6 Features of Effective Loyalty Programs

6 Features of Effective Loyalty Programs

Are you getting the most from your retail loyalty program? Or are you considering implementing a loyalty program and wondering if it’s worthwhile? A study by Accenture polled more than 25,000 consumers and unearthed some insights about what loyalty programs actually work and how to make yours more effective.

First, loyalty programs are ubiquitous — in fact, the average U.S. household has memberships in 29 loyalty programs. Second, they work: Overall, members of loyalty programs generate 12 to 18 percent more incremental revenue growth per year than non-members, the study found.

But with millions of loyalty points going unused, loyalty programs could be a lot better and deliver more value for businesses. Some 77 percent of U.S. consumers say they’re more fickle with their loyalty than ever before, making it even more of a challenge to keep them satisfied. In fact, “satisfaction” and factors such as reliability and low prices aren’t as effective as they used to be at generating loyalty. Today, you need to go above and beyond.

Key Features of Effective Loyalty Programs

What features of loyalty programs are most effective with customers?


Fifty-nine percent of U.S. consumers are loyal to brands that give them discounts, gift cards and special offers to reward their loyalty. You probably already do this; just make sure you’re tracking which offers get the best results and generate the most profits.


Forty-one percent of U.S. consumers are loyal to brands that allow them to personalize products. Offer loyalty program members free customization, such as engraving a product or special ordering custom-color sneakers.


Forty-one percent of U.S. consumers are loyal to brands that present them with new experiences, products or services, while 51 percent are loyal to businesses that consistently have the “latest” products available. Create special experiences for your loyalty program members, such as a VIP sale, early access to sales or early access to new products.


About one-fourth of U.S. consumers are loyal to businesses that partner with celebrities or “social influencers” such as popular bloggers or YouTube personalities. Try a partnership with a social media “star” your customers care about.

Family and Friends

Forty-two percent of U.S. consumers are loyal to brands their families and friends do business with. Offer loyalty program members a reward for getting friends or family to sign up, too.


Forty-four percent of U.S. consumers are loyal to businesses that involve them in designing or creating new products or services. Enlist your “VIP” customers to help choose which new products your store will carry.

Beyond the Features of Effective Loyalty Programs

Accenture offers the following tips for getting the most from your loyalty program:

  • Monitor ROI. Review the cost of current loyalty programs and make sure the ROI justifies the investment. Perhaps you can eliminate some aspects of programs or change the rewards to either cost less or generate more sales. For instance, instead of giving away free gifts or gift cards, create a value-added service instead, like free personal shopping services, free gift wrapping or a year-long return window instead of 30 days.
  • Think beyond dollars. Don’t just focus on getting loyal customers to spend more. Loyal customers have additional value beyond sales: They’re also a good source of new customers. Focus on retaining the happiest customers and getting them to share their opinions with new customers. More than half of the most loyal customers in the study actively recommend brands to others; 14 percent express their loyalty by publicly endorsing or defending the company on social media.
  • Understand what Millennials want. When it comes to loyalty programs, Millennials care more than other age groups about interacting with businesses through multiple channels, celebrity partnerships, exclusive offers and personalized loyalty rewards.

Loyalty Customer Photo via Shutterstock

Rieva Lesonsky Rieva Lesonsky is a Columnist for Small Business Trends covering employment, retail trends and women in business. She is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her blog, SmallBizDaily, to get the scoop on business trends and free TrendCast reports.