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WHAT IS A CUSTOMER LOYALTY PROGRAM?

Imagine you own a grocery store and attract a good business from local residents. After a few months, a big grocery store opens nearby and takes away a major share of your business. What would you do?
As you consider options, one of the most immediate and easy action you can take is to implement a customer loyalty program.
A customer loyalty program is a structured rewards program offered by a business to customers who frequently make purchases. A loyalty program may give a customer free merchandise, rewards, coupons, or even advance released products.
What is the purpose of a Customer Loyalty Program?

Loyalty programs have several goals
·       Improve Sales
·       Increase Business
·       Keep the customer coming back on a regular basis
·       Strengthen the relationship between customer and business

If the rewards of the program are unattractive or uninteresting, the program may see little success. But if benefits are enticing, it can help increase sales and encourage customers to return for their next purchase.

Here are some ideas for building a loyalty program that might work for your business.

ü Use a simple point LOYALTY PROGRAM
The point system is one of the simplest reward programs. It’s based on a simple principle: spend more to get more.
Every time a customer makes a purchase they get a certain amount of points depending on the size of their purchase. For example, Rs.100 could be one point or every Rs.100 is two points.
These points can then be redeemed for rewards. Points can be converted to discounts, coupons, gifts and can also be used for subsequent purchases. This way you’re not only increasing your average spend per customer, you’re also encouraging them to invest in your brand. Thus, reducing the likelihood of losing the customer to a competitor.
The point system should be easy for customers to understand and calculate, so make it simple. It works best for businesses that encourage frequent, short-term purchases.

ü USE A VISIT BASED LOYALTY PROGRAM
This is a stamp coupon type loyalty system, where the shop would stamp loyalty card every time a customer bought from them. Once the card is filled up, the customer gets a reward free.
There are a number of variants of this type of Loyalty solution. You can reward customers differently for every single visit viz., free coffee after 1st visit, free ice-cream after 2nd visit, free dessert after the 5th visit and free main course after 10th visit.

üuse an Item-based LOYALTY PROGRAM
Advanced loyalty programs like Winggz allow you to give loyalty points based on buying only certain items, which could be the high-end items and reward the paying customer handsomely. You get to know the customers that are discerning and are buying the best of breed items and you reward them.

ü Use a tier based LOYALTY PROGRAM 
The tier system is based on levels of loyalty. The more loyal your customers are to your brand the more valuable benefits and rewards they’ll receive.
The tier system is for long-term members where the size of the rewards increases over time, encouraging customers to stay loyal and buy items at higher prices. You need to find a balance between not making it too easy or too hard for customers to reach the next level. It has to seem realistic for customers to reach the next level if you want them to keep pursuing it.
You can use this loyalty rewards system if you have a high-priced business.

ü use a NON-MONETARY LOYALTY PROGRAM
Customer rewards can also be non-monetary in nature. This type of loyalty program will entitle your customers to something that they particularly want. With this option, you can offer them a reward that suits their lifestyle even if it is not related to your business. You can reward them for their frequent purchases at a discounted rate at a hotel or a spa service of their choice. This is all about understanding your customer’s business and lifestyle.

Winggz Customer Loyalty Platform has an expertise in delivering data-driven Customer Loyalty Programs for various sectors.
Once you’ve got your program up and running, it will run automatically and require a minimum of work. Keep it simple. Start with your existing customers. The key here is to understand your customers and know how you provide value to them.

Make your program about your customers, not your bottom line.


What loyalty program are you using? Are you using any other not mentioned here? Do let us know.

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