Rewarding Customer Loyalty: The best methods to consider

It's generally much easier to retain an existing customer than it is to recruit a new one. It, therefore, makes sense to prioritise retaining customer loyalty. With that in mind, Distinctive Confectionery share their expertise on the best methods to consider for rewarding your loyal customers.

Start by identifying your loyal customers

Before you can reward customer loyalty, you have to be able to identify who your loyal customers are. One obvious way to do this is to run a loyalty programme. The mechanics of this can actually be fairly straightforward.

You may find that your payment software has the functionality to run a loyalty program. This may be built in or available as an add-on. If it doesn’t, there are stand-alone loyalty programme software options. You might also be able to run a loyalty programme through your standard customer-relationship management software.

In addition to your standard loyalty programme, you might want to consider offering special gestures for customers who go out of their way to help you. For example, if a customer makes a referral, you might want to reward them for it even if they don’t shop with you very often.

Identify your business goals

You will usually get the most benefit out of a loyalty programme if you align it with your business goals. Essentially, you want to reward the behaviour that matters most to you. You can update your loyalty programme as your business develops. Ideally, however, you should keep changes to a minimum so as to maximise consistency for your customers (and your business).

Common business goals include the following.

• Increasing customer retention
• Increasing customer value (over the lifetime and/or over a specific period)
• Encouraging customers to become brand ambassadors
• Collecting data for business analysis 
• Increasing upselling and cross-selling opportunities 

Once you have identified your goals, you can then identify actions that show a customer has met one of them.

For example, if you are encouraging customer retention, then you would look at actions that show a customer has made repeat purchases. You would then assign a value or range of values to these actions. For example, you could give each purchase the same value regardless of how much it cost or have the value scale in relation to the cost.

Once you have done this, it’s advisable to monitor your data for a while (usually one to three months) to get a baseline reading of where you are now. You can then see how this changes when you implement your customer loyalty programme.

Choosing the right rewards

When choosing rewards for your loyalty programme, it’s important to think about both cost and the level of appeal to your particular customer demographic.

Digital rewards

Access to exclusive and highly relevant digital content can be very appealing to your loyal customers. Digital content isn’t exactly free to create. There is a production cost. In general, however, this cost is fairly low. What’s more, once the content is created it can be reused indefinitely. It can even be repurposed in other formats. This means digital rewards are highly cost-effective.

Rewards in kind

Rewards in kind are rewards based on the products/services you sell. For example, you could offer early access to new drops, have flash sales with limited access or provide time-limited discount codes. Again, none of these are exactly free but they all encourage customers to make a purchase with you.

Physical rewards

Physical rewards create a tangible link between you and your customers. This means that well-chosen physical rewards are likely to be the most impactful rewards you can offer. For simplicity (and maximum cost-effectiveness), it’s generally best only to offer a limited range of physical rewards. These can be variations on a theme such as different types of confectionery.

Confectionery is, in fact, often an ideal choice as a reward for customer loyalty. It’s popular with most people, affordable, easy to store (and post) and can often be customised. Possibly most importantly of all, it provides an enjoyable experience rather than just becoming another item in a home or workplace.