Loyalty and Retention

Top 6 Points to Consider Before Creating a Loyalty Program

February 15, 2020
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Are you familiar with loyalty marketing? It's been around for centuries.

Better yet, have you considered creating a loyalty program for your business? Weighed the investments needed to create one?

Well, today we are talking about the top points to consider if you want to create a loyalty program for to entice, engage, and build a relationship with your customers.

Defining Success for Loyalty Programs

Before creating your loyalty program, you first need to define what success is and what it means to you. This will help you measure the impact of your efforts and determine if certain loyalty campaigns were successful or not.

Success is a flexible word. What you define as successful might not be so for someone else. Getting a 90% pass on your English test is a success for you but someone else might be targeting a 99% or 100% grade.

When it comes to rewards programs, however, success depends on several factors and metrics. For example, measuring the success of your loyalty program includes reviewing your customer return rate and your redemption rate, among others.

A successful customer loyalty and rewards program is one that avoids the common loyalty program mistakes.

Read: 12 Best Loyalty Programs: A List for Inspiration

Your choice of rewards depends on analyzing what your business has to offer in the first place along with what motivates your customers to buy from you.

Your customers need to see a value in your loyalty program so that they would want to participate in it and become your retained customers.

To make this analysis, here are 5 aspects to consider before creating your loyalty program.

Points to Consider Before Creating a Loyalty Program

1. Ask Customer-Oriented Questions

Who are your customers? And what do they want? What decisions do they have to make to buy from you? Are you selling to individuals, that is business-to-consumer (B2C) or are you selling to other businesses (B2B)?

With B2B customers, who are you talking to? What reward benefits them as a business?

On the other hand, with B2C, your customers are responsible for their individual decisions, so giving them discount cards or special action-based points could be a strong motivator for them to use your services over and over.

2. Motivate Your Customers

It’s important to analyze and test what motivates your customers to buy from you or keep returning for your services.

According to research by VirtualIncentives.com, 75% of consumers prefer a company or brand that offers incentives, while 69% prefer a company that delivers personalized messages or rewards.

So how can you get this data? Creating online surveys, polls, and focus groups are good methods to understand and get to know your customers and their needs.

Read: These 12 Industries Get the Best Results with Loyalty Programs

3. Identify Your Business Goals

Your choice of rewards will affect how your customers and users interact with your products and services, which eventually impacts your profits.

So before choosing the rewards program you’re going to offer, you need to decide what your business goals are.

A loyalty program can achieve several goals at once, like creating customer retention and increasing customer lifetime value, but these achievements or targets need to be defined from the start. This will help you measure the impact of the program later on.

Let’s say your target is increasing brand loyalty. You’ll need to offer rewards that support this goal, like free upgrades to your users.

Dropbox, a cloud-based file storage service, offers its customers extra free storage when they refer other users who translate into conversions for the company.

On the other hand, if your intention is to increase customer acquisition, your rewards program will need to offer sign-up incentives to potential customers like a free trial, a free e-book or report, or you can offer a 50% discount on a user’s first month if they are referred by a current customer.

4. What Do Purchases Look Like?

What is your definition of a purchase? Is it a monthly, quarterly, or annual renewal of a subscription or service? Is it a product that people buy from your online store or e-commerce website?

For many companies, a reward can simply be a discount on a service or product or points that can be used later on within your online – or even offline store.

This allows you, as a business, to keep your customers in-house and encourage them to use your benefits to buy more from you.

5. Loyalty Program Resources

When creating a loyalty program, it’s important to remember the resources involved. Meaning, does it require human resources?

People who will contribute to your loyalty program, like sales and marketing teams, development teams, or others, and how much time do they need to allocate to fulfill your customer’s rewards.

Read: 10 Strategies to Grow Customer Engagement and Loyalty in E-Commerce

If you don’t have the necessary resources needed, you can put everything online and create an automated rewards system, something we highly encourage at Gameball.

Online, you can use in-app credit or a points system, coupon codes, or digital gift cards.

Moreover, offering a rewards program will involve a small financial investment, something you will also need to consider when creating a loyalty program.

6. Decide which type of rewards program you'll use

Another important point to consider is which type of loyalty program you'll be using. Is it going to be a simple loyalty-points-based rewards program? Is it a tiered loyalty program? Is it going to be a paid loyalty program? A combination of two or more types?

These are important to questions to ask and answer. The size of your business may determine which type of rewards program you start with. As your business grow, you may want to upgrade or revamp your rewards offering to satisfy your loyal customers.

For example, many e-commerce businesses start with a point-based program and then expand to a tiered-based program to create a community around their rewards program. Some examples of tiered loyalty programs include Sephora, Marriott Hotels, and Ulta's rewards program.


At Gameball, we provide store owners with fully-digitized customer loyalty and rewards programs.

This way your marketing, sales, and business development teams don't have to worry about how they'll be creating a loyalty program for your business or store.


This saves you hundreds and thousands of dollars, while connecting your website and mobile app(s) to include your loyalty program(s).

Check out Gameball's services to drive engagement, increase loyalty and boost CLV among your customers.

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