How to Create and Run a Successful Customer Experience Program With Rewards

Who doesn't love walking into their favorite shop - you know, that place where the staff greets you like an old friend, helps you find just the right product, and thanks you warmly on your way out. You leave feeling valued, and you can't wait to go back. That's the magic of a killer customer experience (CX).

The online shoe purveyor Zappos has this customer-centric philosophy figured out. What makes them stand out from the crowd? Well, for starters, they go way over the top on service for their VIP members - a generous rewards program, free shipping, easy returns up to a year later, and friendly back-and-forth with real humans.
They understand that putting customers first and rewarding loyalty results with devoted buyers over the long haul.

When you truly tend to customer needs, show appreciation for their business, and incentivize return visits, you end up with devoted brand champions. As a business, you get to enjoy higher retention, more brand love, word-of-mouth referrals, and juicer bottom lines. It’s a win-win. 

In this post, we’ll discuss the key steps for creating and running a customer experience program that delights shoppers and makes your brand one to remember. 

Setting the foundation: Define your CX goals and company culture 

1. Clarity is key 

Before you dive into building your shiny new CX program, it’s critical to map out what you actually want to accomplish. Well-defined goals serve as your trusty compass, keeping your efforts aligned and your team rowing in unison.

When setting CX goals, be ruthlessly specific and quantitative. Wishy-washy objectives like “improve customer satisfaction” are useless. Instead, drill down to precise and measurable targets like “increase Net Promoter Score by 10 points in the next 6 months” or “reduce customer churn by 15% year-over-year.” These concrete benchmarks let you gauge progress and fine-tune based on data.

More importantly, your customer experience program ambitions should sync up with and reinforce your wider business goals. If your company is focused on accelerating growth, center your CX targets on goals like customer acquisition and order value.

If the priority is profits, concentrate on boosting retention and minimizing service costs. By linking your CX aims to wider organizational mandates, you demonstrate the strategic value of your program.

2. Types of goals to consider 

Your specific targets will vary based on your business and customers, but some common ones include:

• Boosting customer satisfaction scores (CSAT/NPS)
• Slashing customer churn or attrition
• Scoring more positive reviews and social media love
• Expanding customer lifetime value (CLV)
• Motivating more customer referrals and brand advocacy
• Improving response times and outcomes for customer issues 

As you define goals, find balance between pushing boundaries and being realistic. Set ambitious objectives that will tangibly benefit your business if crushed, but that are doable given your resources. No stress - you can always evolve your aims as your program matures.

3. Cultivating a customer-centric culture 

Creating a truly customer-focused loyalty program takes more than just setting goals - you've got to get your whole company on board! From your front-line staff to the people in accounting, everyone needs to buy into the vision of wowing customers and creating lasting relationships.

First, clearly explain the "why" behind the program so your teams understand how it benefits customers and the business. Paint a picture of the experiences you want to create and the customer bonds you aim to form. Get people excited about being a part of the process.

Next, ensure everyone comprehends their role in bringing the loyalty program to life. Thoroughly train your staff on the details - the benefits, how to communicate them, etc. Role play common situations so they feel prepped with the tools and talking points needed to confidently execute.

You could even use a performance improvement plan example to incorporate loyalty goals into all job roles (especially customer facing).

Know your audience: Customer insights and segmentation  

1. Personalization matters 

In an age where Amazon knows your preferences better than you do, customers expect experiences tailored just for them. No more one-size-fits-all rewards – that won’t cut it anymore. To build a program that truly resonates, you need to get inside your customers’ heads and design perks that cater to their unique needs and wants.

This is where customer segmentation comes to play. By grouping customers according to shared qualities – think demographics, purchase history, engagement level – you can craft targeted reward strategies that feel personal and valuable for each segment.

2. Data-driven decisions 

Effective segmentation depends on rich, accurate intel about your customers. The better you know them, the better you can tailor rewards to match their tastes. Key data sources include:

• Surveys and feedback: Ask what they want!
• Purchase history: Spot patterns in categories, price points, frequency
• Demographic details: Age, location, income, family status
• Engagement metrics: Track website visits, email opens, social comments, etc.

By connecting data dots across touchpoints, you unlock a 360 view of each customer segment to shape rewards that fit their lifestyle.

3. Segmentation in action 

Coca-Cola offers a solid example of effective segmentation. Despite being sold globally, Coca-Cola tailors its offering based on geographical groupings. So while many classic drinks are universally available across over 200 countries, beverages like Ciel bottled water only target Mexico, Morocco and Angola.

They also acknowledge that consumer preferences differ by region. For instance, Coca-Cola realized that compared to the US and Europe, shoppers in Asian markets tend to prefer sweeter flavors. In response, they customize drink formulas by location to better satisfy diverse taste preferences.

Another example is the language learning app Duolingo, which segments users to encourage personalized learning. New users access focused foundations content. Upon hitting milestones, they unlock advanced lessons to continue progressing.

Duolingo also adjusts to individuals through features like difficulty tuning, goal setting and reminders based on usage patterns. Disengaged learners even get re-motivation prompts uniquely tailored for them.

Rewards follow suit. The app grants long-term subscribers “power-ups” matching their learning style - unlimited mistakes or slower speaking speed if they're methodical studiers, versus fast-paced games for confident users. More intermittent learners are enticed back through tailored push notifications and encouraging messages tuned to their skill level.

This customized framework drives engagement by making every user feel valued. The takeaway? Invest in clustering audiences thoughtfully. Then design rewards speaking directly to the needs of each group.

Design the rewards: Variety and value 

1. The spice of life 

Once you’ve mapped your audience segments, it’s time for the fun part – inventing rewards. First rule? Variety is key. A diverse mix of perks keeps things fresh and caters to different customer motivations over time. Some reward ideas:

• Discounts or credits
• Freebies – products, services, shipping, etc.
• Early access to new arrivals or limited editions
• VIP experiences like events, tours, or one-on-ones
• Donations to causes they care about
• Let them choose from a menu of options

By serving up options, you have all motivations covered from frugal to philanthropic. Just don’t go overboard – curate a selection aligned to your brand.

2. Align with your audience 

As you brainstorm, refer back to your audience insights. The most compelling rewards feel custom-designed with their lifestyle in mind. Say you run an eco-conscious skincare brand - reward ideas might include:

• Reusable shopping bags
• Points for recycling containers
• Donations to green causes

These perks fit beautifully with earth-friendly values. Or take TOMS Shoes’ “One for One” program – for every pair sold, TOMS gives a pair to a child in need. This lets socially-conscious buyers feel their purchase made a difference.

Get the gist? Choose rewards that seamlessly slot into your customers’ worldview. Tech lovers will lose it over new gadgets, busy moms will love delivery upgrades. Know your audience.

3. It's all about perception 

Here’s a powerful insight: the perceived value of a reward often outweighs what it costs you. Customers don’t know your margins - they simply assess what feels special to them in the moment.

A $5 coupon? Nice. A $5 surprise latte? Memorable. Unexpected delights feel precious and personal, making tiny gestures have an outsized impact.

Similarly, experiential rewards carry major perceived value - an exclusive event invite or VIP treatment sticks longer than any discount. As you design your program, brainstorm feel-good surprises that wow.

At the end of the day, emotional impact matters more than dollars and cents when it comes to loyalty. A thoughtful gift that makes customers feel valued as individuals? That’s priceless.

Build engagement: Program structure and gamification 

1. Make joining your club a no-brainer 

With your rewards locked down, next decision: how will customers earn them? Two popular structures are points-based programs or tiered levels.

• Points systems work best if you want something simple and engaging. Members accumulate points per purchase, cashable for rewards when thresholds are met. Watching that point balance grow helps keep customers interested in coming back for more and ultimately cashing in. This also gives customers flexibility to snag smaller perks or save up for bigger rewards.
• Tiered programs work on lifetime value, grouping people into levels like Silver, Gold, Platinum. The more they spend, the more elite the rewards unlocked - think airline status. Great for signaling VIP status.

Many brands combine points and tiers, like Sephora’s Beauty Insider. Shoppers earn redeemable points while their yearly spend determines their tier and corresponding perks.

Choose a structure suiting your business. Do your customers make frequent small purchases? Points that pile up quickly to keep them coming back. Or do you have big budget clients that buy infrequently? Tiers that upgrade based on lifetime value make sense.

2. The power of play 

Regardless of overarching structure, baking in some friendly competition drives engagement through sheer human nature. Gamification applies gaming elements into non-game contexts using challenges, badges, levels, and leaderboards.

This makes engaging with your brand feel like an exciting game, not another boring rewards program. Some gamification incentives include:

• Progress bars to next tier or goal
• Badges for milestones like high spend or purchase streaks
• Leaderboards to compare top point earners
• Bonus challenges to spark specific actions

When developing a gamification system, align challenges and badges to customer behaviors. An adventure gear retailer might reward trying new categories, while a gourmet food service could let members level up by discovering new cuisines.

Nike's Run Club app is a master class in gamification done right. They've managed to turn a solo activity like running into a fun, social experience that keeps users hooked. With features like challenges, leaderboards, and virtual high-fives for hitting milestones, the app taps into our natural desire for friendly competition and achievement.

And the proof is in the pudding - in 2020, the app saw a whopping 45% jump in downloads and a 21% spike in user retention. Nike's clever use of gamification elements has created a loyal community of runners who just can't quit the app. Now that's what we call a win-win.

3. Surprise and delight 

Even small, unexpected perks can spark significant joy when timed right. The trick? Hyper-personalize based on customer insights. A surprise hits different when it shows you did your homework and understand what makes them tick.

Do research to uncover preferences. Check the calendar for upcoming milestones. Then find a thoughtful way to recognize those subtleties in a way that feels special.

Surprises land best when the person feels seen. So put in effort to uncover what sparks joy for each individual. Tiny gestures become pivotal brand moments when they convey that you truly get your people. Here are some ideas to get you started:

• Birthday gifts or notes
• Bumping up a member tier “just because”
• Exclusive sneak peeks at new collections
• First dibs on hot product launches

Launch, measure, optimize 

1. Get the word out 

You built a killer program - now it’s time to shout about it!. Promote across channels to drive sign-ups and participation from newbies and loyalists alike.

• Lead with website/app placement and seamless join flows
• Dedicated email campaigns showcasing value
• Social media and ads to spark buzz
• Eye-catching in-store displays (if applicable)
• Prepare staff to skillfully share details

Segmentation comes into play here, too. A new customer will need more education on how the program works, while a loyal shopper may respond best to an exclusive "founding member" invitation. Tailor your messaging and offers to each audience for maximum impact.

Promotion isn't a one-and-done effort. To keep your program top of mind, weave loyalty messaging into your ongoing customer communications. Highlight member perks in your newsletter, showcase customer success stories on social media, and send periodic reminders to redeem rewards. The goal is to make participation feel easy, exciting, and worthwhile.

2. Metrics for success 

With your program live, rigorously tracking performance across metrics quantifies impact and reveals level-up opportunities:

• Enrollment and participation rates indicate whether you’re attracting and activating the right portion of customers. Set initial targets then optimize recruitment messaging and ease of enrollment against them.
• Redemption levels determine whether allocated rewards budgets are being fully utilized or if more eligible customers need incentives to redeem. Monitor whether certain rewards go quickly while others languish.
• Changes to customer lifetime value show if members indeed spend more over time compared to one-time shoppers. Highlights whether your tiered model delivers sufficient incentive.
• Retention rate lift among members verifies whether exclusivity, early access and personalized rewards translate into superior loyalty over time.
• Surveying member NPS in addition to general brand NPS spotlights if your efforts manifest in greater advocacy and lower churn risk.

Dive deeper by investigating metrics patterns between segments - which groups engage most and which need tailored nudges based on their demonstrated behaviors.

Also, regularly monitor social sentiment, reviews and client feedback for qualitative guidance as well. This can surface reward ideas to double down on, UX friction points that hinder adoption, confusing messaging to clarify or new perks customers crave using customer experience program.

3. Data-driven refinement 

Loyalty is like any relationship - consistency alone doesn’t cut it long-term. You have to keep listening and adapting if you want the spark alive.

• Are some segments not feeling love? Ask why through surveys. Address pain points while spotlighting their community with tailored promos.
• Could more rewarding incentives realign behaviors to business goals like driving referrals and order values? Get experimental to motivate valuable actions through gamified contests or bonus point multipliers.
• Did confusion surface around policies in reviews? Social chatter? Support tickets? Backtrack to simplify and clarify through plain language across platforms.
• Requests around new rewards or flexibility increase? Meet customers in the middle where possible. Surprise delighted power users with early previews or access based on their candid product ideas.

Keep this listening and leveling-up cycle spinning. Balance reacting to clear feedback with trying inventive experiments. Meet customers where they are, not where they were. Show them your loyalty and evolution never stagnates either.

Final word 

At the end of the day, a stellar loyalty program understands customers are human - and humans change. Their preferences morph, new needs bubble up, old priorities fade over time. Launching your customer experience program is merely step one. The real work begins in sustaining relevance as their interests evolve.

That's why the most effective programs feel less like faceless point accrual machines, and more like an authentic relationship between brand and customer. 

Above all, the modern loyalty program moves beyond stale obligations and sterile transactions. At its best, it kickstarts a dynamic relationship filled with humanity. You show devotion to their needs, they respond in lifelong brand devotion. This exchange of loyalty - not point redemptions - must remain the beating heart.