Loyalty schemes have become commonplace. These days, most cafés, retail chains and well-known brands run them, offering to the participants mobile apps or cards for collecting stamps or stickers. Campaigns of this kind are so popular because they are exceptionally effective at boosting customer loyalty. What’s more, they can be organised regardless of the scale of the business. To create When developing a proprietary programme, an action plan should be drawn up that will maximise business benefits.
A good loyalty scheme. What is a loyalty scheme?
The American economist Philip Kotler classifies loyalty schemes as promotional tools used to support the sales process. According to his definition, this initiative involves rewarding consumers with various bonuses once they have met certain conditions, usually relating to the value or frequency of their purchases. Nowadays, other practices or consumer behaviours are also valued, such as recommending a brand or product to a friend or completing a survey.
Good ployalty scheme aims to build a lasting, ongoing relationship with customers, in other words, to effectively encourage them their for future purchases. This way, you can build up a group the faithful recipients who If handled correctly, they will generate a steady income. Offers of this kind are often confused with limited-time promotions, such as discounts after a certain time or discounts offered on a specific day of the week. These measures raise Sales are only a temporary measure, whilst the loyalty scheme is designed to boost customer engagement in the longer term.
Where do we start when setting up a loyalty scheme?
If you want to organise a good, effective loyalty scheme, it is best to start by drawing up a detailed action plan. The most important issues to focus on include:
Aim of the programme
In the first stage, it is essential to determine what you wish to achieve through the programme. Business owners prioritise different aspects, but the most common objectives usually include: increasing sales, attracting new customers and improving brand image. Another common reason for organising such programmes is the need to collect valuable data on consumer behaviour. Different approaches are needed to achieve each of these objectives. That is why it is so important to know right from the start what you are aiming for. This will save a great deal of time by ruling out ineffective solutions.
According to many specialists involved in organising loyalty schemes, profits should not be treated as a priority. A well-planned campaign provides a better understanding of customers’ needs, enabling appropriate changes to be made to the offering. This information is far more valuable, as it can be used to it's possible better in future create and run other advertising campaigns in such a way that they generate greater business benefits. Campaigns that meet the needs and expectations of the audience are simply more effective.
Breaking down major objectives into smaller ones, which are much easier to achieve, makes it easier to implement the programme and assess its effectiveness. To this end, one can use a classification based on duration, e.g. short-terme – increasing the number of participants and, in the long term, gaining loyal, regular customers. Similarly, more complex issues can also be broken down into, for example, non-quantifiable objectives – such as improving the brand’s image – and quantifiable ones – such as increasing the average basket value. The most important thing is that these objectives are specific and easy to verify.
Target group
When designing a loyalty scheme, the target audience is of paramount importance. It usually coincides with the customers of the products or services in question, but in some cases one of the objectives is to attract customers from other segments. For example:
It is also worth decide whether the activities should be aimed at a wider audience or a specific group of customers. This is important from a budgetary perspective – smaller-scale activities are usually less expensive. In both cases, it is necessary to adapt accordingly plan activities and methods of communication with customers.
Format of the programme
This is one of the most important issues. A programme will not be effective if its terms and conditions are inaccessible to the customer. Initiatives of this kind take various forms depending on the sector, business model or target group. All of this is of great importance, as it should influence the choice of reward mechanism and the rewards themselves.
1. Points
Currently, the most popular loyalty schemes are those based on a points system. Under this system, customers receive points for specific activities. This type of scheme is most commonly used by restaurants and cafés, which reward customers who visit them regularly. Petrol stations and online auction sites, for example, also offer the opportunity to collect points.
If a loyalty scheme is to effectively encourage customers, it must offer a realistic chance of winning attractive rewards. Excessively high thresholds for receiving rewards or complicated rules discourage participants. When a customer feels that they will not be able to reach a certain threshold, they will lose the motivation to bites participation in the entire campaign. The duration of the campaign – that is, the period during which points are collected – is also important. It is best to carry out simulations to check whether a potential participant can actually collect the maximum number of points within a given time frame and how often they would need to use the services in order to that achieve.
Once both these aspects have been taken care of, the programme will effectively encourage the audience to participate actively. This format offers however the best results in sectors characterised by high purchase frequency and relatively low transaction values.
2. Membership
A loyalty scheme makes use of a specific psychological mechanism whereby people seek to maximise their benefits when carrying out certain actions. An increasingly popular approach is so charging fees for the opportunity to gain „premium” status, which grants exclusive access to attractive offers and discounts. Examples of such programmes include Allegro Smart and Amazon Prime. As part of a paid membership, these services guarantee free delivery and faster access to the best promotions. With Amazon Prime, customers also gain access to a streaming platform featuring popular TV series and films. These additional benefits effectively encourage members to shop more frequently and spend larger amounts. The subscription fee motivates them to make the most of the service, so that it would be the most cost-effective in their eyes.
3. Transaction size
Another popular type of loyalty scheme is one in which customers are rewarded for achievement a certain amount spent. In most cases, they then receive a voucher for their next purchase or a discount. Solutions of this kind are usually used by furniture shops or homeware stores, as it is relatively easy to spend larger amounts, and the varied range of products means there are many ways to use the voucher you receive. This model works very well also in the case of companies offering related products, e.g. coffee machinesy coffee and compatible capsules, or bicycles and cycling accessories. A customer who receives a voucher or discount card, He’ll probably pop back into the shop to pick up some useful accessories.
However, it is important to realise that loyalty schemes will not work equally well in all sectors. They are unlikely to be effective in areas of retail where shopping carried out są very rarely, i.e. once every few years. Campaigns of this kind are not used, for example, in car showrooms or construction companies. If you have any doubts as to whether the programme will be effective, you should think carefully before implementing it.
What else is worth bearing in mind when setting up a loyalty scheme?
Before setting about designing and organising the programme, it is essential to focus first and foremost on customers’ expectations. It is very important to draw up simple, clear terms and conditions of participation. These must include all the key information regarding the rules of participation, as well as, amongst other things, the duration of the campaign, prohibited practices and the method of awarding prizes. Less complicated formalities always mean a better chance of attracting a larger number of interested participants.
The ease of access to the programme is also extremely important. These days, the most popular options are mobile apps, which allow users to check their points balance at any time and also mean they don’t have to carry an extra card with them. Unfortunately, for small and medium-sized businesses, the costs of developing a suitable app may be too high. In such a situation, however, you could opt for an additional tab on the shop’s or company’s website. You need to also Of course, we must bear in mind older consumers, if they too form part of target group. As they may have trouble with operation of a modern technologiesi, it might be worth adding analogue options, for example in the form of a card. If this is possible, the most sensible approach make use of all the options to meet the needs of different audiences.
It is not possible to also forget about promoting the campaign. Even the most interesting, best-structured programme is doomed to failure if nobody to otherwise they won’t find out about it. Effective communication with customers has a significant impact on the success of the entire project. The audience must be informed about the programme in an engaging way. The method of communication will vary depending on the target group and the available budget. Among the most popular methods are: leaflets, billboards, advertising stands, newsletters, social media posts, website adverts and TV/radio adverts.
Analysis of the programme’s effectiveness
The programme’s effectiveness can only be assessed if its results and the objectives achieved are monitored on an ongoing basis. This makes it possible to keep a close eye not only on profits or losses, but also to ascertainć to determine which actions are effective and which are less so. Such observations allow valuable conclusions to be drawn. In future, the same mistakes will not be repeated, which will further increase the chances of success. Furthermore, the data collected on participants and the statistics help to improve the quality of services by tailoring them to customers’ actual expectations and needs.
Summary
Good pLoyalty programmey It can certainly work very well even in a small or medium-sized enterprise, which is why it is worth considering organising one. Like any marketing campaign, it must be properly prepared following a thorough analysis of the target audience. Choosing the right form of participation is also very important. If you want to achieve the best possible results and minimise the risk of failure, you need to plan the entire campaign carefully and measure its effectiveness on an ongoing basis. This way, you’ll have the best chance of ensuring that customers are satisfied – will start make larger purchases more often and develop a positive attitude towards the brand.
