10 Ways To Improve Your Loyalty Program in 2024, Including ChatGPT

Are you tired of lackluster results from your loyalty program? Do you feel like you're offering the same old rewards and not seeing any increase in customer retention? Well, fear not, because in this blog post, I will share with you 10 fool-proof ways to improve your loyalty program in 2024, including now so popular AI.

If you’re busy you can take a look at my top 10 ways to make your loyalty solutions land better with your audience:

1. Gamify your loyalty program via adding tiers, levels and challenges. 
2. Offer unique, personalized rewards in the form of products or incentives. 
3. Reward customer engagements and offer bonus points. 
4. Launch a mobile loyalty app. 
5. Make your employees aware of the program and its rules.
6. Make the points redemption and reward delivery as fast as possible.
7. Don’t be afraid of making changes based on customer data.
8. Invest in top-of-class SaaS loyalty providers.
9. Incorporate AI devices for efficient resource allocation. 
10. Use ChatGPT to make your loyalty campaign more intuitive.
    

Getting tired of customer loyalty and retention talk?

If you work in marketing, the notions of “customer retention” and “customer loyalty” might become somewhat cliché. I get you. Customer loyalty is pretty much a myth busted, and customer retention has been inflated beyond recognition. However, it does not mean that these phenomena do not exist. 

Customer loyalty comes down to a pretty straightforward truth. It is easier to nurture trust and positive emotional attachments with people you already know rather than to start building trust from scratch with strangers. This makes perfect sense, doesn’t it?

There are hundreds of ways to nurture trust and loyalty. That’s also where customer loyalty programs come into play. You can use them to keep your brand on top of customers’ minds and to reciprocate some of the positive feedback and give back something of value. Yet, launching a loyalty program is not enough - it needs to be a data-based, well-thought-out, and interdepartmental endeavour that runs indefinitely. 

Before I give you my top 10 loyalty ideas to boost your loyalty program, let’s think about customer loyalty architecture first. Should you build it yourself or use loyalty providers that are already out there?

In-house versus SaaS loyalty

If you are a big brand with hordes of employees and development teams - launching your in-house loyalty program is objectively a good idea. This is because no SaaS will give you an ultimate level of independence and control that comes with fully independent service. So, in-house architecture wins with SaaS in terms of control and flexibility. Yet, the match is far from over. 

SaaS loyalty solutions are a preferred way of investing in loyalty for small and medium businesses because of the low maintenance costs, less workforce needed, and shorter development time. All top SaaS loyalty solutions should come with a clear user interface, loyalty analytics, and customization possibilities that let businesses launch fully white-labeled loyalty programs.

Moreover, you can also check out API-based SaaS loyalty solutions, such as Voucherify, that allow you to use the ready-made backend architecture and choose the frontend framework that suits your needs best, giving you the ultimate control over your rewards program.

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Learn more: Explore Voucherify's Open Source Loyalty Accelerator

10 ideas for improving your current loyalty solution in 2024

If you are already running a loyalty program but seek ways to improve it, you’ve come to the right place. Check out the list of best ideas for enhancing your loyalty programs and other undertakings focused on garnering customer approval and attachment.

1. Gamify your rewards program

Even if you’re not a professional Counter-Strike player, you can still appreciate the rush of adrenaline and excitement that comes with beating levels, collecting points, and receiving rewards. Setting up a flat, one-dimensional loyalty schemas does not sit right with modern customers anymore. 

The excitement that arouses with gamified experiences stems from popular marketing psychology tricks, namely the Novelty Effect, Urgency, and Windfall Gains. 

To cut the scientific talk short, the brain creates dopamine (good guys) each time it is faced with a unique and new experience. This simple chemical dependence is responsible for the breakneck pace in marketing and sales efforts to come up with new campaigns, programs, and content and work on improvements round the clock. In conclusion, people don’t like stagnation.

The sense of urgency is pretty self-explanatory. Make your offers time-limited, add a countdown timer to your messaging, and use language that emphasises rush and haste. 

The Windfall Gains effect is all about surprising your customers. Offering an unexpected incentive to visitors significantly increases the number of unplanned purchases, also driving up the average spend value and basket size. You will find more info on it here. 

What does gamification mean in terms of loyalty solutions?

Well, going beyond a one-level loyalty program is the way to go. Try out adding multiple tiers and levels to your loyalty incentives (e.g., Sephora Club), visualize the journey customers need to take to reach the top, and keep your program rules simple. Remember that your customers won’t beat the game unless they know the controls. 

2. Keep customers' eyes on the rewards

Your ideal loyalty program will undoubtedly take many different forms depending on your business model and the target audience. The most popular type of a loyalty solution is a point-based loyalty program in which customers collect points that later on can be redeemed for material rewards. This form of a loyalty solution suits best businesses that thrive on high intensity and value of customer orders. 

Remember not the rest on laurels as most customers are a bit tired of this formula and may seek more innovative loyalty solutions. 

So what can you do to make your loyalty rewards more attractive?

• Decide between material rewards and incentives (e.g., discounts). You may ask your customers directly or run iterations to see which rewards drive more engagement. 
  

Note: Discount and gift cards are an excellent way to go, as customers would need to return to redeem their rewards. Therefore, customers receive your products that they enjoy at a discounted price, and you earn bonus purchases. 

• Make your rewards feel personal. Don’t offer surplus products that nobody wants to buy as your rewards - it’s lazy and disrespectful. Instead, create unique products explicitly used for your loyalty program or offer limited edition products to make customers feel special.
• Let customers choose what they want. You may offer X number of rewards from which customers can choose. Don’t create a program in which X number of points equals this specific product/deal. Your customers will thank you for it. 
• Make the point conversion simple. Reward information should be fun and easily digestible.
• Create a visually pleasing reward catalog. 
  

3. Reward engagement and loyalty-generating activities

As I mentioned earlier, the classic point-based formula in which 1$ equals 1 point isn’t the best fit for the modern market full to the brim with competition and ever-changing customer trends. Take a look at the Starbucks loyalty offer. This leading cafe chain decided to reward customers also for engagements, not just purchases. An opportunity to earn extra points for activities such as leaving a review, celebrating a birthday in the café or making an order via the app, makes the program more dynamic and tailored to customers’ needs. 

4. Launch a mobile app for your loyalty program

Speaking of the mobile app, the advent of mobile culture shouldn’t be overlooked in your loyalty strategy. Creating a loyalty solution that’s always within reach in a handy form of a mobile app is something to consider. Looking at the US, approximately one-in-five American adults are “smartphone-only” internet users - that’s around 28 million people using smartphones as their only source of information. That’s a significant number that you don’t want to skip. 

Kiko Milano is an excellent example of a visually-stunning and gamified loyalty mobile app. You can read more about it here. 

5. Make it a company-wide endeavour

If only your marketing team is aware of the loyalty program, you’re not going to get too far. 

Launching a loyalty program is a multi-layered undertaking, and so it requires open communication between various teams, including (obviously) marketing and sales, IT, customer support, upper and lower management, and even legal teams. If you are offering your products in brick-and-mortar stores, make sure that the shop assistants know the ins and outs of your program and that they talk about it every chance they get. Lack of proper exposure is synonymous with badly-performing loyalty incentives.  

Perhaps, it’s a little off-topic, but when Airbnb first launched its widely-known referral program, it fell flat. But the problem didn’t lay with the program itself, but rather with proper education of Airbnb employees. When asked about the program, some of them admitted never hearing about it before. Don’t let the same thing happen to your customer loyalty solutions. 

6. Minimize the gratification delay

Imagine buying a new book that you wanted, and then instead of enjoying it straight away, you need to put it on the shelf for a week. What do you feel? Annoyance, weak strings of anger, disappointment? Yup, you don’t feel the initial excitement due to the gratification delay. 

Your loyalty solutions should be designed in a way that allows for fast points redemption, speedy reward delivery, and points conversion. The longer customers need to wait for the actual fruits of their loyalty towards your company, the more annoyed they will end up. 

7. Iterate, iterate and iterate

You can’t expect your loyalty program to win all the awards right after launch. There is time for initial design, but you also should make time for modification, changes, and updates. Track customer data, engagement rates, and loyalty metrics, such as participation levels and redemption numbers. See which rewards steal customers’ hearts and which are usually overlooked. In short, aim for perfection and always give yourself time and tools to adjust the program to any obstacles that arise along the way. 

8. Choose SaaS loyalty providers

If you have decided to use a SaaS loyalty solution provider instead of building in-house loyalty architecture, make sure that your loyalty provider meets the following criteria:

• It’s easy to integrate and implement within your current business model.
• It’s quick and efficient in testing and releasing iterations.
• It’s scalable and manageable.
• It lets you personalize rewards, eligibility criteria, and timing of your incentives and loyalty rewards.
• It respects legal norms and is compliant with personal data policies.
• It can be integrated with your messaging channels, or you can create new customer touchpoints with it. 
• It’s consistent with your brand image and has white-labeling functionality.
• It’s geared up towards security and offers tools preventing fraud. 
• It’s affordable. 
  

9. Incorporate AI devices for efficient resource allocation.

According to Forbes, 75% of customers expect businesses to use technology to create better customer experiences. Interestingly, the same research shows that over 60% of consumers are open to using AI as a way to improve their consumer experiences. 

Taking those things into account, there is no doubt that AI has the potential to revolutionize loyalty management in the nearest future. Hence, you should not hesitate to employ such devices to improve the loyalty journey of your customers – from customer dialogue and overall UX experience to finally driving up your sales. 

But in what way does using AI assistance improve my loyalty campaign? There are a few reasons:

• Personalization: AI algorithms can analyze large amounts of customer data to identify patterns and preferences, allowing your marketing team to create personalized offers and rewards that are more likely to resonate with customers.
• Predictive modeling: AI is perfect for creating predictive models that identify which customers are most likely to churn, enabling marketers to target them with personalized offers and, consequently, lower the risk of them turning away from your brand. 
• Effective optimization: AI can analyze customer behavior in real-time, allowing your managers to adjust the features of loyalty programs on the fly in order to maximize customer engagement. You will be able to recognize which loyalty program features are most effective and invest in developing those instead of wasting time and money on ineffective measures. 
• Gamification: AI-powered solutions can automate game mechanics such as levels, challenges, and badges to make the program more interactive and engaging. This can help customers feel more invested in the program and encourage them to continue participating.
• Regular communication: AI can be deployed in order to to create an AI-powered chatbot on your website, which can significantly help in providing customer support, answering common consumer questions, and resolving consumer issues quickly and efficiently. 

As for the loyalty program, AI chatbot devices can help you keep your customers informed about the benefits of your loyalty program and any changes made within its rules. Remember that regular communication is key to customers feeling more connected not only to the program but the brand itself. 

10. Use ChatGPT to make your loyalty campaign more intuitive. 

ChatGPT is one of AI's most popular solutions capable of natural language processing, understanding, and generating human-like responses to text-based inputs, making it useful for various applications such as chatbots, customer service, and content creation. This means that you also can use ChatGPT to make your own loyalty campaign more effective and tailored to the exact needs of your consumers. 

Let’s chat(GPT) with your customers 

Reuters reports that ChatGPT is the fastest-growing form of OpenAI, having reached 100 million active users within just two months after its launch at the beginning of 2023. 

Accordingly, the application is useful to millions of people and can be so for your loyalty campaign as well. Below there is a list of ways in which ChatGPT as an AI language model can prove effective in improving the loyalty experience for your customers:

1. Increased customer engagement

Chatbots can help increase customer engagement with the loyalty program by providing instant support and answers to various customer queries. Whether they have questions about products, loyalty program conditions, or delivery options, consumers can access the chatbot from anywhere at any time, and immediate answers indeed prove valuable in terms of nurturing customer loyalty and trust in the brand. 

You can also train your chatbot to provide customers with tutorials and how-to messages to educate them about using your products or services, or allow consumers to book appointments through chatbots making the process seamless and pleasurable. The possibilities are endless.

2. Effective data analysis

ChatGPT-powered chatbots can collect and analyze customer data, such as purchase history, preferences, and feedback. This data can help you tailor your loyalty program and offer personalized incentives that are more likely to resonate with your customers.

3. Limitless availability

Without a doubt, chatbots are available 24/7, which means customers can access info about the loyalty program and rewards at any time of the day or night. Such availability time window increases customer convenience and improves customer satisfaction daily. Being a part of a brand ready to answer its customers' needs is an invaluable experience for every consumer. 

4. Scalability

Chatbots can handle a large volume of customer inquiries and requests, which means you can scale up your loyalty program without worrying about customer support capacity. A ChatGPT-powered chatbot can help you manage a more extensive customer base and increase loyalty program participation.

5. Preference concretization

Chatbots can use AI to provide personalized rewards and incentives to customers. By analyzing customer data and behavior, ChatGPT can suggest special rewards that are tailored to the customer's preferences and past behavior to influence their shopping habits. Receiving offers that just suit a particular customer's needs will certainly make them love your brand even more. 

Overall, ChatGPT is a great tool for creating effective communication with your customer base. As long as you know what your customers want and are always ready to answer their needs, you can successfully nurture their loyalty.  

Importantly, ChatGPT can also be used for content creation. Your marketing can take advantage of the application and develop marketing communication – for example, write email sequences or social media posts – with its help. Moreover, ChatGPT can help you generate names of programs, and arrange tiers along with their structure. Later on, it can facilitate generating the structure of awards and optimizing them.

I hope that these tips will help you improve the loyalty program that you aim to launch or that you are already running. Good luck!

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