucial because it enhances customer satisfaction, encourages participation, and fosters brand loyalty. An engaging user experience in customer rewards programs can include features such as a user-friendly interface, personalized rewards, gamification elements, and seamless interactions across various channels, all of which contribute to a positive and memorable experience for program members.

To create an engaging user experience in a loyalty program, you can use Voucherify's API to integrate your loyalty program seamlessly with your website or mobile app, making it easy for customers to track their rewards and redeem their vouchers. Additionally, incorporating gamification elements, such as point systems, tiers, and challenges, can add a sense of excitement and competition, motivating users to actively participate and earn rewards.

7. Promote your loyalty program across multiple channels

By enabling loyalty program participation across multiple channels, such as online, in-store, or mobile, brands can tap into different customer touchpoints and reach wider audiences.

To promote your loyalty program omnichannel, use Voucherify's third-party integrations and framework-agnostic API to ensure a seamless and engaging loyalty experience for your customers, regardless of the channel they choose to engage with.

8. Train your staff on the program

Your staff members are the front-line representatives who interact with customers and can educate them about the benefits of the program, ultimately driving customer retention and repeat purchases. Proper training can help staff understand how to effectively communicate and incentivize customers to sign up for the loyalty program, increasing overall program participation.

Loyalty program example

Well-trained staff can also effectively handle customer inquiries, troubleshoot issues, and provide personalized recommendations to the best customers,  improving customer satisfaction and loyalty.

9. Implement effective tracking and measurement mechanisms

Implementing effective tracking mechanisms in loyalty programs is essential because it allows you to assess the program's performance, identify areas for improvement, and optimize the program's impact. By tracking key metrics such as customer engagement, retention, loyalty breakage, and revenue, you can understand the program's effectiveness and make data-driven decisions to improve your rewards program over time.

Wild poppies loyalty program

Integrating Voucherify with customer relationship management (CRM) or analytics tools can provide insights into customer engagement, redemption rates, and ROI, enabling brands to make data-driven decisions for continuous improvement.

Learn more: How to calculate ROI of your loyalty program?

10. Analyze and optimize program performance

By regularly reviewing program metrics, analyzing customer feedback, and testing new strategies, you can identify areas for improvement, optimize the program's effectiveness, and ensure that the program remains aligned with your business goals and customer needs.

Voucherify loyalty program demo

Voucherify provides comprehensive reporting and analytics features that allow you to track the performance of your campaigns. You can monitor key metrics such as customer engagement, redemption rates, and ROI to optimize your program and make thoughtful steps towards improving your loyalty program.

11. Communicate with your customers regularly

Remember that a rewards program is all about engaging with your customers. Interact with your clients through your rewards program by sending them personalized offers. Communicating with your customers regularly is vital because it allows you to keep your loyal customers both engaged and informed about the latest program updates, promotions, and rewards.

With Voucherify's powerful messaging integrations, you can easily create and send personalized messages to your customers via email, SMS, push notifications, and other channels, fostering a strong relationship with your customers and enhancing their overall loyalty program experience.

12. Listen to customer feedback and make improvements

Respond to your customer’s feedback, and show appreciation for their loyalty. This will help you build a strong and loyal customer base through the benefits offered by your brand.

By actively seeking and incorporating customer feedback, you can continuously refine your loyalty program, ensuring that it remains relevant and engaging. Voucherify makes it easy to update and change program rules and benefits according to the needs of your high-value customers. All it takes is a few clicks on a Dashboard, no coding work necessary.

13. Monitor and adapt your program to changing customer needs

To keep the customer experience with your rewards program engaging and effective, it's important to continually update and improve it. You have to make sure that your benefits program remains relevant in a dynamic market environment, enabling you to stay ahead of the competition and meet the evolving needs and preferences of your customers. Think here about booming loyalty apps, sustainability initiatives, gamification elements or Web3 rewards.

Voucherify allows you to make changes to your rewards program on the go, so you can refine and optimize your program based on customer feedback and performance data.

Summary

At first glance, building an effective customer loyalty program may seem like a tough nut to crack. By following the steps mentioned above, you can create a rewards program that will keep your customers happy. What’s more, Voucherify can provide you with the tools to take your rewards program to the next level. The ability to define program goals, design compelling rewards, set up rules, customize the program, promote it, and track performance allows brands to optimize their rewards program and drive customer loyalty can help you increase sales, and enhance overall customer satisfaction.

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