Building a Successful Customer Loyalty Program

Take a quick look at your wallet, keychain, or even your smartphone, and you’ll notice that those bar-coded cards, key fobs and mobile apps for your supermarket, drug store, and favorite coffee shop all take up a lot of real estate. Customer loyalty programs have become an increasing important element of building repeat business. While no customer loyalty program can be successful on its own without superior service and a quality product, building a loyalty program that engages and excites customers creates a much higher chance of business success.

At my business, the Bavarian Inn Lodge, we developed the Bavarian Inn “Perks Club” as a thank-you to our returning guests for making our business part of their family tradition, and as an invitation to future loyal customers. The Perks Club, with more than 26,000 members, is one of the largest such programs at an independent resort in the U.S. hospitality industry. The program offers earned points and bonus awards based on dollars spent at Bavarian Inn Lodge and Restaurant properties, year-round members-only discounts and special promotions, reduced lodging rates on select dates, and complimentary birthday dinners. We recently added an online platform, offering members quick and easy access to points earned via their computer or mobile device.

When we set out to create the “Perks Club,” we looked at several key success factors that we implemented to build the program, which I’d like to share with you.

Keep it simple

The easier your loyalty program is to understand, the more successful it will be. Customers should be able to engage or register with your loyalty program and understand what their status is in under a minute. Just recently, Plenti, the loyalty program of American Express, announced it is ending the program in July. Industry experts weren’t completely surprised. “They were challenged in that there was always some confusion on how the program worked,” said one observer. “Most specifically on how it operated with brands that already had a loyalty program.”

Structure rewards carefully

Build a program that not only entices customers, but also offers rewards that are reasonably attainable. Make sure your rewards are what your customers want and will be encouraged to work toward, Be certain that customers can earn rewards in a simple and realistic manner that doesn’t negatively affect your business.

Go digital

Though it’s possible to run a basic loyalty program by using punch cards (yes, they’re still out there), your customers are ready and able to engage with their laptops and smartphones. There are a lot of options available, including using social media to share loyalty club news, and offer special promotions.

Keep the program fresh

Keeping the program fresh refers to the program itself and in the minds of your customers. Update your rewards and specials regularly to keep customers active. For instance, you could offer double points to customers who refer their friends to your business or offer extra points to club members who like your business on social media platforms.

When used correctly, and combined with excellent products and service, customer loyalty programs are an extremely useful addition to your marketing toolbox. We love seeing our return customers year after year. Some we get to know so well that seeing them is like greeting an old friend or family member. By offering guests a rewards program, we build both a family of happy customers, as well as a successful business.

Judy Zehnder Keller is president of the Bavarian Inn Lodge and Convention Center in Frankenmuth, Michigan. Nestled along the Cass River in one of Michigan’s top tourist locations – Frankenmuth – the Lodge has 360 European-themed guest rooms, including whirlpool and family suites, four indoor pools, three whirlpools, two water slides, a miniature golf course, two gift shops, two lounges and two restaurants — all under one roof. In addition to being president of the lodge, Judy is also president of the Frankenmuth Cheese Haus and the Frankenmuth Gift Shop. She is recognized statewide for her leadership in promoting tourism in Michigan.


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