A Better Loyalty Program

Make sure yours doesn't suck

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October 8th, 2020 at 11:44pm

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I have experience.

As the president of a company which helps clients build and integrate loyalty program software, and as someone who has done analytics on the rich data that comes back from those systems, I have horror stories to tell. It is astonishing how badly some retailers do loyalty programs.

Funneling complex input to simple output takes work, discipline, and tenacity. Suck it up and do it anyway.

I've also been a customer of loyalty programs. Some are ghastly. Most are okay. Some are brilliant. What makes a good one?


It doesn't matter what a company's product is, or what its margins are. The cornerstone of a successful loyalty program is simplicity.

As a programmer, I know that achieving simplicity is hard. I've experienced how excruciating it can be to combine a variety of inputs to arrive at exactly the right button on just the right page. So yes, retailers, funneling complexity to simple output takes work, discipline, and tenacity. Suck it up and do it anyway.

I've also been a customer of loyalty programs. Some are terrible. Most are okay. Some are brilliant.

The rules

Retailers, when it comes to your loyalty program:

  • For the love of God, get rid of tiers
  • Have rules about earning and redeeming points so easy to understand it's insulting
  • Encourage small to medium spends and regular, easily attainable rewards if appropriate to your space; also dangle a few large carrots on the horizon
  • Encourage referrals and upsells for bonus points—the rules/parameters of which should also be absurdly simple
  • Use the same language about your loyalty program all the time, in all situations
  • Never, ever, ever bait and switch on points or rewards
  • Create separate support for loyalty customers and staff it with L2 or even L3
  • Offer points for short surveys with one or two goal questions about the program, not products
  • Market to your loyalty customers 3x as much as the non-loyalty customers with simple, one image/one message/one offer branded material
  • If you pushed back on that previous point, you definitely need to adhere to it (responses to a ten-image newsletter are much more difficult to understand than an email with one image/one offer—we're talking lizard brain shit here, folks, and as a company you need to understand the lizard brain)
  • Evaluate the data constantly—it's telling you exactly what's working

Two goals support all of the rules above:

  1. Make life easy on your customer (don't you appreciate that in your life?)
  2. Give the analytics team a lot to work with, and they will make you look like a rock star

And yet...so many loyalty programs are complicated, they don't encourage regular spends, or they don't solicit feedback about the program—they spend too much time asking about product. And the emails with fifteen CTAs (or even three), and half of them are blinking or moving? STOP IT. (I have seen conflicting data on whether customers like or dislike blinking crap.)

But take this to the bank: one email, one image, one offer. Otherwise you won't understand some of your customers' deeper motivations.

The cornerstone of a successful loyalty program is simplicity.

By the way, customers, you should:

  • Reward retailers who have simple, fun programs by patronizing them as much as possible and actually thanking them—I'm serious, send them an email
  • Tell retailers whose programs are bad that they could be better—be nice about it—and explain why you don't like the program

I love loyalty programs. When they're done right, everyone wins.

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