When businesses create Customer Loyalty Programs, it is essential that they have clarity on the goals they wish to achieve.

Once the goals are clear, it gets easier to find ways to achieve the target.

Also, it gives a measure to businesses to check the effectiveness of their loyalty programs.

One can test various programs in terms of their effectiveness in achieving the goals of the program, and choose the one that gives the best results.

Here are a few goals that add value to businesses when targeted through customer loyalty programs.

You can use some or all of them for your business, depending upon the nature of your business and as per other programs and processes you are already following.

Increased revenue

This goal is something every business has. This is one of the main reasons businesses have loyalty programs.

Revenue can be increased by having a set base of loyal customers, and by adding more customers to it.

Customers are not only retained for making repeat purchases or shunning competitors, but they are also encouraged to buy more frequently and to purchase larger baskets of goods.

Businesses can easily assess the revenue they get from repeat customers.

High customer retention rate

Repeat customers buy 67% more than new customers.

Therefore, it is essential to retain customers. Also, when a business has a set base of loyal customers, it is easy for the business to grow with time.

Otherwise, the marketing efforts of the business are repeatedly focussed on enrolling new customers.

Brand value

Customers should associate value delivery with your brand. A loyalty program can be a great way to achieve this.

When you create meaningful loyalty programs which are not superficial and deliver true value to customers, then your customers feel special and satisfied and hence become loyal to you.

Your rewards and customer engagement should be such that the customers receive some kind of monetary, emotional or psychological value.

This goal can be measured by assessing incoming referrals and positive feedback and social media response your business gets. There are many other ways to measure the achievement of this goal.

Reduced marketing cost

It costs five times less to retain a customer than to acquire a new one. With the help of sophisticated loyalty software, you can always send notifications and promotional messages to your loyal customers at almost no cost.

This is, by far, the easiest way to invite customers to your store or to do business with you. With loyalty programs, the main cost is the rewards that are given to customers, but since that is mostly associated with the purchase milestones achieved by customers, they are worth spending money on. Rewards ensure that you spend the marketing cost, only when the purchase is confirmed.

Reduce price sensitivity of customers

Customers are loyal to you because of reasons like quality of your products, rewards customers earn with you—points, cash back, etc., preferential treatment their receive with you, etc.

When they like such incentives, customers are ready to pay a higher price for your products even if competitors’ products are cheaper.


Resistance to competitors

You can create incentives—monetary, emotional or psychological—which ensure that your customers are immune to the offerings of your competitors and stay with you.

Cash backs, special services, reward points, ease of order, etc. are a few way to create resistance among customers towards your competitors.



Create a database to analyze customer behaviour

A database of loyal customers and their purchase behaviour can give a business great insight into what customers want and how they should conduct sales and operations to get optimal results.

Database is the most valuable thing a business can have, in today’s era. Loyal customers’ behaviour displays what products, services and rewards help retain customers, so that you can offer more of that.

You can pick goals which complement the nature of your business and make the most sense with the target market you have.

Customer loyalty programs must be created and implemented in businesses to ensure their sustenance in the long run. To ensure that the effort and money spent on loyalty programs is justified, businesses should have clear goals and targets to achieve for their loyalty programs.

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