The numbers prove it: loyalty programs have become popular among Brazilians. Whether they are consumers seeking discounts, benefits, and other advantages, or business owners and companies that see loyalty as a way to improve relationships with their customers and bring positive returns to the business. Data from ABEMF (Brazilian Association of Loyalty Market Companies) indicates that the number of registrations in these types of programs in the country grows every year. There are already 320 million registrations, according to the latest study released by the association (3Q24).
With this booming market, companies looking to invest in loyalty programs often wonder which path to follow. What type of program to adopt? How to truly transform relationships into business? The answer to all these questions is: it depends.
Before implementing a loyalty program, the recommendation is always to study your business, define and understand your goals and objectives, and know the profile of the customers you have and want to have. Although the characteristics of a good loyalty strategy are specific to each business, there are some general rules that can greatly help those who are starting on this journey, or even those who already have a loyalty program and want to make it more effective. We have listed here some of the items that cannot be forgotten along the way.
Engagement – A loyalty program can have several goals. These include bringing more people to the store, increasing the number of items in each purchase, gaining referrals, and promoting the brand on social media. What they all have in common is summarized in one word: engagement. Ultimately, what a loyalty program needs to do is engage and guide behavior in a way that is profitable for the business. Therefore, always consider your customers' behavior when developing loyalty strategies.
Data Collection and Analysis – With so much technology available, there are countless tools that can help a company with data, information, and insights about its business. Regardless of which platforms you use, keep in mind that you cannot stop monitoring the progress and results of your program. Is your program really changing behavior? Are customers buying more? Has recurrence increased? Who are your most loyal customers? What are their preferences? These are all questions that cannot go unanswered if you want your loyalty program to succeed. In addition to measuring impacts, this type of information can help correct course in case of strategic failures.
Communication – As in any relationship, presence and dialogue are fundamental to the success of a loyalty program. Remember that engagement is built over time and needs to be "nurtured" through frequent interactions, listening, and feedback. But not only that. Communication needs to be relevant. Use the data you collect to establish this relationship. Show the customer that you know them, that you have prepared personalized offers, conditions, and experiences for them, or even that you are attentive to their needs and desires.
Rational and emotional – The ideal loyalty value proposition needs to combine both the rational and the emotional aspects. It's important, of course, that the customer feels the benefits of participating in the program "in their pocket," through discounts or redeeming points/miles for a product without having to spend more. But it's also essential that they feel recognized, part of a community, perceive exclusivity, and have positive experiences.
Segmentation – People are different from each other and have distinct behaviors. Don't forget to take this into account, and pay attention to the segmentation of your program. The possibilities are many. You can consider transactional, demographic, and even generational aspects. But never judge your consumers as people with a single profile.
And one last tip: no loyalty strategy can help you fix fundamental business problems. No loyalty program will solve issues if you have a bad product or service, if customer service doesn't work, or if the brand doesn't deliver on its promises. So, pay attention to these points to avoid damaging your relationship with your audience.
*Paulo Curro is the executive director of ABEMF – the Brazilian Association of Loyalty Market Companies; Fábio Santoro and Leandro Torres are loyalty specialists, responsible for the loyalty training course, a partnership between the association, Loyalty Academy, and On Target.
