4 Ways Retailers Can Design a Better Loyalty Program

Customer loyalty and mobile order-ahead programs are making big gains in retail. The siren call of stats that associate customer loyalty with greater revenue and profitability, combined with ubiquity of smartphones and native mobile apps, might make it seem like a sure thing for any retailer to launch a customer loyalty program.

However, for most brands, loyalty programs aren't a case of “if you build it, they will come.” Users are inundated with branded experiences, deal sites, meal-delivery services and other indirect competitors for the attention span of their customers. We’ve learned that good customer experience design is essential to give your loyalty program and mobile app the best chance for early success and ongoing momentum. Here are four points at which you can make or break your customer loyalty program:

1. Ensure your loyalty program reflects your brand.

This goes beyond the design mandatories of ensuring your application adheres to your brand’s visual identity. Customers must feel that your program reflects the values and experience they've come to expect in doing business with you and your employees. It is, in essence, an extension of your storefront.

Starbucks is an excellent example of a company that has done this well. The coffee chain has extended its incredibly consistent in-store experience to its mobile application and rewards program (and its latest mobile app redesign takes that to the next level). However, the same aesthetics and user interface treatments that are working in Starbucks’ favor might not be optimal for another brand. Each brand must make its own choices in extending its brand experience into its mobile app or loyalty program, considerate of its specific customers and their expectations.

2. Communicate a strong value proposition.

Customers do an intuitive cost/benefit analysis when they're considering whether it’s worthwhile to join a loyalty program. They evaluate the relative hassle of downloading the app, completing a form, creating yet another set of login credentials, and then remembering to use it.

In most cases, the average customer won’t just opt in for the sake of opting in; you must clearly define the value to convert them into a member. Why should they join? What’s in it for them? What will it take to join? What will it take to earn rewards? The answers to these questions need to be clearly communicated up front, simply and quickly. The value has to be compelling enough to move customers to action.

3. Focus on user experience.

The user experience needs to be seamless, fulfilling the expectations the customer has coming into the program. If your value proposition promises that the program will be easy to join and easy to earn rewards, then the experience needs to match that expectation from the very beginning.

Even the task of creating a user profile can become a stumbling block for customers. The goal is to get people signed up and engaged as quickly as possible so that you can communicate with them on an ongoing basis and move them deeper into your program. Minimize what you ask for at the beginning; every question you ask is another potential barrier to entry for the customer and could discourage them from joining your loyalty program. This is especially true on mobile devices, where users may be using just one finger to type every character required by your registration form.

4. Keep things simple.

So many companies have fallen prey to creating overly complicated loyalty programs in the name of offering a variety of rewards, introducing multitiered membership, or one of a myriad of business objectives. If customers are required to jump through hoops to reap the benefits of your program, they'll give up and join the ranks of the dreaded inactive users. Members need a clear understanding of how their behaviors translate to the rewards they’re earning. Ideally, you’re not just rewarding the behaviors your business wants to encourage, but also behaviors that are meaningful to your customers.

The perceived level of effort it takes to receive a reward is key to achieving a goal of simplicity. As you choose your currency — points, miles, dollars — you must be aware of what meaning those already have to your customers. For example, “points” are fairly nebulous in that every loyalty program seems to weigh them differently, whereas “dollars” would seem to equate to actual U.S. currency. The difference between having to spend $25 to receive a reward vs. earning 25 points to receive the same reward may be significant in the mind of customers, even if the spend-to-reward ratio is exactly the same.

User-Centered Design Drives a Better Experience and Greater Loyalty

By designing a compelling experience that reinforces your brand values, and creating a simple value proposition that delivers on its promises to customers, you'll drive early user engagement and give your loyalty program and mobile application the best chance to stand apart.

Jen Spofford is chief client officer at The Archer Group, a digital agency.