How to Monitor & Manage a Customer Loyalty Program

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  • 0:03 Customer Loyalty Programs
  • 1:20 Common Steps
  • 1:56 Customer Loyalty Software
  • 2:54 Example
  • 3:45 Managing Loyalty Programs
  • 4:20 Lesson Summary
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Lesson Transcript
Instructor: Amber Dixon

Amber works with graduate students enrolled in a virtual program and has a Master's of Social Work degree.

This lesson will explain how to manage a customer loyalty program. You'll also learn how to utilize software to monitor loyalty programs. Read on to find out more.

Customer Loyalty Programs

Customer loyalty programs reward repeat customers and help businesses increase bottom-line profitability from sales. These programs are also marketing tools to promote products and services to new and existing customers.

Software systems store valuable customer information that can lead to increasing customer engagement by contacting customers about sweepstakes, games, trivia, contests or polls. Customers who have not expressed prior interest in products or services may be enticed to investigate what a company has to offer when they are offered unique and memorable ways to get involved.

Additionally, customers are likely to increase purchase volume and frequency of purchase when enrolled in a loyalty program. Some of the most common loyalty programs include monetary-based and points-based. Monetary-based programs are financial rewards accrued after frequent visits or purchases. For example, a store offers customers a ten-dollar gift certificate for each three hundred dollars that are spent. Point-based programs reward customers for frequent purchases by allowing customers to accrue points that can be redeemed for rewards like a discount or a free item.

Common steps to managing a loyalty program include the following:

  • Clearly explain the benefits of the program to customers
  • Utilize loyalty programs to communicate regularly with customers
  • Send reward offers specific to customer demographics and interests
  • Ensure the ability to redeem rewards is within a reachable and realistic time frame
  • Continuously assess what is actually important to customers

Once customers earn points, they typically have to wait to redeem rewards at a next visit, which promotes the need for repeated visits.

Customer Loyalty Software

Customer loyalty software helps to monitor and manage customer loyalty programs that benefit the customer and company. Customers benefit from specialized software because they are able to register for the program, earn points, redeem points, and view accrued points.

Software collects demographic information on customers. Additionally, businesses can track customer spending patterns, which can be monitored to offer special promotions. The software can also help promote special events, holidays, and days of the week that are slower in sales.

Companies benefit by having the ability to collect information on customer purchases, track a history of transactions, and plan for marketing to target a population of customers. What's more, companies who utilize software can analyze customer information to plan for merchandising and store operations accordingly based on customer needs, patterns, and interests.

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