How to Start a Customer Loyalty Program + 7 Reward Examples

8 minute read

Team Mobile Messaging

Most businesses are interested in making money (shocking, I know). However, some businesses are wasting money without even knowing it. When it comes to spending your marketing dollars, are you sure you’re investing it towards the right mission?

It costs 5x more to acquire a new customer than to retain an existing one.

That statistic may seem surprising, but what’s more surprising is how many businesses know this fact and are still investing the vast majority of their efforts into acquiring new customers. Customer acquisition is critical to growing your business. However, you also need to create a strategy to help ensure your current customers are consistently engaging with your brand.

Creating a customer loyalty program or rewards program is a great option for showing your existing customers how much they matter to you. Plus, joining the program works as a great incentive for prospective customers as well.

How to Create the Best Customer Loyalty Program:

  1. Ensure your program is valuable.
  2. Turn your program into its own brand.
  3. Get people enrolled.
  4. Make it easy to track points.
  5. Remember, it’s not all about the rewards.
  6. Create multiple ways to earn points.
  7. Turn program members into brand advocates.

These seven steps should be the key foundation for building your customer rewards program. Let’s take a deeper look into each of the seven areas.

Why SMS is Critical to Effective Rewards Programs

Let’s take a brief pause before we continue. A lot of these steps we’ll be outlining are going to talk about using SMS for your rewards program. Is SMS necessary? No. Will it make your rewards program more successful? Absolutely.

Text messaging as a customer engagement channel is really resonating with customers. 75% of customers say they want to receive offers via SMS. Plus, SMS reports an average click-through rate (CTR) of 19% – that’s a whopping 15% more than the average email CTR.

Even the most loyal customers can forget to check their rewards points. Even the most well-written emails can end up in the spam filter. If you want to set your customer loyalty program up for the most success, integrating SMS into your strategy is essential.

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7 Steps to Create a Successful Customer Loyalty Program

1. Ensure your program is valuable.

One of the key elements of your customer rewards program is the rewards. While you don’t have to announce every reward your customers can receive, there needs to be an incentive to join the loyalty program.

When people sign up, you’ll likely be asking them to provide their email, mobile number, birthday, or more. That’s a lot of valuable information to give away without knowing how you’ll be rewarded. Make sure you’re ready to show valuable reward redemption opportunities that will be worth providing all this personal information.

2. Turn your program into its own brand.

Don’t think of this as just another marketing campaign. Your new customer rewards program is a big effort and should be a company-wide initiative. Giving your customer loyalty program a meaningful and memorable name will not only help customers remember it, but will also help elevate the status of the campaign across your company.

3. Get people enrolled.

It may be tempting to just drop all of your current subscribers into this program, but you will likely bring over people who aren’t the best fit for your program. While you may convert a couple of these unengaged subscribers into frequent shoppers, the majority will likely remain unengaged. If you’re judging the success of your customer loyalty program based on engagement, these users will definitely skew the results.

Instead, create a marketing campaign announcing the program to your current subscribers via email and SMS. Additionally, include sign-up forms for your customer rewards program in all channels you have available including your website, transactional emails, in-store displays, and printed receipts. Incentivize them with a special bonus reward for joining before a specific date to encourage urgency.

4. Make it easy to track points.

To keep customers engaged with your program and returning to make more purchases, they will need to know their reward status and how soon they’ll be eligible for another reward. While you and your subscribers can handle these loyalty programs manually, make both of your lives easier when you integrate your loyalty program with a mobile wallet.

Mobile wallet passes allowing your customers to seamlessly store their loyalty card and coupon. While you can send triggered email updates about reward status, a mobile wallet updates in real time giving customers instant access to their reward points.

5. Remember, it’s not all about the rewards.

Rewards are a great way to show you appreciate your customers, but they’re by no means the only way. The customers in your loyalty program are likely your biggest advocates. Provide them with opportunities to share their feedback about your products, services, and experiences with our company.

When it comes to feedback, put in the extra effort to follow up with customers afterwards. Whether or not you have the resolution the customer wanted, the act of following-up on an issue speaks highly for your company and the respect it has for its customers.

6. Create multiple ways to earn points.

The most common way companies reward loyalty points is a set number of points per each dollar spent. This is a great option and one we encourage. That said, if a customer stops making purchases, you’re left without an opportunity to reconnect with them.

Besides points based on purchases, consider options such as points for how long they’ve been a loyalty club member, for completing a feedback survey, downloading your app, or reviewing a past purchase they have made. Send triggered SMS messages with CTAs for these point-rewarding actions to keep your brand top of mind even if your customer hasn’t made a purchase recently.

7. Turn program members into brand advocates.

We already said your loyalty program subscribers are likely your biggest advocates. Take advantage of these advocates when you offer bonus reward points for getting additional people to join the loyalty program. Not only will your subscribers be rewarded, but it leverages your community as one of your greatest marketing assets.

7 Reward Examples for Your Customer Loyalty Program

Now that you’re ready to launch your customer loyalty program, it’s important to start putting together a list of possible rewards. Remember, you want your rewards to be valuable enough that it’s worthwhile for someone to join and stick with the program long term.

Below, we’ve pulled together a list of popular customer loyalty program rewards to get you started:

  • Discounts and Coupons – Discounts are always a win, but try to think of ways to make them unique. For instance, if someone has just passed their 12-month mark of joining your program, give them a 12% off coupon.
  • Exclusive Gifts – Consider offering an exclusive in-store gift as a way to thank your members while also incentivizing them to visit your store or make a purchase online.
  • Birthday Rewards ­­– Who doesn’t love a birthday gift? When people sign up for your rewards program be sure to collect their birthday. Then, send them an exclusive reward valid only for their birth month or week.
  • Early Access ­– This is one of our favorite rewards because it doesn’t cost your business anything. Reward your loyalty club members with early access for sales, sneak peeks, tickets, and more.
  • Donations and Charity – Many popular rewards programs now offer their members the option to make a monetary donation to a designated charity in place of their reward. This is a great way for your company and your members to show goodwill.
  • Experiences – Whether it’s an invite-only concert, extended hours at your store, or even a behind-the-scenes tour, think of experiences people will appreciate. Plus, experiences are often shared on social which helps drive new people back to your program.
  • Custom Rewards – Use your knowledge of your member’s purchase history and browser history to develop rewards specific to their likes and interests.

When it comes to getting your own customer loyalty program off the ground, it’s important to put together a robust strategy and decide how you will judge the success of your program.

Choose rewards that fit your industry, your business size, and – most importantly – your budget. Every customer loyalty program doesn’t need to offer the same reward options or value. The differences are what will make your program unique.

If you’d like to talk about launching or improving your own customer loyalty program, we’d love to make sure you have the right tools and a good foundation. Reach out to our team to set up some time to talk about how Upland Mobile Messaging can help you make more meaningful connections with your customers.

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