As many brands operating in New Zealand (e.g. Mercury, AA, One New Zealand and many others) know, a well-constructed, proprietary reward loyalty programme can serve up huge benefits for your bottom line, your brand and - importantly - your customers.

Historically, loyalty programmes were built as retention tools to maintain relationships with existing customers.

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Their primary purpose was to maximise the value of an individual customer, nurturing a relationship from the initial purchase to incentivise and promote more transactions over time. Fairly straight-forward stuff that still remains a core component of programmes today. If your marketing bucket leaks customers, it will be hard to fill!

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But times are a’changing. With the rise of the digital-first customer experience and new loyalty tech flooding the market, the opportunities and potential for outstanding, engaging customer experiences that engender loyalty towards your brand have grown wildly.

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Modern loyalty programmes are being crafted to hit multiple business and marketing objectives, with a move away from purely transactional models - where a brand recognises and rewards based only on customer purchases - to more holistic programmes, which incentivises broader behaviours that are deemed valuable to a company, beyond just getting the next short-term sale.

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A robust programme should be built upon, and ladder up to, your core business and marketing objectives. Here's a real-world example...In preparation for the move to a cookie-less world (speak to Google if you want to know more about that), and if you're looking to acquire zero-party data to inform more targeted comms, why not incentivise customers to share personal information in exchange for a reward? This reward could be from your brand stable or a partner reward that customers find valuable and appealing.

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Balancing customers' effort-reward trade-off is key to ensuring your programme (and request for more of their precious personal data) is well-received and therefore getting the results you need.

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However, acquiring ‘more’ customer data isn't the only advantage of running your ‘own’ reward loyalty programme. New technology and a progressive marketing mindset - to the role loyalty can play - have enabled an ever-broadening range of applications and tangible benefits.

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Here are some of the key benefits of running your ‘own’ reward loyalty programmes:

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• Retaining and rewarding your existing customers so they prefer and refer your brand. The need to retain your existing customers’ business still sits at the heart of loyalty programmes. This applies across your entire customer base but a loyalty programme allows you to target specific customer groups based on valuable information you’re gathering via the programme. For example, those who are about to churn/lapse or those who are more valuable based on sales data. Serving custom rewards to these distinct customers based on their behaviours or status will ensure you’re maximising the potential value of each and every customer, whilst keeping them happy.

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• Increasing customer lifetime value through a loyalty lifecycle of rewarding moments. Loyalty is always-on, but brands can use that to their advantage to ensure customers are valued at each stage, from the initial sign-up, to nurturing their early stage membership to creating reward milestone moments for things such as tenure, anniversaries and birthdays. Keeping customers within the loyalty programme will increase their overall value to the company.

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• Loyalty, and particularly rewards, add emotion into the equation. This enables you to create a point of differentiation versus competitors. Recognising customer behaviour with a reward strengthens their purchase decision, affirms their efforts, and develops a more emotional connection with your brand over the long term.

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• Developing new revenue challenges through monetised rewards and affiliate networks. Brands are tapping into wider marketing channels, such as affiliate networks, to ensure they are getting the best possible return from their loyalty programmes. Promoting things such as Cost Per Acquisition offers, where a brand will pay for each qualified customer you send their way, means brands can recoup and re-invest budget to further fund the upkeep of the programme.

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By tailoring the program to suit your specific business needs and customer preferences, you can create a unique and personalized experience that fosters loyalty and boosts customer retention. Moreover, having full control over the program allows you to gather valuable customer data and insights, enabling you to make informed business decisions and refine your marketing strategies.

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At Rapport Group, our team is experienced in developing and optimising loyalty programs that drive customer engagement and growth. If you're looking to develop a loyalty program for your business or want to optimise an existing one, we're here to help!

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Next in the series: The impact and role of rewards in loyalty programmes