How a loyalty program can transform your brand
Before we discuss how you can build loyalty for your brand, you may wonder: What does this look like in practice, and what benefits can I expect from a loyalty program?
In the following video, hear how Peyton Fox, CEO of SparkBridge Digital, helped Apotheke achieve a remarkable 10% click-through rate and sell 40% of their inventory within 24 hours.
Common elements of loyalty programs
Before we dive into how to set up your programming, get inspired by additional elements that you can weave into your strategy. Each one adds a new incentive for users to become loyal shoppers.
Gamification
Gamification means that you’ll turn the shopping experience into a game, motivating people to accrue shopping points, compete in challenges, or advance further towards a particular goal with each purchase. This makes the customer journey more interactive, enjoyable, and rewarding for loyal customers.
How gamification may look like for you:
- Points:
Let shoppers earn points with each purchase that can be redeemed on their next order. - Badges:
Award virtual badges once someone reaches a new milestone in their VIP journey (e.g., 10th purchase, 1st anniversary as a VIP shopper, or their share on social media). - Leaderboards:
Show off top shoppers with the most points, purchases, or badges to foster a sense of friendly competition among loyalty members. - Challenges:
Present customers with quests to complete, such as making a certain number of purchases before a deadline, referring friends, writing reviews, or engaging with social media content. Completing these challenges can unlock rewards or advance their status. - Tiers:
Incorporate different tiers that customers progress through as they engage more with the brand. Each tier can unlock a new, exclusive benefit (e.g., a prize or the opportunity to unlock higher rates for earning points).
Community
Aim to create a unique community of loyal shoppers. Host a space for them to engage with one another (e.g., a social media group or a community forum). Here you can share updates, lead online events, and encourage customers to lead discussions and ask questions.
This allows loyal shoppers to become active participants and help you build upon the foundational programming you’ve set up. The more connected someone feels to your brand, the higher their customer lifetime value becomes and the more likely they are to advocate for your brand and products.
Ways to engage your community:
- Encourage VIPs to post discussion topics or contribute to blog posts.
- Offer “Surprise and delight” opportunities, like spin-the-wheel games for discounts or unexpected gifts.
- Run contests within your community page to spur engagement.
- Re-share VIP videos and user-generated content to show you value their time.
Communication
Part of running a loyalty program involves shaping a story about the who, what, why, and how of your loyal community.
Share a narrative storyline that customers can follow within a welcome automation as soon as they join your community. Then, continue a regular cadence with VIPs via channels like email and text messages to immerse them in the world of your programming. This often comes in the form of an exclusive VIP newsletter. These loyal shoppers should feel an emotional connection to this community and stay in the loop on what's new and the value of staying engaged.
Moreover, your ongoing communication can include:
- Exclusive VIP-only coupon codes or sales.
- Early access to new products or seasonal sales.
- Latest updates within your community.
- Member spotlights, to keep people connected.
- Upcoming events or other community-building opportunities.
Steps to set up your loyalty program
Now that you understand the value and possible components of a loyalty program, it’s time to set the foundation for your own. Follow these steps to build your brand’s unique loyalty program.
Invest in a tool
To launch a great loyalty program, start by picking a tool that helps you create the experience you have in mind. Look for a system that can seamlessly integrate with your existing marketing toolset.
Note: Browse loyalty program platforms within Klaviyo’s tech partner directory.
When considering a loyalty program tool, think about its ability to:
- Manage diverse reward structures (e.g., points, badges, tiers, etc.).
- Sync data to your outside tools (e.g., to Klaviyo to power segments and flows).
- Provide comprehensive analytics and reporting.
- Offer ease of use and scalability.
- Fit into your loyalty program goals and budget.
Choosing the right loyalty program software is a strategic decision that directly impacts the effectiveness and longevity of your program. It’s an investment that pays dividends in increased customer retention, higher lifetime value, and stronger brand advocacy.
Develop VIP branding
Creating consistent VIP branding is a crucial step in establishing a successful loyalty program. This branding should be distinctive and appealing to your most valued customers, making them feel exclusive and appreciated.
Elements to create VIP branding:
- Name
Give your program a unique name that reflects exclusivity and prestige. For instance, Hazel Village’s program is called “Hazel Nuts,” while BWH Plant Co. has a loyalty program called “The Green Thumb Club.” - Logo and visuals
Design a unique logo and visual identity for your VIP program. This can involve a specific color palette, typography, or graphic elements that differentiate it from your general brand. - Voice
Building on your unique brand voice, add an extra appreciative tone to all communications related to your VIP program. Compared to your standard marketing messages, all VIP content should be more personalized, enthusiastic, and perhaps even a bit aspirational.
Refine your web presence
Feature a space on your website and social media to feature your VIP program. This may look like:
- A designated page on your website explaining your program, how to sign up, common FAQs, and a benefits breakdown.
- A special group on social media (e.g., a Facebook group) for members only.
- An app for your brand community members to shop and engage on.
Wherever you display information about your loyalty program, make sure to clearly articulate the benefits, privileges, and terms and conditions associated with being a VIP (e.g., early access to new products, discounts, personalized customer service, events, etc.)
Set up a loyalty program automation
To inform someone that they are about to reach VIP status or that they officially qualify to join your loyalty program, you should create a distinct automation to power this messaging. This automation, also called a flow in Klaviyo, will kick off as soon as someone has spent a certain amount of money or placed a certain number of orders with your brand. Then, you can begin sending them welcome messages using the channels they prefer (e.g., email, text, or even mobile push notifications).
What should go into your flow?
- A welcome message, introducing them to the program.
- A tangible first incentive to shop as a VIP, say a unique coupon code.
- An explanation of what’s to come in their journey as a VIP (how to engage further, what they can earn, what messages they can expect to receive over time).
- An opportunity to engage (e.g., links to your community forum if applicable, feedback form, survey, etc.)
Add VIP messages to your content calendar
Craft compelling messaging that emphasizes the value and exclusivity of the VIP program. Use language that makes members feel truly special and part of an elite group.
Things to consider when adding VIP messages to your content calendar:
- How often you will message (e.g., weekly, monthly, quarterly); keep this consistent.
- What content you will feature (e.g., sales, loyalty member highlights, advanced product drops).
- The goals you aim to drive with each message (e.g., increased revenue, customer referrals, new product adoption, etc.).
Spread the word
Once you’ve launched your VIP program, the next step is to communicate its existence and benefits to your full audience to boost participation. Okay, but… How can you do that?
Here are a few tips and tricks to spread the word about your loyalty program:
- Automations
Use your automation to alert people before they’ve hit the VIP spending threshold that they’re close to unlocking deeper benefits. - Campaigns
Promote your VIP program in campaigns to a wider audience of interested parties. You can even share blog posts written by members or featuring loyalty program benefits. - Forms
Display eye-catching banners and strategically timed pop-ups to capture the attention of repeat shoppers who might be interested in your program. - Social media
Announce your VIP program across all your active social media platforms (Facebook, Instagram, X, Pinterest, TikTok, etc.). Create engaging visuals and videos that showcase the benefits. Encourage sharing and tagging. - In-store signage (if applicable)
If you have physical retail locations, display attractive signage at the entrance, checkout counters, and within product displays. Train your staff to inform customers about the program and the benefits of joining. - Packaging inserts
Include small, branded inserts in your product packaging that explain the VIP program and direct customers to where they can learn more or sign up. - Affiliate and referral marketing
Offer referrals to members who get another customer to join the loyalty program. You can even collaborate with relevant influencers or offer commission to affiliates who align with your brand values. These people can cast a wide net online to like-minded shoppers, driving awareness and sign-ups.