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How to create a Customer Loyalty Programme

Did you know that 65% of a company’s sales are found to come from returning customers? And, also, that increasing customer retention rates by as little… View Article


How to create a Customer Loyalty Programme

Did you know that 65% of a company’s sales are found to come from returning customers? And, also, that increasing customer retention rates by as little as 5% was shown to increase profits from 25% to 95%?

If the majority of your business’ sales are coming from existing customers, and you can increase profits by as much as 70% by focusing on retaining, and nurturing, as many existing customers as possible, you should create schemes, programmes, campaigns, offers, and incentives that reward your most loyal customers for coming for more. This is where a ‘customer loyalty programme’ comes in.

A customer loyalty programme is a marketing strategy that helps brands retain customers, and encourage them to spend, or engage more with your business. If you want to supercharge your foot traffic, organic traffic, and sales, you’ll have to give existing customers a reason to shop with you. Here are top tips for creating your own loyalty programme.

1. Find Customer Loyalty Software  

We’ll keep this bit short and sweet. You can create a customer loyalty programme by following a few simple steps. All you need to do is find a customer loyalty software. Once you’re set up, you’ll have instant access to:

  • Customer purchase history
  • Activating loyalty programmes instantly
  • Customer feedback
  • Customer segmentation
  • Pre-built templates for emails, forms and landing pages
  • And, much more.

2. Decide Which Type of Customer Loyalty Programme You Will Create

Customer loyalty programmes can come in different shapes and sizes. Some may be a perfect fit for your business, depending on the size and scale of your business, and your customer base. Some, however, might not be. Here’s few different options for you to choose from:

  • Point-based programmes: This involves customers performing an activity (like buying a jumper), and gaining points for their purchase. After a customer has accumulated enough points, they can redeem their points and use them to purchase something else from your business. Customers can track how many points they have through an app, or a loyalty card.
  • Tier-based programmes: This is incredibly similar to a point-based system with one small difference. Whenever a customer gains enough points, they enter a new ‘tier’ or ‘level’ and they will continue to enter new loyalty tiers as they earn more points. Each tier comes with its own sets of rewards, perks, and benefits. The more you spend, the more you earn, the greater rewards you receive.
  • Subscription programmes: Customers can sign up to ‘subscriptions’ which makes this a ‘paid loyalty programme’ (rather than a programme which rewards purchases). Customers will subscribe and pay an upfront fee, whether that be monthly, quarterly, semi-annually, or annually, and receive rewards for their subscription. These rewards can be discounts on their regular purchases, free postage and packaging, or even free gifts.
  • Free perks programmes: These programmes reward customers with free perks, gifts, discounts, and more. It’s important to not always reward customers who have recently bought something. It can be a huge incentive for your customers to visit your store, or your website, if you reward them for just being a customer. These can be based on the amount purchased from a business by a customer, or how frequently the customer uses your business. Or, you can even offer free perks to new customers as an incentive for them to shop with your business. For example, do your customers have a birthday coming up? Why not offer them 15% off their next purchase?
  • Refer-a-friend (referral) programmes: This type of loyalty programme encourages customers to share and promote a brand they use, to people they know. Customerswill then receive rewards in the form of gift cards, points, or discounts. You can even reward new customers, who were referred, with similar perks as an incentive to become a new customer.

3. Optimise Your Loyalty Scheme for Success

Once you’ve chosen which type of programme you want to create and offer to your customers, you’ll need to focus on how to get the most out of it. You can’t simply create one and hope for the best. It’s going to require a little optimisation before you really start seeing some positive results.

Establish a reason ‘why’ customers should use it

You need to give people a reason to use your loyalty scheme. It’s obvious, but it needs to be said. Your scheme needs to be easy to use, and easy to understand. Customers should be able to access it anywhere and see how many points they have, how much they can buy with those points, and what offers you have available. Your rewards, benefits, and incentives should also be enticing enough to give people a reason. Offering 2% off someone’s next purchase is not a reason for someone to come back. You need to do more. Make your offers irresistible so they’ll have to come back.

Offer multiple different benefits

Different people like different things. One size, in the case of customer loyalty programmes, does not fit all. And, you’ll have to provide different options to your customers based on their preferences. Maybe your customers prefer: free gifts with every purchase, exclusive access to any promotions you’re running, discount codes, or even donating 10% of the profit you make on every purchase to a designated charity. The possibilities here are endless. If you want some more ideas, use your customers. Ask your sales team to ask anyone making a purchase what they would like to see more of when it comes to offers and rewards.

Personalise your rewards

Customers love it when they feel they’re being noticed, acknowledged, and listened to. How can you do this? Personalise your rewards. You can do this quite easily by utilising customer data you collect from your point-of-sale system. Whenever your customer makes a purchase, leaves something in their basket (assuming your point-of-sale system integrates with your eCommerce site), or leaves a review or feedback, you can leverage this behavioural data to create ‘customer segments’. You can then create email marketing campaigns based on the customer segments you have. This will allow you to send loyalty emails using pre-assembled templates to offer personalised rewards and benefits to your customers.

Are you unsure how you can leverage customer data? Are you even sure if your current point-of-sale system is capable of collecting this data? Lightspeed Retail’s Advanced Reporting allows you to to make smarter business decisions by allowing you to access sophisticated reporting and analytics that shed light on everything from inventory and sales, to customers and staff. Leverage customer behavioural data today and offer your customers everything they could ever want, and more, with Lightspeed Marketing and Loyalty.


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