How to Build a Customer Loyalty Program

Picture of Katie Fleming

Katie Fleming

Co-founder and COO of Owner Actions

A customer with shopping bags is rewarded with a customer loyalty program.

You’ve likely heard the statistics: It’s much more cost-effective to keep past customers on your roster than go after new ones. It’s also far easier. There are lots of retention strategies you can use to encourage repeat sales, build engagement, drive advocacy, and foster loyalty. Here, we’ll talk about one of the programs you can build up to drive retention: a customer loyalty program.


Do customers care about loyalty programs?

According to one study, the answer is a resounding “Yes!” In this study, Yotpo reports that 68% of customers already loyal to a business will join a loyalty program offered to them. Those customers are eager to benefit from doing what they’re already doing—buying from a business.

So what’s the benefit of including these loyal customers in a loyalty program? It’s this: A customer in a loyalty program is likely to buy even more and stay with your business for longer. Further, if they’re incentivized to do so, they’ll make referrals to your business and post and share reviews that can help you introduce new customers to your solutions.


What kinds of rewards matter to my customers?

Many loyalty programs allow customers to cash in their points for savings on a future purchase. This option is often appreciated, but it can fall short on the “fun” factor.

Instead, you might allow your customers to earn free merchandise, experiences, or higher loyalty status tiers that unlock ongoing rewards. Some business owners choose options such as free priority shipping, exclusive sales, friends and family discounts, or first-in-line previews of new products entering your store.

But, importantly, choose options that matter to your customers. Use a survey tool like Pollfish to find out what they believe is a meaningful form of acknowledgment for sticking with your business. Then, add your own insights to include benefits that will surprise and delight your customers.


How would my customers earn rewards?

One easy option is to reward your customers for purchases, but other options could be just as effective.

Consider whether these options would work for your business:

  • Writing or submitting video reviews on your website or a social platform
  • Liking or following your social media pages
  • Viewing your video content
  • Subscribing to your blog
  • Referring a customer to your business
  • Completing quizzes that help you gather more data on their demographics, goals, and preferences


Will a loyalty program be costly to implement?

Loyalty programs do come at a cost. There are setup fees, marketing fees, maintenance fees, tech support wages, and the cost of your own time, which you’ll invest as you build and structure your loyalty program.

But when they’re designed, configured, and marketed well, customer loyalty programs can actually drive more sales. This often occurs when loyalty members come close to receiving a reward (or hitting a new point threshold) and want to claim their next reward now rather than waiting or risk missing it altogether. It also happens when a customer’s points are about to expire, and they want to buy enough to attain a reward before losing them.

Driving sales is one way to counter the costs. Here’s another: When you use your loyalty program to learn about your customers, their buying patterns, and their preferences, you can use your marketing dollars more wisely and eliminate some ineffective spending.

Benefits can outweigh the costs, but the costs do matter. Be sure to budget program expenses so you can make sure it’s a wise move for your business. This guide from Antavo can help you work through the costs.


Is it a smart move to build a customer loyalty program for my business?

It can be, so long as it meets four important objectives:

  1. The program aligns with the objective of your business.
  2. It rewards customers in ways that matter to them.
  3. It helps you achieve meaningful goals.
  4. It’s a financially smart move for your business.


How do I build a customer loyalty program?

Some business owners opt for a custom program. If this is the path you’d like to consider, you’ll likely need the help of a programmer experienced in this kind of program design. Keep in mind that this option can be costly and time-consuming.

Instead, many business owners opt to use customer loyalty services that offer the concept they have in mind. There are several great options that might meet your objectives. The following two are among our favorites:


You can learn more about these programs in this guide:


After establishing your program, be sure to give your loyalty program a great, memorable name. Settle on something that excites your customers, motivates them to sign up, and signals the experiences they could receive for joining.

Then, create a plan for marketing its launch and ensuring it has a real, lasting impact on your relationship with your customers. You can work with an experienced marketer to help you succeed with this step.

Would you like to connect with a marketer? You can check out a few of our favorites here:


No Boundaries Marketing

Your Business. Our Forte.

No Boundaries’ team of experts know marketing—in every format. You can count of their expertise and understanding of marketing strategies across a wide number of industries to help your business stand out online and offline and convert prospects again and again. Interested in learning more? Follow the link below to check out some of No Boundaries’ digital marketing services. 

Creative Analytics

Digital Marketing Experts

The team members at Creative Analytics are omnichannel marketing and experts. For more than 15 years, they’ve been helping companies in all 50 states with compelling branding, marketing, print design, and graphic design to win new customers and engage audiences. Check out their work—and start chatting with the team about your marketing and branding needs—by following the link below.


A Designer for Everything

You may already know Penji as a go-to resource for graphic design. The Penji team also offers a scalable service you can use to create digital ads, landing pages, print campaigns, promotional materials, packaging, and much more. Follow the link below to visit Penji’s website. Then, start setting up an unlimited number of projects for one flat monthly rate.

Check this out: For a limited time, you can save up to 15% off the first month of any Penji plan with this coupon code: OWNERACTIONS15. Restrictions may apply. Visit Penji’s website for details.


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