7 Rules for Creating a Successful Loyalty Program

Loyalty programs are effective and profitable for businesses. Customers with loyalty-based relationships spend about 18% more than regular customers. (source: salesforce)

Loyalty programs are based on a simple principle: customers who spend more should get more. In Israel, many businesses have customer loyalty clubs, usually based on a cumulative benefit card, such as a free 10th coffee card or points accumulation on each purchase.

A loyalty program can be much broader, however. A brand that uses a loyalty program effectively and intelligently can increase the scope of its products and services, reduce sales costs through direct communication and familiarity with customers, and “recruit” new customers through branded customers.

An effective loyalty program should:

  1. Be Simple. If the loyalty program is too complicated, clients will simply not join. Programs must clearly communicate what the program offers them.For example, a regular discount on every purchase, unique and exclusive services, special sales days open only to club members or points accumulation as a basis for benefits.

  2. Create value: In the current marketing age, customer satisfaction is core, so the values and benefits of the brand must be leveraged from the customer’s perspective.For example, an EL AL customer who wants a premium flight experience is also looking for amenities that will make his vacation even more enjoyable. He will, therefore, search for a rewards program whose benefits extend beyond the flight itself (such as class upgrade, seat selection, car rental, hotels, discounts for shows and sports events abroad).

  3. Be rewarding: The loyalty program should provide the customer with benefits that continue to grow throughout the rewards period. For example, an incentive through the accumulation of points in each purchase. The points can be redeemed at all branches of the company and enjoy a variety of brand products. Aditionally, club members can enjoy club benefits and birthday benefits.

  4. Be properly managed.  A loyalty program starts with a clear definition of the plan’s goals, both at the strategic and operational levels. Once the goals have been set, a detailed plan must be drawn up to achieve it and the technological infrastructure created to operate and monitor the results on the ground. Advanced data collection and analytical tools are critical for successful ongoing management.

  5. Be responsive.  With the help of new technologies, you can quickly and easily create real-time campaigns that respond to brand-related events to further engage with the customer.For example, a movie theater special benefit for International Popcorn Day or special deals on a Japanese restaurant chain for the Tokyo Olympics.

  6. Get Personal. Customers want solutions and individualized content related to the brand. 48% of customers reported leaving a brand in favor of its competitors due to the lack of personal attention. It is important to segment existing and potential customers and tailor messages and benefits for each group.For example, a parenting program can offer various benefits, tips and professional articles based on the age of the baby.

  7. Multichannel. Nowadays, customers are on a variety of online platforms and channels. The brand needs to create a chain of encounters with its customers through email newsletters, text messages, campaigns and activities for club members on social networks (Facebook, Instagram), a blog open to all or only customers, and a hotline for providing information and answering professional questions.


In short, creating an effective loyalty program tailored to your clients’ needs is a significant component of retaining customers and increasing profits for your business.

Looking for an agency to help you set up and run a loyalty program? Contact us.

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