The structure determines the behavior
The second reason is that it affects how consumers behave with your brand when they participate in a program. Members of a rewards program are more likely to spend more time on the website or purchase more items on an online store if they feel fairly rewarded for their behavior. This means that any changes in the loyalty program structure will also affect the behavior of customers participating in them.
Loyalty design is also crucial when it comes to maintaining customers who are just beginning to participate in your programs. According to Segment, 54 percent of consumers expect to receive a personalized discount within 24 hours. If you don't offer enough value in the beginning, customers will progress quickly through the customer journey and fail to grow any deeper attachments with your brand.
It's also important to remember that customers are different, so you need to focus on their specific needs and goals. This is why the structure of your loyalty program must allow for some sort of personalization. This could be achieved by allowing customers to select their preferences and customize experiences according to their needs. Customer segmentation can also be a useful tool to make sure that every customer gets the recognition and attention they deserve.
By making sure that you structure your loyalty program with your customers in mind, it will be easier to keep them engaged and satisfied. In the end, it's all about creating a win-win situation where you can get an edge over your competitors. So you must have a clear plan for how the program is going to work before jumping into the design
The structure determines the costs
The third reason is that it affects how much the program will cost you. The costs associated with developing a loyalty program are directly related to the number of people that will be participating in it. More customers mean more effort is required for the development process. This is why it's important to pay attention to the design structure from the beginning because you don't want your costs to get out of control.
Rewards program structures correspond directly to how your company will see a return on its investment, meaning if you lack a clear strategy, you'll likely end up with a slim profit margin or even an operating loss. Ultimately, your ROI should outweigh your costs.
It's also important to remember that costs are related not only to the cost of development but also to the cost of maintaining and supporting your program. This doesn't mean you should focus solely on cost-cutting, but it's important to remember that costs should be kept under control so you don't go over budget.
The good news is that there are easy-to-implement solutions that can help you minimize the costs of your loyalty program. For example, a tiered system where customers spend more to get additional benefits, or a customer referral program where existing customers help promote the product and bring in new members. Another way is by sticking with a simple design for the loyalty program and focusing on what matters, which in this case is your customer's needs. This means that you should make sure to provide extra value for every purchase they make when participating in the program. The more value you provide, the fewer points they need to redeem rewards. This means that your costs will remain low even if there are a lot of customers participating in your program.