Your customer loyalty program can boost profitability by getting customers to come back and spend more money as frequently as possible, and when done right, encourage them to bring their friends and family with them.
But we see so many customer loyalty programs fail because the brand puts all this work into setting it up, only to try and let it run on autopilot. Active loyalty program management is non-negotiable if you’re trying to maximize your loyalty program ROI.
From ongoing engagement efforts to analytic tracking and customer feedback, a loyalty program manager can ensure your program is continuously moving in the right direction.
We’ll share tips on customer loyalty management below, but just know this - it’s easy when you set yourself up for success with the right Shopify loyalty program from the start.
Rivo connects to your back-end so you can not only build an on-brand loyalty program but optimize it by managing customers, adjusting settings, and accessing metrics, analytics, and reports to guide your decision-making. Get a demo today to learn more.
What is Loyalty Program Management?
Let’s be clear about what we mean when referring to loyalty program management. This is exactly what it sounds like - the ongoing process of designing, implementing, and optimizing a rewards system that keeps customers engaged and drives repeat business.
So much emphasis is placed on launching the loyalty program and figuring out how to reward loyal customers. But it’s not uncommon to see a drop-off in performance after the initial surge in activity.
This is because brands simply hope for the best rather than actively overseeing and strategizing the program. Real-time adjustments are essential for continuing to deliver customer value, and in turn, seeing consistent engagement. Here’s what goes into managing a loyalty program:
- Defining goals: Is the program designed to boost retention, increase average order value (AOV), or encourage referrals? There’s no right or wrong answer, but you need some idea of what you’re striving towards.
- Structuring the program: Choosing the right format (points-based, tiered, VIP, or subscription) and setting clear earning and redemption rules.
- Optimizing rewards: Aligning incentives with customer behaviors and delivering perceived value.
- Driving participation: Promoting the program through email, social media, in-store experiences, and personalized marketing.
- Tracking performance: Analyzing redemption rates, churn, customer lifetime value (LTV), and engagement to refine strategies over time.
It’s easy to want to put your program on the back burner once it’s running and hope that it continues delivering an ROI. But the truth is, even Rivo loyalty programs - the most intuitive, automated approach to building loyalty into your brand - need some semblance of oversight.
Should You Hire a Loyalty Program Manager?
There’s a lot that goes into customer loyalty management, and you probably have plenty of other responsibilities on your plate. Does it make sense to outsource this task to an agency or hire a dedicated loyalty program manager? Sometimes, yes. In other cases, it’s unnecessary.
Some loyalty programs can be complex, and you might not be able to juggle multiple reward tiers, VIP perks, or experiential benefits while actively tracking performance, fine-tuning incentives, and managing promotions - in addition to wearing other hats within the brand.
If your team is spread too thin, then yes, hiring a loyalty program manager might make sense. There are other scenarios where you might consider it as well, like if you’re struggling with engagement or you want to scale your program even higher.
Most of the time, though, automated loyalty programs like Rivo do the heavy lifting for you, so the actual workload is much lower. It’s typically far more cost-effective to invest in the right software than to budget for a loyalty program manager.
You can let Rivo handle the mechanics: tracking points, issuing rewards, integrating with Shopify, and generating reports. You or a member of your team can then bring the human strategy element into the program.
Whatever approach you take, it’s just important that someone is managing your loyalty program once it’s off the ground and running. We’ll share some tips on loyalty program management below so you can get a better sense of your responsibilities.
Best Practices for Loyalty Program Management
So how do you make sure your loyalty program thrives in the long run and becomes a profitable growth-driver for your business? We know you came here to learn about customer loyalty management, but we actually want to take a step back - because it starts with the foundation.
It Starts With the Foundation of Your Loyalty Program
The most common mistake brands make is rolling out a program without clearly defining objectives, rewards, and success metrics. This is like heading out for a road trip to a new destination without your GPS. Start by defining goals, which may be:
- Increasing repeat purchases (higher customer retention rate)
- Boosting average order value (AOV)
- Encouraging brand advocacy through referrals or UGC
- Enhancing customer lifetime value (LTV)
- Reducing churn by improving engagement
The reason we recommend narrowing to one of these goals is each can be tied to specific customer retention KPIs, allowing for more clear progress tracking down the line. From there, it’s just a matter of choosing a program model that supports your goals.
Points-based programs are the simplest and most common. Customers earn points per purchase or action, redeemable for rewards like free shipping, dollar amount off an order, or a free gift.
Tiered loyalty programs have their place as well for customers higher up the loyalty ladder who want to earn better benefits for continued participation. You can find some of these customer loyalty examples in our blog.
But, subscription-based loyalty programs have their place for encouraging ongoing participation as well. Some customers are willing to pay extra to get exclusive perks.
Choosing the right model depends on your brand’s industry, customer behavior, and retention goals. You might find it makes sense to build out a couple of different branches to your program.
Creating a Seamless Onboarding Process
A frictionless onboarding process can make or break your program’s success. A loyalty program manager will need to analyze this from 360 degrees to look for anything that could deter customers from participating. Here are some tips to streamline things:
- Simplify sign-up: The easier it is to sign up, the more engagement you’ll see. Capture just essential details (name, email, birthday). Don’t make customers jump through hoops.
- Enable one-click registration: Let customers sign up using Google, Apple, or Shopify accounts.
- Showcase value upfront: Make sure customers know what they get immediately. For example, you could offer 100 points just for signing up, or 10% off the next purchase.
You can follow up the initial sign-up process with an onboarding email explaining the program in more detail and offering next steps - like leaving a review, placing an order, referring a friend, etc.
Optimizing Loyalty Incentives to Maximize Results
This is where most of your loyalty program management efforts should be spent - continuously finding ways to reward customer loyalty. Not all rewards drive the same level of motivation, and it’s up to you to figure out what moves the needle and what is holding your program back.
This is why spending some time on brand loyalty segmentation is so important - different customers are motivated by different incentives. You should offer a mix of:
- Monetary rewards (discounts, free shipping)
- Experiential rewards (early access, VIP events)
- Product-based perks (exclusive items, free samples)
- Charitable donations (let customers donate points to a cause)
The goal is to offer something for everyone and keep the program fresh and engaging for different types of shoppers. You might need to adjust earning and redemption rates as well if you’re not seeing the engagement you’d like.
For instance, customers are going to lose interest and won’t participate if the rewards feel unattainable. This could mean you’re not offering enough points per action or setting the redemption threshold too high.
One tactic we’ve seen work well is running double-point days or limited-time boosts if engagement is low. This is a great alternative to traditional sales-based promotions for growing your revenue while protecting profits, too.
It’s important that you have a balance of short and long-term rewards. This gives customers a reason to start taking advantage of the program and something to keep coming back for. This may be a $5 reward for a first purchase, and a free product after spending $500, for instance.
Continuing to Keep Engagement High
The whole point of customer loyalty management is to prevent stagnation. Customers may sign up but won’t interact again simply because they forget about the program. It’s up to you as the loyalty program manager to stay top of mind with effective, personalized promotions:
- Birthday rewards: “Happy Birthday! Enjoy a free gift just for you.”
- Anniversary rewards: “You’ve been with us one year! Here’s $10 off.”
- Behavior-based offers: “Haven’t shopped in a while? Earn double points on your next order!”
We’ll talk more about cohesiveness across channels below, but just know that you should be integrating the program across marketing efforts. This could include adding customer point balances in emails, or sending SMS reminders for expiring rewards.
One other thing to keep in mind for optimal loyalty program management is that earning points shouldn’t require a purchase. You should reward other interactions that show loyalty as well, like social media engagement, reviews, referrals, etc.
Prioritizing Cohesive Touchpoints Across All Channels
You probably have customers who shop on both desktop and mobile, and encountering different experiences on each can create friction and confusion. Loyalty perks should be easy to track and redeem on both fronts.
If you have a mobile app for your brand, use in-app notifications to remind customers about rewards while they browse. You can also show available rewards at checkout to increase redemptions.
Tracking Analytics to Make Improvements
A lot of your focus on customer loyalty management is going to be spent digging into customer loyalty analytics to uncover bottlenecks and find opportunities. Without this data your decision-making is more of a guessing game. Here’s what you need to track:
- Customer Retention Rate: Are loyalty members shopping more often? They better be, or the program isn’t serving its primary purpose!
- Redemption Rate: Are customers using their points, or are they disengaging? There could be too much friction in the redemption process, or rewards aren’t enticing.
- AOV for Loyalty Members vs Non-Members: Is the program increasing spend? If not, what can you do to change that?
- Churn Rate: Are members leaving the program? Why? An exit survey can help you prevent this going forward.
The techniques for improving the performance of your loyalty program are fairly simple. If redemption rates are low you probably need to adjust point values or reward tiers.
You can replace underused rewards with something more enticing, too. Test new engagement tactics, like surprise gifts or exclusive experiences, if you’re struggling with churn. Platforms like Rivo simplify loyalty analytics so you can effortlessly track performance and make changes.
Leveraging Feedback From Your Most Loyal Customers
There’s one final thing to take note of on customer loyalty program management - data doesn’t just have to come through an analytics platform. Feedback from your customers can be the easiest way to make meaningful changes that move the needle. These customers know best:
- What keeps them engaged and what doesn’t.
- Which rewards are exciting vs. underwhelming.
- What frustrates them about the earning and redemption process.
- Whether your program is worth staying in long-term.
You don’t have to make changes to the reward structure through guesswork. Use a post-redemption survey to ask how valuable they found the reward, how easy the redemption process is, what they would change if they could, etc.
Or, you can invite top customers to exclusive feedback sessions where they can share insights in exchange for perks. Even just keeping track of customer reviews and watching out for mentions of your loyalty program can reveal a gold mine of information.
Loyalty feedback should be continuously collected and acted upon. An added benefit to this aspect of customer loyalty management is customers will see their input incorporated and become even more emotionally invested in your brand!
Final Words on Customer Loyalty Management
That does it for our guide on loyalty program management. The key takeaway from this conversation is you cannot look at your loyalty program as a “set it and forget it” strategy. You get out of this what you put in, so don’t try to go without a loyalty program manager.
From setting up a solid foundation to optimizing incentives and tracking analytics, every aspect of your loyalty program should work toward increasing retention and brand advocacy. It all starts with the basics, though, so get set up on Rivo today. See how we compare to the alternatives:
