How to design a loyalty program in 10 mins

A loyalty program is key to a thriving business! And in case you didn’t know this: 88% of businesses with loyalty programs are more profitable than those without (Deloitte survey).

Yet we run away from running a loyalty program for our business. Why?

People get scared with the time and effort required.

Ask most people and they will tell you that structuring a loyalty program is a complex exercise. Something that’ll take hours if not days of brainstorming to design.

We know most business owners don’t have hours, forget days to spare from their hectic day to day schedules. So here is a guide to help you design a loyalty program in just 10 minutes. Yes, that’s all it takes!

Here’s the step by step process:

1. Choose a visit or spend based model

Types of loyalty programsVisit based models are recommended when you have a quick customer turnaround time and most customers usually spend the same amount. Usually restaurants or gyms.

Spend based models are required when customer spend are very diverse, like at a retail store 1 customer can spend 50,000 whereas others could spend 1,000.

 

2. Decide return back to the customer

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Depending on the business, the return to the customer can be between 1 to 20%. This usually depends on your margins and what the customer will value.

Our recommendations-

  • Restaurants: 10%
  • Retail/ Gyms: 5%
  • Supermarkets: 2%

 

3. Create a structure

Using the model and the return back to the customer, we can create a structure for the loyalty program. It will look something like this-

Types of loyalty programs

 Download the structure here

First we define the rule to collect points:

  • Earn 5 points for every visit (if visit based)
  • Get 5 points for every 100rs spent (if 5% return)
  • Get 10 points for every 100rs spent (if 10% return)
  • Get 2 points for every 100rs spent (if 2% return)

Now just fill up the structure by extending the rule.

Note:- If you’re using the visit based model, use the avg. purchase value per person to calculate the amount spent. An approximate is enough. (A sample is available in this sheet)

 

4. Add rewards by filling in the blanks

Now we make creating rewards as simple as filling in the blanks!

Just pick up your menu or store catalogue and add different items or vouchers at the different “points earned” spots, where-in 1 point = 1rs.

Rewards - Loyalty Program Template

We’ve created different sample rewards for gyms, restaurants, optical & fashion stores which are available in the downloadable sheet. Along with that, the ready to go template is also available so give it a shot & try it out yourself.

Download the loyalty program template

If you want to know how to come up with more creative rewards, just subscribe to our blog below and we’ll notify you as soon as our article on designing creative rewards is out.

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