Well-executed loyalty programs can facilitate data collection, personalize on-site experiences, drive consumer engagement, and help brands identify their most valuable customers. However, many brands struggle to maximize return on investment for these programs. Virtually half of brands in L2’s Loyalty report are Laggards, characterized by limited program value and clunky digital integration.
Launching, operating, or revamping a successful loyalty program requires careful consideration and significant investment. Brands must first determine, based on industry trends and consumer sentiment, whether a loyalty program is the most effective way to encourage engagement. Brands that decide to operate full-fledged loyalty programs must be sure to clearly articulate the program’s value proposition to consumers and deliver meaningful benefits that will drive continued interest.
L2’s Loyalty: Checklist for Success report identifies five key factors necessary for a successful loyalty program: high program visibility, a streamlined signup process, a mix of monetary and experiential reward redemption, a tiered reward structure, and strong cross-channel integration.
Each of these factors facilitates a mutually beneficial value tradeoff between the brand and the consumer. To ensure that their programs are worth the investment, brands must make sure to strike this balance.