Customer experience is key when developing a loyalty programme

19 February 2020

Converting casual shoppers into loyal, repeat customers is the holy grail of business success. Of course, it’s much easier said than done. So what can businesses do to achieve this?

Loyalty programmes are increasingly seen as the magic solution to drive repeat purchases. But is it the right strategy for your business? 

Understanding your customers - and, in turn, the best way to engage them - is crucial in developing a loyalty programme. If you’re already delivering excellent customer experience, you’ll likely have a strong grasp on what makes your customers tick. A loyalty programme is, therefore, a smart addition to lock in more lifelong customers. 

Here’s what you need to know.


Getting to know your customers better

There’s so much more to loyalty programmes than simply rewarding your customers for their repeat business. All that information you’re collecting from your customers - from the details they provide at sign up, through to their shopping habits - is pure, raw data called transactional data. 

When you connect this data to customer feedback, you’ll gain a deeper understanding of how they felt about a specific transaction, how this might compare to others of a similar demographic and gain a clearer insight into your customers’ overall experience and how you can best serve them.

How your transactional feedback can grow your business:

  • Feedback gained immediately after customer interactions allows you to continuously tweak your business to meet their needs. Minor issues can be resolved quickly and save a disgruntled customer from taking their business elsewhere.

  • This valuable and thorough data can be mined for insights to form the basis of marketing campaigns that will truly resonate with your customers.

  • Tracking fluctuations in customers’ perspectives will provide insight into the impact of business changes. For example, how have they reacted to a new marketing campaign or recent price adjustments? 

  • A continual (yet manageable) stream of customer feedback will drive a customer-centric culture. With this at the centre of your business, employees will have a deep understanding of areas that need improvement and successes can easily be celebrated.

  • Positive customer feedback can be leveraged through linking to online reviews (e.g. Google) or within marketing communications.


Invest in your customers to keep them coming back for more

As the old saying goes, “you only get out what you put in”. This rings true from a customer experience perspective, particularly when it comes to formulating loyalty programmes. With so many elements to consider, how do you create a programme that customers will actively participate in?


These five tips will keep you focussed on what really counts:

  1. Money talks: A study by MIT Sloan Management Review found that cash remains king - with monetary rewards topping the list of most desirable loyalty programme features.

  2. Surprise and delight:  People love feeling special. Whether it’s a birthday treat or a thank you for a recommendation, the unexpected doesn’t need to break the bank and can really get your customers talking.

  3. Keep it simple: Despite having a membership, not many people actively participate in loyalty programmes. Creating a programme that’s easy to use and keep track of will encourage people to sign up and stay engaged.

  4. Get personal:  Loyalty emails have an average click-through of 35%, making them a powerful marketing opportunity. Sending your customers personalised communications will help your business stay top of mind and will remind them of rewards available to them now and in the future.

  5. Don’t overlook instant gratification: In an age of ‘I want it now’, providing customers with smaller ‘instant’ rewards boosts customer satisfaction and can increase basket size.


Happy customers spend more

Using transactional data to get to know your customers and their preferences allows your business to cater specifically to them which can have a huge impact on both loyalty and revenue. According to Forbes, 40% of consumers have spent more than they intended because of personalised service, and another 44% of consumers say they’ll likely repeat purchase after a personalised shopping experience. 

Personalisation has moved from something customers desire to something they expect. It delivers on the much-loved convenience factor for shoppers and enables businesses to upsell and cross-promote based on a solid understanding of their customers.

In a world where competition is fierce and the majority of shopping is initiated on Google, building a strong relationship with your customers is key. By truly getting to know them and rewarding them along the way, they simply won’t want to go anywhere else.


Is your business truly customer-centric? Request a demo with Customer Radar to find out.

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