1) Simplicity – With the development of digitalization the expectations on customer experience have increased substantially and “effortless” is becoming a hygiene factor in the retail sector. To not impair the customer experience, the loyalty program needs to be permeated by simplicity – easy to join, easy to attain information, easy to utilize personal benefits, easy to steer how, when and what is relevant
2) Clarity – “What’s in it for me?” – If you cannot easily and clearly answer this question, there is a risk that the net membership base never grows. Some customers associate customer loyalty programs with spam e-mails and there must be a clear rational for why the customer should join yet another program
3) Engagement – Members do not get loyal by receiving a newsletter or a promotion code every now and then. A holistic experience and relevance are required to build commitment and make the customer want to continue to interact with the company. Rewards is a traditional approach, gamification and customized offerings are increasing, but also evaluate potential in partner collaborations to create a more dynamic membership while the costs are shared
4) Belonging – Emotional value is key to true loyalty. The bitter truth is that no customer will ever be 100% loyal, but credibility and trust will help on the way. Is the loyalty program offering in line with the company’s brand? Are there interactions and knowledge sharing among members? Does member information and customer experience permeate the whole company, in all interaction interfaces?
5) Profitability – Active members and a large customer base in all its glory, but make sure to have key metrics that can strengthen the profitability in loyalty programs and ensure ROI over time. To much “bought” loyalty risks a negative snowball effect that will decrease margins
