5 Steps to Ensure the Success of Your Frequent Buyer Program

Acquiring new customers can be expensive.  There are multiple studies that confirm customer acquisition costs can be up to five times more expensive than retaining an existing customer. So, the question is, how can you retain customers while positioning your brand on top of your customers’ minds?

Loyalty programs are an effective way to increase the size of your marketing database and increase customer lifetime value.  Before starting a loyalty program, it is crucial to review your existing Key performance indicators like customer acquisition costs, lifetime value, and repeat purchases to determine if a loyalty program is right for your business.

Once you´ve done the leg work to validate if for your market a loyalty program is the way to go, here are the five steps to creating a frequent buyer program with bLoyal.  Let’s get started!


1) Analyze your existing customers purchasing history data.

Really understanding what your customers are buying and the type of promotions that drive them is key to plan your program’s strategy. You want your rewards strategy to be the trigger that leads to up-selling and to increase your customers’ lifetime value.

Having your customer and sales transaction data easily accessible is going to help you answer the following questions:

  1. How does an average customer buy in a year in terms of units per ticket, recurrence, and average ticket value?
  2. What are my top-selling products? Are these the same all year long?
  3. Can we upsell them?
  4. What type of promotions work better? (Direct Discount, volume discount, BOGO, coupons)

Answering these questions will enable you to construct the framework of your loyalty program.  What products and rewards should you be offering to incentivize repeat purchases?

2) Contact your manufacturers/suppliers!

Many manufacturers offer incentives for brand-specific promotions.  According to the Aberdeen Group, rebate and incentives programs give manufacturers a competitive advantage.  They can use these deals to push their brand to the top of the customer’s mind.    Contact your own suppliers and manufacturers that already have any existing incentive programs or are interested in creating one. This can be mutually beneficial for both parties and could make your program even more attractive for customers!

3) Automate the Process

Find software that is integrated to your existing eCommerce cart and point of sale system to operate the program.  Marketing programs are only as good as their execution and return on investment. Don’t spend unnecessary time administering your program, instead, multi-channel loyalty programs like bLoyal can track purchases across your sales channels and automatically reward your customers.  Our software will also track your promotional usage and email your manufactures reports for rebates so that you are not fronting the bill.

4) Market The program.

For your program to really kick-off, it´s going to be key to communicate to your customers everything there is to know on your program! From where to sign up, to the rewards model, and other special surprises. You want them to be as excited as you about this new project! With bLoyal you can also create automated engagement triggers with emails and text messages to keep their interest, and you can differentiate these triggers depending on where they are on their customer journey.

5) Review your KPIs.

The one thing we should always do as marketers are to measure the success of our strategies! But don’t worry, we won’t leave you hanging, here is a list of the KPIs recommend measuring to ensure the success of your program:

Determine how effective your loyalty programs are with attracting new customers versus keeping the ones they already have:

  • Customer Retention Rate (CRR): [(Customers at the end of the period-New Customers)/Initial Customers] x 100

To determine who are your most enthusiastic loyal members and which types of rewards are redeemed the most:

  • Redemption Rate (RR): Total Points Spent/Total points Issued

Measure the value your customers have brought to your brand, and predict their future value:

  • Customer Lifetime Value (CLV): (Average Transactions Per Month x Average Order Value x Average Gross Margin x Average Customer Lifespan) / Clients Per Period

Contact us today if you’re ready to build a loyalty program that keeps your customers engaged and coming back for more!