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The Kangaroo Rewards Blog

Make your customers smile with tips on rewards programs, customer retention, and commerce in general.

Questions to Ask before Starting a Loyalty Program

The e-commerce market is competitive, and it’s more important now than ever to retain customers and grow your customer base. While achieving this relies heavily on providing quality products and offering a positive customer experience, you can also benefit from providing your customers with added incentives to continue doing business with you. Loyalty programs are one such method, and they have proven their success for multiple brands. Before setting up a customer rewards program, there are some important questions you should ask yourself during the planning stage. The following questions will help give you a better idea of your goal and purpose for the program, and help you get set up.

What kind of customers should I target?

One of the first steps before creating or implementing a customer loyalty program is to know which kind of customers you want to target. Don’t just provide it for anyone; think about what your target customers want, and provide something they will find interest and value in. For example, you can provide rewards to first-time customers, returning customers, drifters, or sleepers. Each customer is motivated by different incentives, so by focusing on one segment you can create your first loyalty program and better measure its effectiveness.

What does it cost?

Another important key to consider is how much you are investing to provide these rewards to grow your customer base. Typical loyalty programs will cost about three to five percent of the revenue. Your budget for rewards will help you determine what kinds of rewards you can offer. 

What if I’m not technically savvy? Who will implement my loyalty program?

If technology isn’t your thing, there are professional companies that have loyalty program software you can invest in. Ready-to-use loyalty programs can be easily integrated into your online store, so you won’t have to stress about uncertainty, failures, and endless trials. 

How will I measure my results?

You can measure results by focusing on the details. Ask yourself questions such as:

  • Where are you now in terms of numbers?
  • What would you like to achieve with your loyalty program in terms of numbers?
  • What is your timeline for this goal?

A numbers-based plan can show you your return on investment (ROI), and can help you keep track of your investments over the next few months or your timeline.

What actions do I want from customers?

Think about what actions a customer makes that will be beneficial to your online store. Customers can recommend your most popular product to new visitors, and regular customers can write informative reviews about products they purchased and liked. If your customers can convince new visitors that your online store has what they need, you’ve got free advertising and marketing at your fingertips. Aside from your online store, you can also use your social media channels, third-party pages, and mobile apps to encourage these desirable customer actions.

How do I adjust the loyalty program based on feedback?

It’s not always enough to offer something free or at a discount to a customer. Sometimes you need to bring gamification into the program. If customers can earn points, get rewards via email or through the app, achieve higher customer statuses, or see their ranks on a leaderboard, they will have more of an incentive to participate. By introducing competition between customers into your rewards program, you will get more participation and benefit from your investment.

Is it working for my business?

Measuring your loyalty program’s success is important if you want to continue improving it and growing your customer base. Take a medium-sized coffee shop for example: Most customers come to buy coffee, but if they are enticed by sandwiches or muffins, they will buy more than they came for and provide a better return for the business. For the coffee business, they are aware their customers love coffee, but know what additional items would bring value to those customers. By providing customers with the choice to get more than what they came for, you will see success with your program. Add to that some extra intelligence on your customers, such as when they usually come to the store, how often do they come, etc., and leverage this information to target the right customers at the right time.

Are customers getting any value?

Whatever discount or reward you choose to offer, it must bring value to your customers. Take in suggestions and ideas from your customers as to what they would be interested in: free items, discounts, trying something new, etc. There are different ways to show your customers you appreciate them, so choose the one that has the biggest impact. You can gather this information by conducting an e-mail survey.

What are my competitors doing?

Direct and indirect competition will influence your reward choices. Depending on your industry, it may be more important for you to provide multiple options to stand out from your competition and keep your customers engaged. Instead of copying what your competitors are doing, find out how you can create an even better customer experience, even if it is unrelated to your industry. 

How will I market my program?

Your loyalty program will not produce the desired results unless you can spread the word.Make sure your customers know about your program and that they understand all the benefits you will be providing through it. It’s also important to reinforce this information at the right times and the right amount to encourage their participation.

Build a Customer Loyalty Program with Kangaroo Rewards 

If you want to set up a successful customer rewards program, check out Kangaroo Rewards’ software. Our platform can help you attract, engage, and retain customers in an automated way, with minimal effort and at an affordable cost. When you start leveraging your own customer database, you’ll be amazed at the results—Kangaroo Rewards helps you engage your customers and foster better customer experiences. Contact us today to request a live demo and learn more about how we can help you launch your customer loyalty program. For more information about out plans and pricing, visit our web site.

Written by Kangaroo Rewards on Friday January 5, 2018

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