How do you target customers for loyalty programs?

1 Customer Segmentation

Customer segmentation is the process of dividing your customer base into smaller groups based on common characteristics, such as demographics, behavior, preferences, or needs. By segmenting your customers, you can identify the most loyal, profitable, and responsive segments, and tailor your loyalty programs to their specific wants and expectations. For example, you can segment your customers by their purchase frequency, spending level, product category, or feedback score, and offer different rewards or benefits to each segment.

2 Customer Targeting

Customer targeting is the process of selecting the most suitable segments for your loyalty programs, and communicating with them through the right channels and messages. By targeting your customers, you can increase the relevance, value, and attractiveness of your loyalty programs, and motivate your customers to join and engage with them. For example, you can target your customers by their location, device, or browsing history, and send them personalized emails, notifications, or ads that highlight the benefits of your loyalty programs.

3 Customer Profiling

Customer profiling is the process of creating detailed descriptions of your target segments, based on their attributes, behaviors, motivations, and pain points. By profiling your customers, you can understand their needs, wants, and goals better, and design your loyalty programs to match them. For example, you can profile your customers by their personality, lifestyle, or values, and create loyalty programs that reflect their interests, passions, or causes.

4 Customer Testing

Customer testing is the process of validating your loyalty programs with your target segments, before launching them to the wider market. By testing your loyalty programs, you can collect feedback, measure performance, and identify areas for improvement. For example, you can test your loyalty programs by conducting surveys, interviews, or focus groups with your target customers, or by running experiments, such as A/B tests or beta tests, with a small sample of your customer base.

5 Customer Monitoring

Customer monitoring is the process of tracking and analyzing your loyalty programs' results and impact on your target segments, after launching them to the market. By monitoring your loyalty programs, you can evaluate their effectiveness, efficiency, and profitability, and make adjustments as needed. For example, you can monitor your loyalty programs by using metrics, such as retention rate, churn rate, customer lifetime value, or net promoter score, or by using tools, such as dashboards, reports, or analytics platforms.

6 Customer Optimization

Customer optimization is the process of enhancing your loyalty programs' performance and value for your target segments, based on the insights and data from your monitoring process. By optimizing your loyalty programs, you can increase customer satisfaction, loyalty, and advocacy, and achieve your business goals. For example, you can optimize your loyalty programs by adding new features, benefits, or rewards, or by removing or changing the ones that are not working well for your target customers.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?