5 Aspects of a Good Loyalty Program Strategy
Updated: Dec 14, 2023
It was Navratri time of the year 2007 and the Durga Puja committee of Air Force Station, Bidar, Karnataka had organised an orchestra evening.
As I was the first in my family to get ready, my mother had asked me to go to the auditorium and save a seat for everyone else.
Happily, I was about to go sit on one of the finest looking chairs in the front row and that’s when I heard a guard’s voice from behind.
“No kid, you can’t sit there. It’s a reserved spot” and I went like -
I felt annoyed at the notion of not having access to such privilege. It’s like the Disney princess inside me felt as if she was denied her throne and turned to the Sultan.
Meaning, her father. So when my dad arrived at the function later that evening, I asked him.
“What’s so special about those reserved seats? Why can’t we sit there?” to which my father replied, “Those seats are reserved for officers who’ve worked hard to earn rankings”.
This was the first time I was introduced to the concept of being a part of something that is elite but understood its importance later through various life experiences.
Loyalty Programs and Me
Seeing the potential exclusivity held really got me excited. But the first time I felt how good it was to be part of it was while shopping at H&M.
The H&M Loyalty Program literally took me by surprise when the guy at the billing counter mentioned a birthday discount that my friend had earned.
This moment was the beginning of a beautiful relationship.
A relationship between me and some brands that I’d cherish deeply all because of their amazingly crafted loyalty programs.
Saw It. Wanted It. Got It.
In September 2020, I reinstalled the Zivame app upon mention of sale from a friend and found out about its tiered loyalty program out of curiosity.
Yes, I checked that under the ‘My Loyalty’ section, I was ₹32 away from moving to Silver Circle of Radiance from that of Bronze.
I saw the benefits that their Silver circle held such as special check out and brand offers, wanted them and got them by making a purchase.
Why Was I Drawn to Brands’ Loyalty?
If you take a closer look at my experience with benefits of exclusivity, you’d see an exponential growth.
It started with
The idea of wanting to join something elite as a child
Moved to witnessing a loyalty benefit through a friend
Shifted to me joining a loyalty program myself
As this journey continues with many more brands winning my loyalty as a customer, let’s talk about how it happened in the first place.
For starters, it’s clear that the loyalty benefits surely got my attention but turns out, there’s more.
In fact, I dug further in and found out that there’s a whole loyalty program strategy that goes into attracting customers.
Upon learning more, I figured that a well-thought loyalty program revolves around 5 aspects and I’d like to share it with you in order to help you design and brand your loyalty program.
Let’s jump right in!
5 Aspects of a Good Loyalty Program Strategy
1. Give Your Loyalty Program an Identity The first and foremost aspect is to decide how your loyalty program will be perceived which comprises elements such as Name and Logo. Amazon Prime, Sephora Beauty Insider, Myntra Insider, My Starbucks Rewards have loyalty program names that reflect their brand.
Their names sets tone for potential customers, motivates them with a join-to-claim surprise factor, are simple and easy-to-remember.
2. Work Your Loyalty Rewards Out Devise what reward or benefits you will offer your customers upon joining your loyalty program. This decision should also be accompanied by what action a customer should take in order to claim loyalty rewards along with reward currency. Sephora, a personal care and beauty products brand counts more than 25 million loyalty program members.
They let customers earn Beauty Insider Points for merchandise purchases and redeem those points for rewards.
Similarly, Starbucks reward currency is called ‘Stars’.
3. Formulate Your Loyalty Program Type Point based, Cashback, Tiered, Premium are some of the most common types of loyalty programs. As a brand, you can choose a type that’s right for you. Since we just spoke about it, let me give the Starbucks loyalty program example. It’s a point-based one which reflects a ‘Transactions first, Benefits later’ mechanism. This means it’s open to all, free to join and may not attract valued customers. Myntra Insider follows a similar approach but has a tiered loyalty program type. Based on purchase, customers can level up to different tiers, each having its own benefits.
This adds a milestone gamification element which increases customer motivation and engagement.
Amazon Prime, on the other hand, is a premium loyalty program wherein customers enjoy daily, experiential benefits of 1-day free shipping, early sale access, unlimited video streaming and more, for an upfront fee of $119.
4. Add a Feel to Your Loyalty Program Like I mentioned above, your loyalty program should be an extension of your brand.
Ensure that while building it, you offer a customer experience that speaks for your brand.
This involves choosing colours, icons, badges, leaderboard, rewards page etc that represent your brand theme.
5. Put Your Loyalty Program Out There Once you’ve your loyalty program in place, the final step is to communicate it to your customers, both new and existing. This can be done either by sending notifications, emails or even putting a detailed loyalty program page on
How it works
Eligibility
Rewards offered
How to redeem
Terms and conditions
Take a look at Madewell, a clothing brand's loyalty program email that I really liked.
It’s clear that the secret behind a good loyalty program strategy is these 5 elements working together and you know what can get this going? A loyalty rewards solution! Imagine all of your aspects working together where you’ve a loyalty program where user action, rewards and rewards currency, brand theme, its type, communication and analysis is already taken care of?
Flyy is a loyalty rewards system that not only enables you to put a comprehensive loyalty program in place but also enhances them with gamification such as scratch cards, badges and more.
Want to explore further? Book a demo today.
