What Makes an Effective Loyalty Program?

MOLPay’s collaboration with BCARD provides you with the above essentials of providing an effective Loyalty Program. While you can try to develop your own loyalty system, you should keep in mind that there is no extra cost in joining us.

With more than 2 Million members and 80 participating merchants' outlets throughout Malaysia i.e. Starbucks, Caltex, Chatime, Borders, 7-Eleven, Lazada, Zalora, UMobile and many more. BCARD's unique features that enables the collection and redemption of BPoints for online purchases is considered one of the largest loyalty program in the region.

Across the globe, loyalty programs are branded as a natural way for business owners to get closer to their customers, especially the loyal ones.

Note: the concept of a loyal customer varies from business to business. One may reward customers based on how much they spend or how many times they visited the business.

How does loyalty program effectively bridges customers with business owners?

Building an effective loyalty program is not easy, it needs a perfect blend of research, analysis, and marketing effort. Based on a key research from mintel.com , “60% of loyalty memberships go inactive within the first year”. This allows less than half to survive and by then we can somewhat effective loyalty program.

Let’s now focus on defining how loyalty program can really work for your business..

1. Simple Point System

This is the conventional method of a loyalty program: Make a purchase; earn points that translate to some type of rewards.

Now, the problem lies in how easy customers can redeem their earned points. Many businesses develop a complex and rather confusing relationship between points and tangible rewards (i.e. Thirteen points equal one dollar and five dollar equals 30% discount on your third purchase).

I may exaggerate my examples, but the fact that customers will respond better with simple rewards system differentiates an effective and an ineffective reward system.

2. Tiered Point System

This is where the term loyal customer gets its part.

One of the most challenging factors of a loyalty system is “How to find the balance between attainable and desirable award”. Tiered loyalty program helps businesses explore the right balance.

“Effective loyalty system gives small rewards for participation and higher rewards as customers turn into loyal customers.”

This benefits business owners by identifying and rewarding their loyal customers while keeping the cost low for the non-loyal customers.

 3. Diversity

Many successful loyalty system works with more than a couple of businesses to reach its maximum potential (with potential here meaning market).

It’s a common sense for a customer, such as myself, to long for a loyalty system that works along with number of businesses. Obviously, I want my spending to be collected as a single point system. Thus, loyalty system that includes large number of businesses will get an edge in capturing customers.

 4. Exclusivity

It gets tricky here... Great loyalty system can juggle between the number of business they are acquainted with and the target market of those businesses. This creates a sync balanced between the quantity and quality of their affiliated business.

“I would stress again that building a loyalty system is not easy and it may cost a fortune if not done properly. Thus, I would suggest an external loyalty system that has the experience and knowledge to understand the market.”