The Battlefield of Excellence: Making Loyalty Programs Work

Usability. Visibility. Continuity. Loyalty programs are a powerful tool, but to make the most out of yours, there are some principles you simply can’t forgo

Erez Romas
June 19 2017

To-date, the sphere of loyalty programs is massively lucrative, but also incredibly saturated, and program operators need to constantly work towards encouraging customers to use their programs long-term. Roughly 60% of registered loyalty members in the U.S. are inactive, which provides us with a pretty good idea of the battlefield where the war over the customer’s long-term attention and proactivity is raging.

So what are the most important aspects when creating/revamping a loyalty program? Thousands of businesses create loyalty programs, but the core remains identical across all verticals. There are three main values you must keep in mind when creating your program:

  1. Usability
  2. Visibility
  3. Continuity

Usability Above All

If you live in a free market, you’ve likely received an offer to sign up for a loyalty program at least once in the past month. Now try and remember the terms and conditions: were they quick to understand, or did they sound like a college lecture? You might have encountered both cases.

Loyalty programs are usually divided into three parts:

  1. The sign-up process
  2. The accumulation of awards (points, stamps or money)
  3. The redemption of the awards into goods

You must make each separate step simple, clear and motivating enough so the client can quickly decide whether he or she is interested in joining the program.

And since every good idea can find itself buried under a frustrating pile of procedures, give the process, rather than the essence, 60% of your focus. It is important to create a variety of rewards and means to achieve them, but make sure you stick to the principle of threes: no more than three award types and no more than three steps to achieving and/or redeeming them. Moreover, Make sure the goals you set are achievable – it’s better to work less for a lower value award than to work really hard for the holy grail.

Additionally, even though it’s usually a one-time sort of step, the sign up must feel easy and effortless. Even before going into the design/UX/UI aspects, make sure you’re offering a simple and traction-free registration process requiring only the minimal details for participation in your program. Should you want or need more details in the future, you can collect them at a later stage.

Visibility: The Driver of Usability

The look and feel of your loyalty program must complement the functional usability. Here’s a general principal to apply: the message is the driver, visual design is the car. This means that if you invested in a coherent and attractive loyalty program (a talented driver), you must make sure it gets the right visual design elements that will enhance the program (provide the driver with a reliable, fast, and – yes – a dazzling car).

Let’s break this down:

  1. You want a simple concept and message for your loyalty program – make sure the design conveys that message as well. A streamlined design uses a limited number of colors (preferably monochromatic and not complementary), clean and consistent lines, strict alignment methodology, and if possible – a moderately airy layout. Cram your page with unaligned submission fields in variable colors and you’ll see your prospective signers run away from you screaming.
  2. Maintain cohesion in your design – create a language of colors, icons, typography, images etc., and use it throughout the entire interaction with the customer – before, during and after they sign up to your program. Since clients use so many loyalty programs in parallel, they must know instantly – instinctively even – exactly who they’re interacting with and why.
  3. Create a distinction – you need to distinguish yourself from your competitors’ loyalty programs. What better way to do so than by using design? Research what your peers did and then strategize how you can take a different approach. Develop a unique set of icons, a distinct and dominant color, an original font. And then, deploy them throughout your entire loyalty program’s assets/or materials.
  4. Process-enhancing design: When the user completes the signup form, let the visual language guide him/her. Divide the different fields into separate sections by using extremely readable typography and color choice (yellow on light blue is a fine logo scheme, but the combination isn’t ideal for text), and by clearly marking sections that require filling in details or contain important information.

If your loyalty program is already up and running, ensure that it adheres to these guidelines. Or better yet, have a colleague or a close friend go over your design – fresh eyes are always more objective.

Now that we’ve covered the importance of the usability of your loyalty program, it’s time to move to the last part: Its continuous simplicity.

Continuity: Making Them Stay

As its name insinuates, loyalty programs are about the long term. Remember this very important rule: if your program only benefits you, the provider, you will lose your client and fast. If customers sign up for your program in exchange of a cool gift, but routinely receive emails reminding them to “stop at your shop” so to speak, you might find yourself with a massive client list that is basically useless. Balance is the aim and this is how to achieve it:

  1. Achievable goals – but not too much: make sure you set the goals in an increasing range of difficulty that is ALWAYS achievable. You want users to instantly feel rewarded by your program, but you don’t want them to lose interest once they become experts.
  2. Be personal: birthdays, wedding anniversaries, child births – try collecting data from your users that you can later transform into personalized loyalty awards. When done correctly and tastefully, clients love the personal touch.
  3. Encourage engagement: as Voltaire said, you need to cultivate your garden. Don’t assume that your amazing program in and of itself will keep your clients engaged. Stay in touch with them with periodical special offer emails. Create a “We’ve missed you” email procedure for engaging churned customers. Utilize feedback to learn how your customers are doing and what you can do for them.
  4. Collect, analyze, act: one of the most important principles has to do with the backend of your loyalty program: install a smart BI system in your loyalty program’s back-office and constantly monitor your users’ behavior patterns. Today there are many solutions you can embed in your systems that will perform the work for you. Remember, your program can be lucrative, look amazing and even garner a load of active satisfied users. But you need to constantly analyze and tweak your program to identify and reel in those left behind, as well as recognize potential weak spots before they erupt into a worrisome trend.

Look at your current loyalty program through the prism of this article – does it tick all the boxes? For a more in depth analysis of loyalty programs, check out the next part of this series where we’ll examine several existing loyalty programs and decipher what they’re doing right and how they should improve.


Erez Romas

For the last ten years, Erez has seen the financial media industry from almost every angle. He has worked as a correspondent and editor of foreign affairs in Israel's leading financial daily newspaper, Calcalist, later assuming the role of the paper's news desk's head. He left Calcalist to become Editor-in-chief of Finance Magnates, a global leader in news, research and events in the field of currency markets, later becoming COO. He is proficient in four languages, an avid swimmer and a swimming instructor for adults and children.

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