The numbers prove it: loyalty programs have won over Brazilians. Whether it’s consumers seeking discounts, benefits, and other advantages, or business owners and companies seeing loyalty as a way to improve relationships with their customers and bring positive returns to their business. Data from ABEMF (Brazilian Association of Loyalty Market Companies) indicates that the number of enrollments in such programs in the country grows every year. There are already 320 million registrations, according to the latest study released by the association (Q3 2024).
With this market boom, companies looking to invest in loyalty often wonder which path to take. What type of program should they adopt? How to effectively turn 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, outline and understand your goals and objectives, and get to 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 starting this journey, or even those who already have a loyalty program and want to make it more effective. Here, we list some of the items that cannot be overlooked along the way.
Engagement– A loyalty program can have various goals. Bringing more people to the store, increasing the number of items per purchase, gaining recommendations and brand promotion on social media. What all of them have in common is summarized in one word: engagement. Ultimately, what a loyalty program needs to do is engage and direct behavior in a way that is profitable for the business. So, always think about your customers’ behavior when designing 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 the business. Regardless of the platforms you use, keep in mind that you must track 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 to succeed in your loyalty program. Besides measuring impacts, this type of information can help correct course in case of strategy 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 just that. Communication needs to be relevant. Use the data you collect to establish this relationship. Show the customer that you know them, that you’ve prepared personalized offers, conditions, and experiences for them, or even that you’re attentive to their needs and desires.
Rational and emotional– The ideal value proposition of loyalty must combine both: the rational and emotional sides. It’s important, of course, for the customer to feel the benefits of participating in the program ‘in their pocket,’ through discounts or redeeming a product with points/miles, without needing to spend more. But it’s also essential that they feel recognized, part of a community, perceive exclusivity, and have good experiences.
Segmentation –People are different from each other and have distinct behaviors. Don’t fail to take this into account, and pay attention to your program’s segmentation. The possibilities are many. You can consider transactional aspects, demographics, and even generational factors. But never judge your consumers as people with a single profile.
And one last tip: no loyalty strategy can help you correct fundamental business problems. There is no loyalty program that will solve the issues if you have a bad product or service, if customer service doesn’t work, or if the brand doesn’t deliver what it promises. So, pay attention to these points to avoid damaging the relationship with your audience.
*Paulo Curro is the executive director of ABEMF – 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 and Loyalty Academy and On Target.
