How to Choose a Customer Loyalty Program

By Margaret Link

There are so many different types of loyalty programs out there: from the ancient yet ubiquitous punch card, to the high-tech loyalty app (and everything in between). But with infinite variations on loyalty, how do you choose a customer loyalty program that best serves your brand? For the restaurant or retail operator who is looking to build a culture around customer loyalty, there’s no question more important.

Ask yourself the following questions to narrow down your company’s loyalty search and find a solution that both your customers and employees will love. 

1. What experience do I want customers to have?

When designing a loyalty program, customer experience should always be the priority — after all, a loyalty program with a poor user experience simply doesn’t get used.

However, most loyalty programs fall ridiculously short in this regard —that’s why most Americans are members of 26 loyalty programs, but only actively use about 10 of them. If you could choose two words to describe how customers see your program, the words should be synonyms of “effortless” and “delightful”.  Any type of program that introduces friction into the user experience ultimately drives customers away: Scanning an app, entering in a phone number, or having to remember an additional “loyalty card” is a recipe for failure. Anything that makes the customer do extra work will not survive long term (remember this: humans are lazy. Your customers are no exception).

2. How am I capturing customer data?
The next priority is collecting customer data that you can actually use. This is one of the main issues with the old-school punch card: your best customers would consistently fill up the punch card, but there would be no record of who they are. Without that information, how do you reach out to that customer if they stop coming in as frequently? Without customer information, there’s no way to identify your VIP customers, or to know when these high-value customers start “churning”. A loyalty program that collects customer transaction data (specifically, frequency and spend) can help brands reach out to existing customers with timely, relevant communication and drive more business.

Customer data can also help brands identify their VIP customers, which for most brands represent a significant portion of revenue (for restaurants, retailers, and car washes, typically 25% of your top customers make up almost 70% of revenue). Reaching out to VIPs and keeping them loyal is the most cost-effective way for brands to maintain their base of revenue.

3. How am I communicating with my customers?

Once you have customer data, that’s just the first half of the puzzle: to make it useful, you actually have to use it.

Customer data can be used to send highly relevant messaging to customers. When your customer loyalty program prioritizes delivering you actionable data, you can have access to information that makes it simple to run powerful communication campaigns (like bringing lapsed customers back in, or sending timely offers and messaging to VIPs).

Perhaps most importantly, customer data can also help brands better serve their VIP customers, which for most brands represent a significant portion of revenue (for restaurants, retailers, and car washes, typically 25% of your top customers make up almost 70% of revenue). Reaching out to VIPs and keeping them loyal is the most cost-effective way for brands to maintain their base of revenue. Without customer information, there’s no way to identify your VIP customers, or to know when these high-value customers start “churning”.

For example, customers who used to be loyal but are at risk of churning should automatically be receiving outreach to bring them back in (after all, it’s 7X more cost effective to drive an incremental visit from an existing customer than it is to bring a brand new customer in). Customer data makes it even easier to drive more business from your existing customer base.

In addition to transaction data, collecting customer feedback data is critical for brands who prioritize customer experience. Restaurants who use Thanx automatically ask for feedback each time a customer makes a purchase (as detected by the customer swiping their credit card), surveying the customer with Net Promoter Score (more info here) directly on their mobile phone. As a result, merchants using the Thanx platform receive more feedback than any other loyalty platform.

4. What’s the resource commitment to running this program?

So many loyalty programs make it hard for businesses to run them smoothly. From implementing additional hardware at the POS, to training staff on complex redemption methods, to manually pulling data and trying to interpret it… so many customer loyalty programs are simply too complicated to use effectively.

A great loyalty program is as elegant as it is simple. 

While effortlessness on the customer side is key to users signing up and staying engaged, effortlessness on the merchant side helps the program generate real measurable revenue.

To this end, Thanx doesn’t need POS integrations, clunky hardware, or require data scientists to crunch your numbers. Your merchant success manager walks you through how to use your dashboard, and then you’re off to the races with automated marketing programs, unparalleled business intelligence, and happy customers. Now THAT’s effortless.