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How to Build a Customer Loyalty Programme for Customer Retention

Business · 5 Mins Read

How to Build a Customer Loyalty Programme for Customer Retention

Customer loyalty is essential to any brand seeking to grow its business. In a market saturated with competing products and services, a positive shopping experience  with a brand makes it more likely for consumers to return and patronise the same business. In fact, businesses are up to 14 times more likely to sell their products to an existing customer as compared to a new customer. 

If you’re looking for a mutually beneficial strategy to grow your revenue and build customer loyalty, introducing a customer loyalty solution or customer rewards programme is a great way to incentivise loyal customers from your existing customer base. Some programmes might even help with customer acquisition. Following which are a few tips businesses can consider when building a customer loyalty and retention programme.

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1. Understand your audience

Knowledge of your audience is foundational to developing a successful customer loyalty programme. This includes understanding their needs and wants, pain points and triggers, and how your offerings and loyalty rewards add value to their lives. 

Rewards only work to incentivise loyalty if your customers see value in them. Therefore, it is important for businesses to cultivate an intimate understanding of customer attitudes towards their brands. You can engage with your customers to gather their feedback and insights on your products and services. 

In the digital age, building engagement using quick polls on social media platforms, or sending out a survey link as part of a monthly newsletter can be opportunities for brands to get a clearer picture of consumer attitudes. You may also consider any platform you use to regularly engage with your customers, whether it’s your e-commerce website hosted on Shopify or a mobile-friendly web application.

For instance, DHL Express understands how complex shipping can be, and the impact it has on your customers. From consolidating shipments to clearing customs, there’s plenty that goes into it. Switching from manual processes, whether it’s filling paper waybills or ringing the hotline for a last-minute shipment change, MyDHL+ online shipping tool eliminates minutes and hours spent on administrative processes so that you can cater more time to areas that matter more for your business. What’s more significant is the insights that you can draw using these digital tools. With MyDHL+, we can analyse trends such as popular shipping destinations, commodities and parcel sizes. Noting that these are important aspects for our customers, we can further improve the experience by creating more personalised shipping products, like preferred shipment rates, as a strategy to retain customer loyalty.

2. Choose your loyalty programme type

Customer loyalty programmes come in many forms and there are few limitations in terms of how creative a brand can get with them. It is best to build a loyalty programme that uniquely complements your brand’s image and offerings. Following on are examples of some popular loyalty schemes and strategies. 

a. Points Programmes

These allow customers to accumulate points with every purchase they make. After accumulating a certain amount, these points can then be redeemed for rewards. 

b. Cash Back Programmes

These are similar to points programmes, with the difference being that the incentivising reward for spending is receiving cash in return. These programmes usually require customers to spend a minimum amount. 

c. Tiered Loyalty Programmes

These offer different redeemable rewards depending on how much a customer has spent with a brand. Higher tiers often correlate to better rewards and benefits, incentivising more spending with an element of gamification. 

d. Value-Based Loyalty Programs

These offer value to customers in ways apart from monetary rewards. This might look like access to exclusive online communities, networking opportunities, in-person customer appreciation events and more. 

e. Premium Loyalty Programmes

These are fee-based loyalty programmes. The customer pays upfront for instant benefits they can enjoy as a part of a membership programme. Research by McKinsey suggests that members of premium loyalty programs are up to 60% more likely to spend more on a brand, as opposed to 30% likelihood of more spending with free membership programmes.  

3. Choose a behaviour to reward

Different brands will want to reward different customer behaviours in line with their business goals. Some behaviours to reward include:

  • Following or liking a social media page – for brands seeking to grow their social media presence

  • New customer referrals – for brands who are hoping to improve on customer acquisition targets 

  • Purchasing a signature item – for brands who want to increase sales of a specific product

  • Leaving a positive review – for brands looking to build their reputation 

  • Doing business with your brand during a specific season or period

  • Spending over a certain amount. 

4. Track your loyalty programme’s success

Set your goals for your loyalty programme and consider the methods you can use to measure its success. This can be as simple as sending out a survey to gauge customer satisfaction with the new rewards programme, or a deep dive into more technical statistics like your customer retention rate, negative churn rate, the amount of referral traffic or social media mentions. 

5. Engage with a reliable logistics partner

While you may have a strong customer loyalty programme in place, it would be of no use if customers do not receive their purchased items they have ordered. Shipment delays, incorrect or even damaged deliveries will deter customers from shopping with you again, let alone reaping the benefits of a loyalty programme. 

With DHL Express, you can expect deliveries to reach their intended recipients via the fastest route wherever they are in the world. Specialising in international express door-to-door delivery, with a choice to fulfil orders by a specific time, in a number of days or on the same day itself, DHL Express ensures your customers can receive their orders within the quickest turnaround time possible, safely.

Work your way up to the most successful rewards programme today by first creating a business account with DHL Express.

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