Successful loyalty programs drive desired customer behaviors, keep people engaged, and generate high ROI. Underperforming programs suffer from poor economics, lack of customer insights, and low engagement. Six techniques can help improve underperforming programs: 1) Create accurate customer profiles, 2) Know what your customers value, 3) Come up with a compelling hook, 4) Start a game, 5) Build a community, and 6) Consider an ecosystem with partners.
High-performing customer loyalty programs, while complex to operate, have proven to be worth the effort. Several airline loyalty programs have been successful. Higher rating than the underlying airlineIn a recent Bain & Company survey of nearly 870 U.S. consumers, 63% of respondents said they make purchasing decisions based on the loyalty program they participate in. And because very small businesses are in many ways similar to consumers, loyalty programs, such as AB InBev’s program for small and mid-sized food and beverage retailers, are beginning to spread in the business-to-business market.
