The 5 Pillars of the Most Successful Loyalty Programs

Whether you’re considering creating a loyalty program for your business or you’ve already realised it’s a great idea and you want to make sure it gets off to a winning start, you’ve come to the right place - Stamp Me are the leading provider of digital rewards and loyalty programs. So, what makes a good loyalty program? And what do all of the most successful loyalty programs have in common?

At Stamp Me Loyalty Solutions, we’re well-versed in brand loyalty and customer retention. We’ve put together this helpful guide outlining the five crucial aspects of any successful loyalty program, so that brands can entice customers from day one, and keep them engaged for the long term. Without further ado, here are the five most important pillars of the most successful loyalty programs in 2023:

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5 Pillars of the Most Successful Loyalty Programs in 2023

1.     Simplicity

When it comes to loyalty programs, the simpler the better! If customers find your loyalty program complicated, confusing or difficult to use, they will abandon it just as quickly as they signed up. All of the most successful loyalty programs ensure that their strategy is simple, easy to use, and accessible.

Every aspect of your loyalty program should be simple – from the layout of the app, to the points accumulation and rewards redemption process, and even the terms and conditions.

By this we mean, no confusing fine print – offers are only applicable for certain products, points can’t be redeemed between X and Y because of Z, and so on. Be very clear and straightforward about your loyalty program: if you do X, you’ll get Y. Simple as that.

Don’t keep customers anxiously waiting for the points they’ve just earned from their latest purchase to appear in their app – show them immediate results for their loyalty.

If a customer can sign up to your loyalty program in less than a minute, accrue points and redeem rewards in real-time at POS, and easily navigate their way around the app with no trouble, then you’re off to a good start!

At Stamp Me, we’ve found the following to be a useful checklist when designing your loyalty program:

• Is your digital loyalty app easy to use?
• Is the program itself easy to understand?
• Are the benefits of the program clear?
• Are the rewards easy to claim?

The benefit of using Stamp Me Loyalty Solutions is that we’ve taken care of these four points for you. The app is extremely straightforward, and the way in which customers collect stamps on their device at POS is quick and fool-proof.

Our loyalty program system is essentially a digital version of the old “Buy 6 X & Get Your 7th Free” paper punchcards, so most people are already familiar with the concept when they download the app.

Rewards are immediately available to the customer through the app upon collecting their last stamp, at which point the app automatically resets… simple!

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2.     Value

The core concept behind loyalty programs is to offer customers better value from a business the more that they engage with it. If you treat your rewards program as a magic machine that’s constantly working for you to reel customers in and empty their wallets, it will fail.

According to Kitewheel,  73% of consumers see loyalty programs as a way for brands to show loyalty to their customers, while 66% of marketers perceive loyalty programs to be a way for customers to show their loyalty to a brand… do you see the confusion here?

Ideally, a loyalty program benefits the customer and the brand equally, but the brands that focus on delivering value to their customers rather than themselves always achieve greater success.

Figure out who your customers are, and what they want. Only once you’ve answered these questions you can then design a successful loyalty program that appeals to their specific needs.

Here’s a useful “value checklist” we’ve compiled to help you ensure your loyalty program is enticing and attractive to customers right from the get-go:

• Are the rewards relevant to your customers?

“Enjoy a free wax and facial with every sixth haircut” isn’t necessarily going to appeal to your male customers, for example. Even if the vast majority of your customers are female, why alienate a small portion of them?

• Does the reward match the effort required to achieve it?

“Spend $100 and get a free coffee with your next order” is not an enticing reward, and many regular customers would probably find this insulting, as the return on investment is so small.

• Do customers receive instant gratification for participating?

At Stamp Me, we’ve found that consumers are three times more likely to join a loyalty program right there on the spot if they see an immediate reward for their participation (i.e. “Sign up now and receive a 20% discount on today’s purchase”) - this is something that all of our most successful loyalty programs have in common.

Another approach to ensuring your loyalty program is enticing enough for your customers is to put yourself in their shoes and ask the simple question, “What’s in it for me?”

3.     Engagement

Remember when we mentioned that loyalty programs are a means for customers to enjoy better value from your business the more they engage with it? Well, the key word here is “engage”, not “spend”.

A good loyalty program doesn’t revolve around transactions; it’s about strengthening the relationship between your brand and your customers. Digital loyalty apps are an indispensable tool for offering each individual customer a truly unique, personalised experience and encouraging an emotional connection with your brand.

Here are four excellent tools for increased engagement that any loyalty program worth its weight in gold will incorporate:

• A welcome email

which addresses your newest loyalty program member by their first name, thanks them for their registration and offers some quick details on how the program works and what benefits they can enjoy.

• Birthday Club

is a very easily-implemented extra perk, whereby loyalty program members enjoy a free product or service on their birthday. Just by asking for a customer’s full name and date of birth, these first two points are already remarkably simple to incorporate into your program.

• Spontaneous rewards

surprise and delight customers, while keeping your brand front of mind in the most positive way possible.

These don’t have to be huge offers of kindness that threaten to bankrupt your company; just small gestures like a discounted accessory or side-product, an unexpected upgrade, or perhaps free shipping can make a long-lasting impression on a customer.

You can drop these “random” offers into your loyalty program at the design stage, but not make these incremental rewards known to customers so that when a customer unsuspectingly achieves this reward, it appears to be a spontaneous offer or token of gratitude for their loyalty.

• Personalisation

is the key to a truly unique customer experience, whether you have a loyal customer base of a hundred, a thousand, or a million.

With a digital loyalty app that customers download and use to accumulate points and redeem rewards, every purchase a customer makes is recorded, and the data is linked to each specific customer.

This means that with every purchase, you get a better idea of what products that customer likes, what days they tend to make purchases, what time of day they tend to visit the store or browse your products online, how much they typically spend per transaction, and various other invaluable data points.

Invaluable, why? Because when used correctly, brands can send automated push notifications, texts and emails with tailored rewards and exclusive offers to each individual customer.

This is handy, considering that, according to 99firms, push notifications drive nearly 10 times more users to make a purchase!

4. Staff Engagement

What makes a good loyalty program? A team that believes in and knows how to implement it! Before you can educate your customers on the benefits of your loyalty program, how it works, why they should join and so on, you first need to educate your employees.

Your members of staff are the face of your business – the more knowledge they have about the loyalty program, the easier they’ll find it to on-board customers (especially if your program offers immediate rewards as an upfront signup incentive).

If your employees don’t see the value of the program, they’ll have a hard time promoting it (or a lack of interest in doing so). Take the time to walk your staff through the entire signup process, how stamps are collected, what the rewards are, and all the other details.

Visit an established brand with a highly successful loyalty program like Starbucks or Domino’s, and take note of how the cashiers prompt every customer to join the loyalty program, highlighting the various perks and mentioning how quick and easy it is to sign up.

Train your employees to use the same strategies, and motivate them with staff incentives and internal rewards for the most signups, and so on.

5. Promotion

As with any other marketing strategy or technique for boosting sales and increasing customer retention, promotion is essential.

We’re not talking about TV and radio ads, billboards and bus benches – although if you’ve got the budget for these forms of advertising, go for it!

Simple in-store promotions and prompting from staff (as mentioned above) is enough to get the ball rolling on a newly created loyalty program. Post regular promotional material on your brand’s website and social media pages, especially when you’re running side-promotions or limited time offers.

One of Stamp Me’s clients is Kinjo Sushi & Grill, a Canadian chain with six restaurants. Kinjo has enjoyed remarkable success with its loyalty program, due to diligent promotion. Every Kinjo’s has signage in the windows, on the tables, at POS and even in the restrooms – all promoting the loyalty program.

And of course, there’s another incredibly effective form of promotion. It’s not the kind you pay for, and yet it does a much better job of convincing people than any form of traditional advertising – word-of-mouth referrals.

According to Nielsen,  92% of consumers trusting peer reviews over traditional advertising these days, which means that brand advocacy is crucial. Look after your existing customers with the things you’ve learned here like relevant offers, Birthday Club and other spontaneous rewards, and they will quickly become brand advocates.

…The takeaway here is that a well-designed loyalty program will promote itself!

While there’s no limit to how creative you can get with your brand loyalty and customer retention strategies, Stamp Me has found that businesses which build their loyalty programs around these five pillars get off to a flying start and tend to see immediate results upon launching their program.

For more tips and tricks on how to improve your loyalty program and keep up with the latest trends in customer loyalty, check out our blog.