Expanding a customer base is one thing but shouldn’t necessarily take priority when it comes to driving sales. Happy customers are potentially repeat-customer; encouraging further spend is one of the best ways to invest in the future of a business.

Unfortunately, customer loyalty programs have got a bad rap in recent years. Many customers don’t feel like their loyalty is rewarded and as if they are being used for data. Many companies, on the other hand, question whether loyalty programs are cost centres rather than a catalyst for repeat purchases, greater engagement, valuable feedback and brand building.

Is it really worth it?

In a word: yes.

According to Accenture, 55 per cent of consumers express loyalty by recommending the brands and companies they love to family and friends, and 43% per cent increase the level of business they do with the brands and companies they love.

Furthermore, members of loyalty programs generate between 12 and 18 per cent incremental revenue growth per year than non-members. (By improving the program’s structure, one could argue that this margin has the potential to increase significantly).

Furthermore, 82 per cent of satisfied customers will “likely” or “very likely” keep shopping with a company and give it another chance if something goes wrong.

Do’s and Don’ts of customer loyalty

Designing an effective customer loyalty program requires a great deal of trial and error, talking to customers and reading reviews. However, by following a few do’s and don’ts, its possible to crack the customer loyalty code sooner rather than later.

DO make it simple for customers to sign up
It may sound simplistic but make it easy and quick for customers to opt in to the loyalty program. Making them jump through too many hoops or taking too much time out of their busy lives increases the chance of losing them half-way through sign up. Every unnecessary step is an opportunity for them to change their mind.

Making it compulsory for people to sign up online via the website isn’t necessarily a great idea, either. Depending on the target demographic, many people aren’t confident online and prefer the phone. Never underestimate or forget the importance of human interaction.

DO offer a guarantee

People like to be reassured that there is no risk in signing up and if they don’t like what they receive, they can return it without charge. Let them know they can opt out at any time or within 30 or 90 days. If the opt-in seems risk-free and the offer seems attractive, it becomes a no-brainer for customers.

DO Introduce them to the scope and quality of the products

By giving repeat customers the full experience and opportunities to try new things each month, they are more likely to maintain interest. Especially in the wine industry, so many customer programs send out the same products month after month, year after year. It’s one thing to promote signature products, but customers can get bored with the same thing all the time.

DO ask for feedback

When customers receive new products and experiences to try, give them some time, then follow up asking for feedback. This increases engagement levels as well as brand familiarity. This plays a dual role in helping customers get to get better acquainted with what’s available and providing greater customer insight. Feedback and subsequent orders reveal personal tastes, preferences and the price bracket to which they are most receptive.

DO invest in technology
Ensure your understanding of and communication with customers is measured, systematic and professional. Leverage data-driven insights and customer segmentation to make informed engagement through targeted, omni-channel communications.

DO calculate how much a loyal customer is worth to you

Many Australian organisations consider customer loyalty to be less than 0.5% or 1% in rare cases of what customers spend. That’s just $10 when they spend $1,000 with your business. It doesn’t make sense. To really understand what it’s worth investing in loyal customers, track and put a monetary value to a number of categories – like annual spend, cost efficiencies, price sensitivity and word of mouth. Then, compare it to sales and marketing investment aimed at attracting new followers. If need be, by reducing the marketing budget on Google, Facebook, radio and other channels by 1-1.5%, it is easily possible to channel that back into promoting customer loyalty.

DON’T make it about The Points

This is probably the biggest failing of many loyalty schemes; customers are urged to join but either don’t get anything out of it or don’t understand what they can get out of it. What exactly is a point? Rewards need to be specific. Tangible enticements are key. One of the most crucial elements of rolling out a loyalty program is explaining what customer get out of it. What’s in it for them? Give them actual money off their next purchase or the ability to redeem the points to purchase more products. The more customers perceive that they get, the more they will spend.

DON’T limit the reward criteria to purchases-only

Regular customers offer more value than repeat business. Sometimes it’s worth offering incentives to them to do anything that provides greater business insight – like filling out a survey, leaving a review, watching a how-to video or downloading the new catalogue.

DON’T be complacent
Think of it as a work-in-progress and allow your program to evolve. Continually analyse buying products, regularly ask for feedback, identify trends, then recalibrate the program accordingly.

DON’T forget to differentiate between loyalty levels
Step it up a notch for unwavering customers. A VIP club or a tiered rewards system gives greater incentive for loyal customers to spend even more with you.


There are so many loyalty programs out there, the ones that stand out and demonstrate understanding and personalised engagement have the greatest competitive edge and drive the most success.