The blueprints to a successful loyalty program

I often get asked, “What’s the secret to a successful customer loyalty program?” Though there is no simple answer, I’ve learned that all decent rewards programs have a few things in common.

For starters, the backbone to a winning program is customer engagement. In order to foster that meaningful relationship, companies need to achieve what I describe in my book, The Loyalty Leap: Turning Customer Information into Customer Intimacy, as the “three Vs” of loyalty: value, visibility and voice.

Value is a fundamental requirement for an information exchange and a necessity for any loyalty program. The age-old practice of giving new customers 10 percent off their purchase is a good step in creating that value, but maintaining it means consistently delivering benefits that customers feel are commensurate with their spending.


The core purpose of a loyalty program is to form a deep understanding of the customer. This means attracting enough customers to collectively account for a significant portion of sales. If done on a sustained basis, the transactional history and the customer’s journey can be mapped, creating a viable business asset.

Loyalty plans need a platform for communication; a sounding board that enables the company to address customer issues on a  personal level. In an age of social media, making that voice heard is particularly important to creating customer engagement.

I’ve personally witnessed the dangers of non-effective communications to brands, as well as the benefits that come to a company that listens to its customers.

One story that comes to mind is of Peter Shankman and Morton’s The Steakhouse. Mr. Shankman was concluding a rather long business day, about to board a flight bound for Newark Airport, when he tweeted to the steakhouse.

The tweet, clearly a joke, made it in front of someone at Morton’s who arranged for an employee to meet Shankman at the airport with a 24 oz. porterhouse steak, an order of colossal shrimp, a side of potatoes, bread and silverware. The Morton’s example, though extreme, is just one of many that illustrates the benefits to maintaining communication lines with customers.

My personal experience at LoyaltyOne has shown that when the three Vs are in place and working properly, customers readily embrace loyalty programs. And though they may not receive a steak in exchange for their loyalty, customers will certainly appreciate the great service that comes with a loyalty program adhering to the three Vs.

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