How to Create a Successful Loyalty Program for Your Business
We’ve all come to accept the importance of brand loyalty. People want to shop at stores that offer fair prices and make them feel valued, and merchants want to grow their base of repeat customers.
In fact, according to KPMG, 75% of consumers will favor a brand if there is a loyalty program. That’s three out of four people who are more likely to choose you over the competition, just because you took the time to reward them.
So what does that tell us? That loyalty programs aren’t just a marketing extra but an essential offering you should have at your business.
Today, we’re going to show you how to build a loyalty program that actually works, one that creates real relationships, keeps people coming back, and helps your business grow from the inside out. By the end of the guide, you’ll know exactly how to implement them successfully in your own business.
What is a loyalty program?
A loyalty program rewards customers who frequently make purchases from a company. A loyalty platform may give customers free merchandise, rewards, coupons, or even advance access to product releases. Ultimately, loyalty programs must provide enough incentives to prevent consumers from choosing to shop elsewhere.
Almost any type of retail or hospitality business can create customer loyalty programs. Many larger companies now offer dedicated apps where customers can collect tokens and make orders.
Depending on the business, loyalty rewards can take many different forms. For retail businesses like clothing stores, loyal customers may be rewarded with discounts on choice items. Hospitality businesses like cafes and restaurants may offer free coffees or appetizers.
What results do loyalty programs produce?
Consumers aren’t the only ones who benefit from customer loyalty programs.
While businesses must pay for the perks they offer, they can earn many times more thanks to the increased business.
Increase revenue and decreased costs
Did you know that 65% of a company's revenue comes from repeat business?
That’s right. Most of your income probably comes from people who’ve already bought from you before.
On top of that, it’s also 5 to 25 times more expensive to acquire a new customer than it is to retain an existing one.
So when you invest in keeping your current customers happy, you’re not just being nice…
You’re being smart with your money.
Boost customer sentiment
Now let’s talk about something less tangible, but just as critical: how customers feel.
Loyalty programs are about creating a strong connection with consumers.
That connection builds trust.
77% of consumers say they’ve stayed loyal to a brand for over 10 years. That’s not by accident. That’s built on positive, consistent experiences.
When people feel appreciated, they stick around. In fact, 57% of consumers spend more with brands they’re loyal to, and three in four say trust is a key factor when choosing where to shop.
How to create a loyalty program
You now know what a loyalty program is and why it’s so beneficial for, not just your customers, but your business. But how do you create one?
Well, there are two main routes.
Option one: use your POS system
Thanks to advances in modern electronic point of sales (EPOS or POS) technology, building a loyalty program couldn’t be easier. With POS systems like the Epos Now Complete Solution, you can automate the entire process using first and third-party apps known as digital loyalty cards in POS.
Epos Now loyalty integrations
- Loyalty Dog: Designed with online and offline businesses in mind, LoyaltyDog allows you to quickly set up a loyalty program that works seamlessly between your online and brick and mortar stores. It even integrates with other apps like Shopify so your customers can enjoy the benefits no matter where they shop.
- Epos Now Loyalty: Epos Now system can also use the first-party POS loyalty integration Loyalty. Built around the Epos Now ecosystem, Loyalty completely automates the building and running of your loyalty program. With a few clicks, you add new customers, set rewards, and encourage brand loyalty.
How to set up your loyalty program in your POS software
Here’s a quick walkthrough of the key steps to get your loyalty program up and running within your POS system:
- Step 1: Enable the Loyalty module: Most POS systems have a dedicated loyalty feature or app. Simply turn this on in your settings or marketplace.
- Step 2: Define reward triggers: Decide how customers earn points or rewards, for example, 1 point per £1 spent or a stamp for every purchase.
- Step 3: Configure redemption thresholds: Set the rules for when customers can redeem their rewards - like 100 points for a free coffee, or 5 stamps for a discount.
- Step 4: Use POS loyalty analytics to refine offers: Your POS basically has customer retention software built into it by way of data analytics. It will track customer activity and reward redemptions, so use this data to see what’s working and adjust your program to maximize engagement and profits.
Option two: build your own custom program
Now, if you don’t yet have POS software (although we really recommend looking into one because it makes loyalty programs easier), you can still create a successful, manual loyalty program from scratch.
In our next section we’ll give you all the tips and tricks you need for setting up your loyalty program.
Tips on making your scheme work
No matter how you set it up, the key is to make it simple, valuable, and consistent, so customers actually want to stick with it. Here’s how:
1. Know your goal before you start
Ask yourself: What behaviour am I trying to encourage?
Do you want customers to come back weekly instead of monthly? Spend an extra $5 each visit? Refer their friends?
When you know your goal, it’s much easier to build a program that actually drives it.
2. Choose a reward that’s actually exciting
No one gets excited about 2% off after spending £300. Instead, offer something customers really want:
- A free product
- An exclusive service
- Early access to something new
- Or even a surprise birthday treat
If it feels like a gift, not a gimmick, they’ll keep coming back.
3. Keep the rules simple and easy to remember
You don’t want anyone squinting at the fine print.
Try rules like:
- Buy 5, get the 6th free
- Earn 1 stamp for every £10 spent
Keep it short, sweet, and easy to explain at the counter or in a sentence online.
4. Make it look good
Even if it’s just a punch card or stamp card, branding matters. Use your logo. Use your colours. Give it a name!
People are way more likely to keep and use something that feels fun and polished, not just a flimsy bit of cardboard.
Bonus: if it’s cute or clever, they’ll show it to their mates.
5. Get your team on board
Your staff are key. If they forget to mention the loyalty program (or worse, sound confused explaining it) customers won’t take it seriously.
So:
- Train them to explain the rules clearly
- Remind them to promote it with every sale
- Celebrate customer milestones (yes, even on the 5th coffee!)
How to get customers to sign up
Now that you’ve built your loyalty program, you need customers to join and make use of the perks. Many consumers are skeptical about signing up for new platforms, so you need to incentivize them.
One method to capture sign-ups is to provide a discount on their purchase in return for joining your loyalty program. This tactic works best at checkout when you can easily input the customer data into your POS.
Final thoughts
Loyalty programs work, but it takes more than printing a loyalty card.
A business must use its reward program to make customers feel valued. Even more, it needs to leverage data to ensure customers only receive relevant offers.
If you’re interested in building a loyalty program with Epos Now, get in touch with our expert team.
