5 Ideas to Boost Your Loyalty Program’s Success

5 ideas for your loyalty program

Chris Barnett, a customer loyalty and engagement expert and vice president of Kobie Marketing, believes the key to a successful loyalty program is to make it a core part of the customer journey and branding experience. 

“Your loyalty program should be woven into the customer journey, from browsing to buying, online and in-store,” Barnett explained. “It’s not a side initiative; it’s the lens through which customers experience your brand. If the program isn’t visible and impactful at every touchpoint, you’re leaving engagement on the table.”

Building on these insights, here are five ideas for maximizing customer loyalty, generating more revenue, and creating a great customer experience with a loyalty program. 

1. Plan unique offers in exchange for loyalty reward points.

Build a loyalty program that allows members to exchange points for special offers. By making these offers exclusive, you’ll demonstrate that your loyalty program is worth joining. You’ll also encourage members to spend more so they gain additional points and qualify for more offers.

Be sure to link your loyalty program to holiday marketing whenever possible to boost engagement during this busy shopping season.

2. Give special rewards for loyalty program referrals.

Ask customers to spread the word about your membership program and persuade friends and family to join. Consider offering new members a discount on their first purchase to encourage them to spend more than they might have otherwise. 

Remember to reward the referring customer. Incentivizing referrals effectively builds brand advocacy by creating a feedback loop that spreads the word about your loyalty program.

3. Roll out a bonus-point campaign for your loyalty program.

Bonus points are an excellent tool for drumming up excitement about your loyalty program. Customers are usually eager to earn more points. Here are some tips for running a bonus-point campaign for your loyalty program:

• Focus on a product or service. Promote a particular product or service. When members buy the offering, they’ll earn more points.
• Reward purchases of multiple products. Give extra points to loyal customers who buy multiple products from your online or brick-and-mortar store.
• Promote your bonus-point campaign on social media. Use social media marketing to promote your bonus-point campaign and encourage people to visit your store or website. Additionally, highlight the bonus-point campaign on your website’s homepage and across product pages.
• Tell loyal customers about your bonus-point campaign. Let customers know about your bonus-point campaign, but don’t rely solely on opt-in email marketing to promote it. “Using email for a loyalty program can leave more than 80 percent of your customers in the dark because email read rates are just that low,” cautioned Barbara Casey, CEO of SMS marketing agency Mobile High 5. “So sending a reward out by email just isn’t that effective at driving customers back in the door.” Text message marketing can be a solid backup method.
• Target high-value customers with your bonus-point campaign. Aim your bonus-point campaign at a specific high-value customer segment.
• Use a bonus-point campaign to attract more loyalty program members. Offer extra bonus points to repeat customers who have yet to join your loyalty program. Include an invitation to the program so it’s easy to join.

4. Organize a prize drawing for your loyalty members.

Enter loyalty program members into a drawing that gives them a chance to win a significant prize to thank them for their loyalty. You can also include customers who have recently purchased from your store.

Prize drawings are an excellent way to create buzz around your business and boost brand awareness. You’ll cater to loyal customers while attracting new ones.

5. Openly favor your loyal customers.

Consider giving loyalty program members priority during sales. Let them take advantage of reduced prices and get the first pick of the stock. Promote your early-bird deal by emailing or texting loyal customers to let them know they’re at the front of the line.

Members will appreciate the gesture and enjoy being prioritized. This approach will help you win customers’ confidence and trust while encouraging others to join your loyalty program.

More tips for loyalty programs

Consider the following additional tips to boost your loyalty program’s effectiveness:

• Partner with another business. Create a strategic partnership with another business so loyalty program members get discounts at both venues. “Strategic partnerships with complementary brands can broaden the scope of your program and deliver value in ways that resonate with diverse customer needs,” Barnett said. “This isn’t just about adding rewards; it’s about strengthening the program’s relevance in their daily lives.”
• Join a broad loyalty card scheme. Consider joining a broad loyalty card program that involves multiple retailers. “While proprietary programs, like Starbucks Rewards, offer a great, brand-specific experience, merchant-funded programs take it a step further by allowing customers to earn with one brand and redeem with another,” explained Mark Jackson, managing director of product at loyalty and rewards program organizer Valuedynamx. “This kind of flexibility is what today’s consumers really want — research shows that 88 percent prefer loyalty programs that offer this kind of choice, and 75 percent value having multiple partners to choose from.”
• Incorporate omnichannel strategies. Casey recommended that retailers use a kiosk-based system so their loyalty program benefits customers whether they’re buying online or in person. “When a customer enters their number into that kiosk or makes a transaction through a POS [point-of-sale system] where it has been integrated, they are joining that loyalty program and opting in to that text program,” Casey explained. “Now that same customer can shop online, and if they earn a reward, they can just as easily walk into a physical store, and it will be waiting for them to redeem on that kiosk.”
• Create a social club for loyalty program members. Luxury brands often invite members and favored customers to social events in glamorous places to help them feel part of something special. You could arrange invites to such events once or twice a year. Alternatively, host after-hours get-togethers on your premises to launch a new product or service to members first. Ensure there’s plenty of food and drinks!
• Build an online community. Build an online community for loyalty program members that’s open 24/7. Customers can become acquainted and discuss common interests surrounding your brand. Use a forum, Discord channel or Facebook group to host your community. Ensure that your online community is invitation-only so members feel exclusive.
• Use POS tools to support your loyalty program. The best POS systems match customers’ contact details with their purchase history. Use this information to create a seamless experience for members in-store, on your website and on your app. Check out our review of Lightspeed to see how modern POS systems integrate loyalty tools into their platforms.
• Create a tiered membership approach. There are loyal customers — and then there are superloyal customers. These customers’ joint spending contributes to a significant portion of your annual revenue. Create your own “loyalty royalty” by offering these customers additional spending-related discounts.
• Promote your loyalty programs on savings sites. Consumers will often try to seek the best deal before purchasing. Sites like Savings.com (which is owned by business.com’s parent company) and DealNews.com are great places to promote your loyalty program and save money with it.
• Revise your loyalty program periodically. Your loyalty program should boost sales and customer loyalty. Revise your campaigns and program elements as needed to keep things fresh. “The best programs never stand still,” Barnett said. “Test, learn and adapt based on what’s working and what’s not. Programs need to grow with your customers, staying relevant as preferences and market conditions evolve.”
• Don’t overdo loyalty program discounts. Make sure your discounts and giveaways are offered in moderation so they don’t hurt your bottom line. 

Loyalty program best practices

To maximize the success of your loyalty program, consider these best practices.

Create experiences customers will love.

Today’s customers want to save money while feeling valued, making it essential to create exclusive experiences that resonate with them. Experts we consulted shared these valuable insights for creating a great customer experience through loyalty programs:

• Highlight exclusive offers that save customers money. Barnett noted that building exclusive experiences into loyalty programs is especially important during tough economic times. “Consumers aren’t just looking for deals; they’re looking for meaningful, rewarding connections with brands they trust,” Barnett said.
• Personalize your rewards and offerings. Jackson emphasized the importance of personal and relevant rewards. “Shoppers want to feel like they’re getting deals just for them, and those deals should be relevant to what they actually want,” Jackson said. “For example, Valuedynamx research shows that 59 percent of U.S. cardholders check for merchant offers linked to their cards before they shop. Providing one-of-a-kind, tailored offers based on data can increase engagement and give brands deeper insights into customer behavior.”
• Offer insider experiences. Joseph Yetter, general manager of engagement cloud at PAR, which runs restaurant loyalty programs, recommended rewarding loyalty with exclusive, insider experiences. “A good strategy is to offer ‘insider’ experiences, such as exclusive product previews, members-only events or VIP tiers,” Yetter suggested. “Restaurants can also engage directly with loyalty members to enlist their feedback and get their help to co-create limited-time offers, further enhancing community cooperation.” Yetter noted that insider experiences help customers feel valued and foster deeper loyalty. 

Monitor your loyalty program data.

The success of a loyalty program depends on its integration with your POS system and e-commerce platforms and on effectively using the generated data to refine the program. Barnett recommended combining transactional, behavioral and emotional data to gain a comprehensive view of your customers. 

“This data enables you to personalize rewards, offers and communications based on customer preferences and engagement patterns,” Barnett said.

Barnett also suggested tracking your return on data by comparing the value generated from data-driven initiatives with the cost of collecting and processing the data. 

“This approach helps identify which strategies are driving the most value, allowing you to refine your loyalty offerings and enhance both customer satisfaction and program profitability,” Barnett noted. “By continuously optimizing based on insights, brands can ensure their loyalty programs remain relevant and impactful.”Jackson highlighted the importance of personalizing offers based on the data your loyalty program collects. “By using data to understand customer preferences and behavior, brands can create personalized offers that resonate with the right audience,” Jackson said. “Personalization should be [tailored] to an individual shopper versus to a certain type of shopper. This targeted approach increases engagement and ensures rewards feel relevant to customers.”

Measure the success of your loyalty program.

Greg Zakowicz, a senior e-commerce expert at marketing platform Omnisend, emphasized the importance of ensuring your loyalty program remains sustainable and profitable.

“Make sure that rewards don’t eat into your profits,” Zakowicz cautioned. “Options like early access to sales, new products, exclusive content or previews cost little but still make customers feel appreciated. Another good approach is offering rewards tied to social impact, such as charitable donations made in a customer’s name, which create meaningful value while keeping costs manageable.”

Yetter recommended focusing on both short-term engagement and long-term retention to measure success. 

“Tracking customer churn rates and reactivation rates can also provide insight into how effectively the program retains members,” Yetter explained. “For example, running bonus-point campaigns — like double points during slow periods — and analyzing the resulting uplift in sales and visit frequency can provide clear metrics to measure program success.”

Zakowicz stressed that a loyalty program’s success isn’t just about the financial returns. “While it can be difficult to measure, a good starting point could be metrics like engagement frequency, community contributions and share-of-wallet growth,” Zakowicz said.

The benefits of offering loyalty programs

Successful loyalty programs increase customer retention and help you earn repeat business. They also provide the following benefits:

• Loyalty programs boost revenue. Happy customers who receive discounts return often and spend more. Plus, if you charge customers to join your scheme, they may buy even more because of the sunk cost fallacy.
• Loyalty programs are inexpensive to market. Sending out special offers via email and text message marketing to shift inventory is far cheaper than using online or print advertising to attract new customers.
• Loyalty programs provide valuable data. If your POS system captures data on who’s buying what from you, you can segment your customer database and run targeted promotions.
• Loyalty programs keep customers loyal. It may seem obvious, but the benefits of loyal customers are immense. Loyal customers are more likely to stick with you throughout price increases and times of economic downturn.