Loyalty programs are structured and systematic marketing actions that reward, and therefore encourage customer loyalty.
If crafted and executed well. they should lead to customers’ loyalty – attitudinal and behavioural, both which are often combined in active loyalty.
Attitudinal and behavioural loyalty differ – imagine a customer impressed with the brand so much they will go and tell all of their friends and family about it. That is attitudinal loyalty. But for businesses to earn profit they need that customer to go back and do more purchases. That is behavioural loyalty. Both terms describe positive actions towards the brand, and can therefor be classified as active loyalty.
For loyalty program to be successful it has to not only provide good financial value, but also it has to provide psychological, functional and externality value as well.
Think of your favourite loyalty program – it surely does not provide only “good savings”. It most certainly treats you as distinguished member of the club, it is convenient to use and probably has some surprising gifts that come from external sources.
When crafting the loyalty program it is important to think of all those factors above. But also consider is the loyalty program best fit for both the company, and the customer. It is important to evaluate does it have competitive advantage over other programs. Lastly companies must be aware if loyalty program is achieving its intended purpose.