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8 Top Tips for Creating Killer Customer Loyalty Programs in 2021

5 Mins read

Keeping your existing customers on board is a tough task in this competitive world. You need a mix of marketing strategies and innovative customer loyalty programs if you want to satisfy customers, increase customer engagement, and boost conversions.

In recent years, customer loyalty programs have changed drastically, going digital, getting more effective, and offering unique experiences.

Let’s take a look at how to create a customer loyalty program that works.

What is a customer loyalty program?

A customer loyalty program is a set of strategies enabling you to offer customers timely incentives based on their previous buying habits with you.

However, digitalization has changed the way customers transact with companies. Loyal customers aren’t just regular buyers anymore.

Loyal customers could be:

  • Someone who brings in referrals through social sharing
  • someone who spreads a good word for you
  • someone who has stuck with you and resisted switching
  • someone who digitally subscribes to your offerings.

Today’s customer loyalty programs should reflect the needs of modern customers.

Customer loyalty is the product of a good customer experience. So if you want to build an effective customer loyalty program, delivering a seamless experience and service across the customer life cycle should be a priority.

Traits of a modern customer loyalty program

  • Helps you offer a frictionless transactional experience to customers across all touchpoints.
  • Helps you embrace new technology to make most of customer data and personalized offerings.
  • Helps you provide value through affiliate partnerships and third-party contracts.
  • Brings you and your customers closer.

How to create customer loyalty programs: 8 tips

1. Do your research

Starbucks claims their customer loyalty program played a vital role in creating a 26% rise in profit and 11% jump in total revenue for 2013’s second-quarter fiscal results.

To execute a successful customer loyalty program, your team needs to put in the research before any implementation begins. There are various ways to approach customer loyalty, research will help you choose the one that best fits your business requirements.

Be clear on the objective of your campaign, analyze the nature and size of your business, and create a program that helps you accomplish your business goals. Don’t forget to take into account customer expectations, behavior, and current market trends.

Customer data can come from a variety of sources, like your website analytics, inventory history, sales, conversations, etc. The idea here is to truly understand customer behavior and therefore the sorts of campaigns your customers will respond well to.

By collecting and properly analyzing data, not only can you use it to design customer loyalty programs, you can even improve your products or services. In the end, this all helps in delivering excellent customer service.

2. Keep it simple

If you overcomplicate your loyalty rewards program, there is always the chance that customers won’t understand it. If that happens, it will just end up being ignored and forgotten.

Avoid this by making the process easy for customers to understand.

But not only that, make it simple for your customers to sign up to as well.

Create a points system that’s easy to track so the situation is clear. Give out points to customers on the back of purchases, explaining how they can redeem those accumulated points, whether or not those points expire, and if so, when.


Have a look at the JetBlue TrueBlue program for an example of how to set up an ideal customer loyalty program.

3. Innovate to personalized

Artificial intelligence is helping companies craft more personalized loyalty programs. When companies invest in these technologies, they equip themselves with the tools to offer more proactive service.

Sephora is a great example of this. Research by Sailthru on the personalization capability of brands shows Sephora coming out as a winner because:

  • They offer a seamless omnichannel experience to their customers, be it on the web, mobile, or in a brick and mortar store.
  • They personalize their product with multifaceted content and description.
  • They launched a tri-tiered “Beauty Insider” program to offer customers more lavish rewards and gifts.
  • They give customers a product try-on with a virtual assistant, to help them find the perfect product for their skin type.

Personalizing customer experience doesn’t have to be complicated. Many brands personalize experiences with the help of visual engagement tools, enabling them to assist customers by accessing their web or mobile browsers and collaborate on completing tasks.

4. Rewards points – traditional yet effective

The rewards you provide should make financial sense for your business, whilst simultaneously offering something your customers want. Whether you choose to offer your customers discounts on future purchases, free rewards, or even a combination of the two, always remember the most important rule: The rewards have to offer value to the customer.


Some grocery stores have partnerships with fuel companies to offer discounts on gas. As gas is an essential commodity and an unavoidable cost for many consumers, this is a very useful tactic. These programs often utilize cards already used for getting discounts, with insightful sales data provided on the back of it.


5. Stay connected with your customers

Experian data shows emails targeted toward your loyalty program participants have 40% higher open rates, 22% higher click-through rates, 29% higher transaction rates, and 11% higher revenue per email.

It is an absolute necessity to stay in touch with your customers after creating your loyalty program and email campaigns are one of the best ways to do this.

Using an email campaign to let your customers know about renewals (if your program requires it), and special deals just for loyal members, can make your program work better.

Message them about the campaign after a certain amount of time as a reminder. This helps build a positive impression of your brand. Below is a brilliant example of how to stay in touch with customers:


The company has demonstrated creativity with this “We miss you” campaign!

Another great way of connecting with your customer is through live chat. It allows you to inform customers about loyalty programs during conversations as well as building trust, increasing customer loyalty.

6. Market the program

No matter how great your customer loyalty program is unless your customers know about it, it’s not going to get you very far. Invest in marketing so your customers are aware. Make sure you create a marketing strategy that fits with your business.

Below are some of the ways you can go about it:

  • Online Ads
  • Social media
  • Press Releases
  • Newspaper Ads
  • Outdoor hoardings
  • In-store signage
  • Send out a customer satisfaction survey
  • Send email newsletter
  • Develop a customer referral program
  • Hold an online contest
  • Publish distributed content

7. Choose incentives carefully

When deciding on the most appropriate incentives for your loyalty program, analyze the needs and behavior of your target customers. Sometimes freebies devalue your product or services, so try and think of options that make incentives exclusive.

Experiential rewards are popular because they make customers feel good, adding value to their lives. They also help your business stand out from the crowd and generate long-term loyalty in your customers.

For instance, In India, Starbucks has designed a fantastic loyalty program called My Starbucks Rewards. There are multiple ways to enroll in the program, including creating an account or downloading the Starbucks India mobile app. For each purchase, you receive one “Star”.

8. Set up exclusive deals and discounts for your customers via social media

Your social media followers and email subscribers are all potential customers. Use social media and email newsletters to give your followers exciting and exclusive limited-time deals and discounts.

Try creating a unique hashtag for the offer. Provide a discount code and use the hashtag across all your social media, keeping it consistent during the campaign. You can easily track and tweak things based on how the campaign is performing.

This type of marketing campaign makes your customers feel like they are part of an exclusive club, and as a result, they will refer your business, providing new people to join your email list and follow you on social media channels.

Loyal customers bring long-term success

Done right, customer loyalty programs can boost profits and improve customer retention. This means they have the power to make a significant impact on your bottom line. Implement the right loyalty program for your customers, manage it well, and you can ensure long-lasting success for your business.

Have any of the tips above helped you create a customer loyalty program? Think we missed anything? Let us know in the comments.

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