Building effective customer loyalty programs

Building an effective customer loyalty program is not an easy task. It requires careful observation of a lot of things especially when it comes to developing good customer relationship. Better decisions are to be made by looking at customer data, which should be customer oriented. Also, the loyalty program should provide enough rewards to meet customer’s needs and the reward points that customers earns should be easy for them to redeem. Most of the loyalty programs that we are using today have some sort of limits, which restricts redeeming our loyalty points. To overcome these limits, a customer oriented loyalty program should be developed. While developing cash back rewards program, percentage is a very important factor. For example, some companies give cash back of 2% per $1000 which is only $20. Such things should be considered while designing reward programs.

Relevance is also an important part of effective loyalty program. There should be certain time limits in which the reward points are collected and can be easily redeemed. For this purpose, they need to distinguish between customers who spend more and those who spend less. Sometimes customers, who spend less in store, have to wait for a longer period of time before they can redeem their rewards. The customers who collect points quickly by spending more in stores are able to redeem their points rapidly. Furthermore, loyalty card companies should set out a certain time limit for both types of customers in order to redeem their points swiftly. Customer participation is also very important in designing an effective loyalty program. Therefore, the surveys are needed to be done in order to understand customer’s desires properly. The type of brand customers are looking to spend more on can prove an effective way to make a loyalty program more attractive to customers.