Loyalty Program Launch Strategies

Creating a Winning Loyalty Program: Key Questions & Strategies I've always been passionate about creating loyalty programs for brands. It's a valuable way to connect with & learn from your customers while delivering concrete business results, especially as customer acquisition costs rise. Before implementing a program, my team and I spend significant time contemplating these essential questions: 1. Customer Value Proposition: Why would our customers want to join this program? How can it enhance our engagement and connection with them? 2. Business Impact: How will we measure this program's effect on customer retention, frequency, incrementality, and advocacy? What's the ROI? and what's a reasonable timeline for achieving this? 3. Management & Profitability: Who will oversee the program within the team? And ensure that we factor in all the costs, identify efficiencies, and drive profitability. 4. Best-Practices: What loyalty programs do we admire, and why? We examine our industry & other sectors. 5. Pilot Market: What market will we pilot in? Noting that programs don't work universally across the globe. It's essential to customize tiers, rewards, and consider currency, points liability, and robust fraud management as we scale. 6. Tech Stack Integration: Which loyalty program tech stack aligns with our current & future business needs & seamlessly integrates with our DTC ecosystem? 7. Data Collection: How does this program fit into our data collection initiatives? What consumer insights do we hope to gain clarity on? Next, it's important to think about how our customers earn rewards: 1. Spend: Customers can earn rewards by spending a total accumulated amount over time (drives LTV & can increase AOV) or by spending a certain amount today to receive specific rewards (to boost AOV). 2. Share: Earning rewards can also involve actions like writing a review (drives UGC & SEO), sharing personal data on their birthday (drives personalization), or referring a friend (helps with CAC). Finally, what are the customer benefits of the program: 1. Saving: Customers benefit from savings, which could be in the form of a specific dollar amount off or a percentage discount, along with GWPs etc. 2. Services: Benefits can also include free shipping, early access to new products or sales, free alterations, and more. 3. Experiences: Customers can get invited to in-person events, become part of a like-minded community, gain access to a personal stylist, or provide feedback on new products. For me, two loyalty program pillars are: transparency & commitment. When changes to the program are made, we communicate with care and provide ample notice. It's essential for our customers to feel genuinely valued by our brand. Trust can be earned but lost in a nano-second if we neglect the importance of maintaining a positive relationship with our customers. Thus, we focus on creating joy, and this helps ensure that our brand shines. #customerloyalty #valuecreation #brandlove

"Points for purchases" is killing your brand. That's what Phil C., CEO of Upzelo, told me during our recent Chew On This episode. And after seeing the data from 4,000+ brands, I believe him. Here's what's actually working in loyalty and retention → Phil's journey is fascinating. Before Upzelo, he built the world's largest fitness platform with a 1.45% churn rate. Now he's helping brands reimagine loyalty programs. What he taught us: While most DTC brands are still playing the points game, they're bleeding customer value and watching CAC skyrocket. Instead, here are 3 strategies to ensure your loyalty program brings value to your customers and your brand: 1. Stop Chasing Transactions Traditional approach: Points for purchases Modern approach: Reward customer success Phil shared how one UK brand connected health data to their loyalty program. Every workout became a reason to engage, not just every purchase. 2. Meet Customers in Real Life Your customers don't live inside your Shopify store. One of Phil's clients, a motorcycle gear company, built their entire program around Saturday group rides. The result? 3,500 new program members in 3 weeks. No email blasts. No ads. Just organic sharing between riders. 3. Measure Real Impact Drop these vanity metrics: - Program signups - Points earned - Reward redemptions Instead, track what drives growth: - Purchase frequency - Category adoption - Real-world sharing 4. Goal achievement At Obvi, we're already seeing the impact of this approach. When we shifted from points-based rewards to focusing on customer fitness goals and results, our retention impact transformed. The Big Revelation → The best loyalty programs don't feel like programs at all. They feel like a natural extension of why customers chose you in the first place. Want to build real loyalty in 2024? Stop trying to buy it with points.  Start earning it by helping customers succeed. Huge thanks to Phil Carr for sharing these insights from his work with over 4,000 brands. Want the full playbook? Check out our Chewonthis DTC episode where we break down: - Moving beyond transactional loyalty - Building retention through real-life connections - Measuring what actually drives growth

I’ve helped launch a few retail cannabis loyalty programs in my day, and, I have to say, I’ve learned quite a bit. Namely, that discounts DON’T make a loyalty program. Here’s how to actually create a loyalty program that truly engages and retains customers: ✨ Focus on the Customer Journey Design your program to encourage repeat visits. Aim to get customers back at least four times, after which they’re generally considered “loyal”. They’re more likely to refer their friends, try new products, and routinely check the website for deals. ✨ Communicate Value Train budtenders to highlight the overall benefits of the program. Make sure they can emphasize long-term rewards like exclusive access to new products rather than just immediate discounts. ✨ Balance Discounts and Sustainability Avoid excessive discounts that hurt your bottom line. Instead, offer tiered rewards that incentivize higher spending and promote larger basket sizes. The best loyalty programs prioritize saving points, not spending. ✨ Personalize with Data Use customer purchase data to tailor rewards and promotions. Personalized offers enhance satisfaction and increase repeat purchases. ✨ Leverage Key Events Use cannabis-specific events like 710 or 420 to boost program visibility and drive engagement. Plan SMS / App member specific campaigns around high-traffic periods to boost program conversion and further hype the upcoming event. ✨ Continuous Improvement Regularly — say, every six months or so— update your program based on feedback and sales data. Small adjustments keep the program fresh and customers appreciate the change. I love building out loyalty programs, and know how much they can change both retail sales and customer relationships when done correctly. Want to talk about what we do at HighDef Studio? Give me a follow and drop me a DM. I’d love to chat. #cannabismarketing #cannabisretailmarketing

Stop churning high-value customers. Segment your loyalty programs! You’ve worked hard to build a loyal customer base, but are you maximizing their value? If you're not segmenting your loyalty program, you're leaving money on the table. 💵 Based on the success of ‘000s of Appstle customers,  I truly believe personalization is key for customer engagement, retention, and loyalty! 📌 Here’s why I think segmenting your customers into loyalty based tiers is a game-changer: 1️⃣ Personalization drives engagement Generic rewards don’t cut it anymore. Infact, 56% of customers prefer highly personalized loyalty rewards. 👉 By segmenting your customers into distinct tiers based on key characteristics, you can offer rewards that matter to, and motivate them. The result? Higher engagement and increased CLTV! 2️⃣ Encourage more frequent purchases Everyone loves a challenge, and wants to be at the top! Tiered programs with distinctive benefits motivate customers to level up.  Studies show that customers in tiered programs spend 67% more than those without. 👉 As customers move through the tiers, their incentives grow—making them more likely to continue their relationship with your store. 3️⃣ Reward high-value customers Not all customers are the same. Some are your brand’s biggest advocates—your VIPs. With tiered programs, you can give your most valued customers, rewards that make them feel valued. 74% of consumers believe brand loyalty is about feeling understood and valued. 👉 Focus on your top spenders and offer tailored incentives that will keep them coming back. 4️⃣ Track & improve customer behavior With tiered loyalty programs, you gain a clear view of how different shopper segments behave. Are they more likely to shop during specific days and times? Are they influenced by certain promotions and benefits? 👉This data helps you optimize your strategy and maximize LTV over time. ✅Pro tip: The beauty of tiered programs? They incentivize behaviors! Offer perks that motivate customers to reach the next level, and you’ll have customers for life. ♾ Want to grow your Customer Lifetime Value? Segment, personalize, and reward! It’s how you create customer loyalty—and keep it. #Appstle #subscriptions #memberships #loyalty #bundles #customerretention #shopify #shopifyplus

🤔 Where would I start if I were tasked with launching or relaunching a loyalty program? I’d start by getting crystal clear on the business problem I’m trying to solve and then model out the ROI. Understanding the business problem is crucial—it sets the direction for the entire loyalty program and ensures that it aligns with your goals. From our research, three main factors underscore why this step is so important: 1️⃣ Pushback from Finance and Procurement The biggest pushback to loyalty programs often comes from finance and procurement teams. Loyalty programs, by their nature, offer value to customers, so they’re frequently viewed as cost centers. By using models and forecasts, you’re speaking the language of finance teams, making it easier to demonstrate potential value. 2️⃣ Competing for Resources and Executive Buy-In Prioritization of resources isn’t just a challenge for launching a loyalty program; it’s essential for maintaining executive buy-in over time. The budget for a loyalty program is often competing against various other projects that may have nothing to do with loyalty. Clear ROI projections help strengthen the case for continued investment. 3️⃣ Complexity vs. Simplicity of Modeling While modeling and forecasting can be complex, getting started can be simpler than it seems. For example, I recently spoke to an inspiring person in the solar panel industry (DN, you know who you are 😉) about the challenges they faced when launching a referral-based loyalty program. Industry data shows that the average cost per sale in commissions and direct costs to sales teams ranges from $2,500 to $7,500. Now, consider a goal of increasing gross margins with a referral program costing $1,000 per referral. Is this program worth implementing? The answer depends on various factors—and this is where modeling and forecasting come in. It’s tempting to assume that implementing a referral program is a no-brainer, especially with potential savings of $6,500 per sale. But this simplistic view overlooks other crucial elements, like the cost of focus, program management, and how the ROI compares to non-loyalty solutions such as advertising or cold outreach. 🔗 To help illustrate this, we’ve created a simple spreadsheet that you can check out here: https://lnkd.in/e2avYyaX This tool lets you model the potential ROI of a referral-based program and compare its cost savings and revenue impact to traditional commission-based sales methods. What would you change or add to the model?