Worldwide, 84% of shoppers say they’re more likely to shop at retailers with loyalty programs. However, a mere 9.5% say they actively redeem offers. So, while the concept is obviously attractive to customers, execution evidently is not. The purpose of these programs is to encourage customers to shop more often and buy more. But there’s a lot more to creating a loyalty program that works than simply handing out “buy-10-get-one-free” punch cards.

Some retailers believe that loyalty programs work only for frequently purchased merchandise. But that’s not true. The key is creating a loyalty program tailored to your products and clientele, whether you sell bakery goods, apparel, jewelry, or automobiles.

Successful loyalty programs require strategic thinking, careful planning, and personalization. Follow these 7 steps to devise a program that will entice the kind of loyalty you desire:

Create a comprehensive plan.

It should cover:

• What you’ll offer – coupons, discounts, cash back, rebates, etc.
• Rewards intervals – points thresholds or calendar timing
• Program branding and marketing

Careful planning will help you avoid unintended consequences.

Decide how much reward to offer.

The punch card we mentioned above may be a nice “thank you” offer for regular customers, but it won’t increase allegiance to your store. Incentives should be meaningful to your customers and unique to your brand.

Consider partnering with other businesses to help cover the cost. Cross-promote with neighboring or complementary businesses, or use “multiplier” incentives (such as when grocery stores double manufacturers’ coupons).

Unfortunately, rewards that seem impossible to achieve may actually dissuade customers from even trying. If you do sell products that are purchased infrequently, consider how you can help customers “win” their reward sooner. Many retailers offer store-specific credit cards that generate rewards points.

Custom-tailor incentives for each customer.

The more individually relevant your rewards, the more likely they are to engage customers and spur additional buying. A discount on something your customer might want could draw interest, but a discount on something you know she wants and buys is a sure winner.

Track and study customer purchasing behavior.

It’s the only way to identify what matters to them and what will earn their future devotion. You can serve them better, every time they enter your store. Happily, the more they buy, the more you learn about their shopping habits and preferences. You’re creating an upward spiral of loyalty success.

Make sure you have the right technology and procedures in place.

It should be convenient for customers to enroll and perhaps even track their own progress. For you, it should be easy to manage your program by capturing customer information and gleaning insights from it, organizing and communicating rewards promotions, etc.

Train all employees on program details.

That way they can “sell” participation. 

Promote your program.

Build awareness and excitement through:

• In-store promotion
• Bag stuffers or receipt messaging
• Website-based promotion
• Email
• Texting
• Social media posts

With the right strategy and personalization in place, you can create a loyalty program that works – for your store and for your customers.