How to setup your own loyalty system in 7 steps

Jacqueline B.
Apr 24, 2019 · 5 min read

Did you know that loyal customers spend 30% more according to RjMetrics and they spend more on expensive products than new customers. Other than that, with a loyal customer you safe on influencer marketing as they refer 50% more people in average.

But high financial inefficiencies and customer acquisition costs as well as low interoperability of programs lead to low engagement as well as redemption from consumer sides. The outcome are unsatisfied customers and frustrated companies.

So, what are the key factors for a successful loyalty program? To answer this question and to give you a guideline, we will publish in the coming weeks a series of blog-posts dedicated to this topic.

To make sure you are able to setup a successful loyalty system, the series of blogposts will be addressing the components which are key factors. It shows you how you can create your own loyalty system by following our simple guideline — actually a checklist on what you need. Other then that we will show you how collaborations with experts can help you setting up a loyalty system, and how to benefit most of them.

To start off the series you find here the 7 steps to set-up a loyalty program that maximizes customer engagement.

1. Goals & KPI’s

First of all you need to know exactly which goals you want to reach and therefore set clear KPIs (Key Performance Indicators). Let’s say you want to reach X% more revenue in a certain time (goal) for example, it makes sense to look at the amount spent of your customers (KPI). Or if you want to generate X more users until end of the year (goal), you can track the monthly user growth rate (KPI). Now ask yourself, which goals and KPIs are important for your company?

> https://blog.qiibee.com/valuable-goals-kpis-to-measure-your-loyalty-programs-success-62568ea82182

2. Reward Actions & Rules

When setting up a loyalty program there are various reward actions and rules you can stick to. How do you want to reward your customers? Do you want to work with points, vouchers, stamps or chash-back? What do you want to reward: purchase, content creation, app registration, referral or other activities? In this case, the only limit is your imagination. Another question is, how will the interface for your customers and yourself look like? Leaderboards as well as levels and tiers for example, are perfect tools to work with.

> https://blog.qiibee.com/setting-reward-actions-and-rules-to-achieve-your-business-goals-75bb90f29f44

3. Redemption Options

As a loyalty program provider you must offer your customers different options to redeem their rewards. As many different reward forms you can offer, as many redemption options are there for you. For example, you need to decide if you want your customers to redeem their rewards for real products and services or for special experiences, e.g. get your VIP pass? Or do you want to collaborate with other partners to offer their products to your customers? The question is, what balance are you going to use between monetary or non-monetary (e.g. digital goods) redemption options? What will you decide?

> https://blog.qiibee.com/designing-redemption-options-that-appeal-to-your-customers-83524b7e56e2

4. Partner Integration

As mentioned before, you benefit from collaborations with partners by creating a new revenue stream through the opportunity to promote your partners products and services with your loyalty system. Some of the questions you need to answer are: Which promotions could you offer your partners? Which partners would make sense for these kind of collaborations? And which business models make most sense to integrate with partners?

> https://blog.qiibee.com/how-partner-integration-can-double-your-loyalty-programs-success-4f704c6b1f58

5. Technologies to use

When creating a loyalty system, one of the core questions is about which technology should be used. Are you running a physical store or an online store? If you run a physical store, which POS system are you using? How do you integrate ERP & CRM Systems for a smooth data flow? And which tech infrastructure are you using to store data and rewards? Are you already using blockchain in your tech stack? Which campaign management should we work with? You can see there are a lot of questions that need to be answered on a technological side. There are different players on the market, such as the network of our partners, which offer plug & play solution as well as customized development. If you don’t have the resources in-house, it’s great to have experts guiding you through this part.

> https://blog.qiibee.com/technologies-to-use-for-a-successful-loyalty-program-b785fff9e7d6

6. Marketing

One of the most important things when running a loyalty system, are right integration in the customer journey and the marketing activities used to promote it. To capitalize your loyalty program, You have to ask yourself: Which touch points are most beneficial to attract and engage as many customers as possible? Should I work with Email-marketing or SMS messages? How can I engage my social media audience to enter my loyalty program? Or is the right way doing advertising on different classic online and outdoor channels? The right way is tied to your overall marketing strategy and of course to the goals you set for your loyalty system.

> https://blog.qiibee.com/marketing-your-loyalty-program-in-the-most-effective-and-efficient-way-be64d2584499

7. Measure, Analyze & Optimize

Last but certainly not least, you have to get an overview of your loyalty systems actions. Without measuring and critically analyzing your loyalty systems outcome you cannot optimize it. You should ask yourself; Did we reach our goals and were the KPIs useful? Did we choose the right reward actions and redemption options? Was it useful to collaborate with partners? Could we benefit from the technology we’ve chosen or could we improve it? Was the reach through our marketing campaign fulfilling? Being able to answer and track these questions with the right data and technology is an important part of the management of a loyalty system.

> https://blog.qiibee.com/how-to-measure-and-analyze-the-success-of-your-customer-loyalty-program-and-optimize-it-a4c085e244e7

These are the 7 steps that we suggest you to follow, when you set-up a new loyalty system or upgrade an existing one. During the next couple of weeks we will cover one topic after the other. We want you to be able to offer your customers a meaningful loyalty program, and with that we want you to be rewarded with greatest customer loyalty.

Should you be curious and cannot wait for every single blogpost, we can help you answer these questions. Just contact us any time via welcome@qiibee.com

Disclaimer: All the information in this article are for informational purposes only and do not constitute legal, accounting, or investment advice of any kind. This article does not represent a solicitation for investment, nor does it represent an offering or sale, public or private, of any kind of financial instrument, security or otherwise, in any jurisdiction.

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