The average consumer is part of 14 loyalty programs. But really only engages with a maximum of seven.

So how do you create customer loyalty programs that add value for customers and make them loyal to your brand?

Read on for the ultimate tips for the best loyalty programs.

Business owner mingling with customers

Understand the Goals of Loyalty Programs

The number one goal of consumer loyalty programs is to retain customers. It costs a business much more to acquire a new customer than it is to keep one.

Offering freebies, discounts and other rewards is a small price to pay to have a large base of loyal, happy customers.

Another goal of loyalty programs is to collect data. This secondary goal gives you much-needed insight that you can use to target your marketing programs for maximum impact.

Understand Why Customers Join Loyalty Programs

Now, step into the customers’ shoes. Why do they sign up for customer loyalty cards?

First and foremost, customers want free stuff and discounts. Active users enjoy maximizing the rewards they can get.

Also, customers like to feel like part of the in-crowd by being members. They can feel important and valued from a well-structured loyalty program.

So how can you structure your consumer loyalty program to work for you and your customers?

Keep the Points Simple

The best loyalty programs have a simple point structure. Don’t make it confusing for your customers.

Make the math simple. For example, you earn 10 points for every dollar spent and 1000 point equals $10 off. Of course, you don’t have to create a point-based system. But if you do, keep the conversions intuitive.

Points motivate customers to continue to spend money at your store. And they will redeem their points for goods in your store once they’ve collected enough.

You can see how the points system can encourage loyalty in customers. But there’s something else you need as well.

Loyalty program

Create a Tier System

The tricky part of creating the best customer loyalty programs is striking the right balance between desirable and attainable rewards.

Spending hundreds of dollars for $5 your next purchase won’t excite your customers. In fact, they may just quit being your customers as a result.

A tier system is a great way that you can encourage loyalty and repeat purchases.

You can offer small rewards for being part of the loyalty program. Then, as customers continue to shop with you, the value of their rewards increases.

You can use a gift certificate template to mail out larger rewards.

The best thing about the tiered setup is that customers get both short and long-term value from your loyalty program.

Many customers will work for better rewards and become loyal customers.

Final Thoughts on Customer Loyalty Programs

There you have it. The top tips to help you create customer loyalty programs that work.

Remember, the rewards of being a member are up to you. So long as you make them worthwhile, yours will be the customer loyalty card that people pull out again and again.

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