Strategic Design Drives the Best Customer Loyalty Programs

By: Matt DeVries
image collage of customer loyalty program strategy elements

Note: This article is part one of a six-part series on the key components of a successful customer loyalty program and how an end-to-end (E2E) partner can deliver all six for a cohesive customer experience. Read on to learn the role of strategy and design, then return to explore the other five components in future Insights.  

You wouldn’t set off on a road trip before picking a destination, so why implement a customer loyalty program without the end goals in mind? 

Every customer loyalty strategy starts with identifying the program’s business objectives and the key results that will define its success. 

Launching or refining a customer loyalty program can make an impact on customer lifetime value and profitability. Enhancing customer satisfaction, influencing behavior and increasing engagement will win more than wallet share from each person who interacts with your brand. It will create brand advocates who drive your organization’s future.

When businesses see loyalty as a growth engine just as much as a retention tool, they invest accordingly to try to reach their goals. According to a 2023 PwC Customer Loyalty Executive Survey, 63% of executives say their company’s loyalty program budget increased in the latest planning cycle.

Unfortunately, many leaders default to spending on loyalty platform upgrades alone. While the platform is important, a short-sighted approach leaves out essential program components and can make customer loyalty initiatives fail. It often requires pulling in numerous vendors to cover different aspects of the program, and it results in a disjointed program that affects the customer experience.  

Instead, organizations should establish an end-to-end (E2E) customer loyalty partnership. The right partner visualizes your program’s lifecycle and maps program strategy across each phase.

Applying a Strategic Approach to Your Customer Loyalty Platform 

Navigating a strategic approach to a customer loyalty solution can feel daunting. Defining a cohesive and consistent strategy will impact everything you do: theme, design, naming convention, segmentation, grouping, targeting, communications, promotions, offers, awards, analytics and ROI proof. E2E partners provide a steady hand on the wheel, offering deep experience throughout planning and execution.   

Don’t settle for a strategic partner that operates on autopilot. Partners that consistently deliver optimization recommendations keep the program fresh and exciting in the minds of customers and helps differentiate your brand from competitors. The best partnerships will tie your customer loyalty program to your brand in a way that amplifies your message and brand promise.

Download Now: Upgrade Your Customer Loyalty Platform Ebook

Mapping Customer Loyalty Strategy Across Every Phase 

A partner who understands your objectives can help get you where your brand is trying to go. A great E2E partner isn’t stuck on a fixed route and uses customer journey mapping and feedback to identify roadblocks and inflection points to adjust the approach accordingly. 

Here’s how that can play out across the lifecycle of a customer loyalty program.

Program Design Phase

Most platform providers have a reasonable handle on the functional aspects of a program: how people earn, redemption of points for discounts, basic reporting. A strategic, E2E approach goes further. It looks beyond the logistics to tap into the unique aspects of brand identity. 

Loyalty programs that align with a brand’s values encourage customers to build emotional connections with the brand. Use a human-centered design approach that uncovers meaningful audience insights to add value and bring your brand identity to life. This is the only way to move from transactional to transformational loyalty programs. 

Related: Discover how a banking institution won strategic moments in the customer journey, causing engagement to skyrocket.

Program Launch & Execution

Organizations that take a platform-focused route tend to mistake the launch date as the finish line. An E2E partner recognizes it’s actually the starting point for your customer’s experience and deploys their team resources around a test-and-learn strategy. 

Not only do they pay attention to day-to-day functionality, but they also verify the program connects with audiences as intended. Listening to customer feedback, then acting to deliver is the difference between long-term success and a program that fizzles.  

Program Optimization

Having a team at-the-ready to analyze loyalty program data is about more than keeping an eye on your dashboards. Strong analytics is one of the six primary components of a successful loyalty program, and should be connected to a powerful loyalty strategy to continuously inform your program evolution. 

Effective customer loyalty programs must continuously evolve. Why?  

  • Customers get bored. An optimized program keeps them engaged. 
  • Brands need customers to demonstrate new behaviors and take new actions. Loyalty programs can turn frequent purchasers into ongoing subscribers, for instance. 
  • Brands evolve their product offering. Strategic incentives can encourage customers to embrace something new.
  • Competitors challenge your brand, and you need to differentiate. Program enhancements can reinforce your brand promise. 
  • Different customer segments need different ways of interacting with your brand. Think regionally, or by age and gender demographics.  

Don’t get stranded in a zero-party data desert. A standout E2E partner has tools to help you catch missing information that fills in critical gaps in your business, and strategic segmentation capabilities to put that data to work.  

Related: Explore our guide to perfecting segmentation strategy. 

Remember, optimizations don’t have to be overhauls. Sometimes the smallest tweaks have the biggest impact on program effectiveness. 

An E2E partner gets to know your business inside and out, which enables them to combine the raw data of your business with the context of your brand. Occasionally, that looks like a splashy promotion recommendation that delivers remarkable results. More often, it’s a tiny behind-the-scenes shift, like changing the day or time you send communications, or revising a heading. Incremental improvements can compound into significant successes.

Partners Power Strategy & Execution  

An E2E provider gives your brand the strategy it needs to deliver a compelling customer loyalty program. As an extension of your team, great partners get to the bottom of what customers love about your brand. They have the tools that fuel long-term engagement strategy (data collection, surveying capabilities, primary and secondary research) and the responsiveness to act at the moments that matter in the customer journey.  

Discover more differences between technology-only providers and E2E customer loyalty partners in this side-by-side comparison

Download Now: Upgrade Your Customer Loyalty Platform
Matt DeVries
Matt DeVries

Matt DeVries has more than 10 years’ experience managing loyalty and engagement solution design. With an educational background in both marketing and organizational behavior, Matt's vast expertise and knowledge have helped shape effective solutions for many leading brands worldwide. His primary focus is understanding each client’s needs and industry concerns, which he couples with a solution-minded approach to position them for incredible results. In his free time, Matt enjoys off-roading with his family and camping off the grid in remote spots across the country, especially the southwest.