Your Ultimate Guide to the Perfect Loyalty Program

Date Published
02/14/2020

According to a 2019 study by Bond, which specializes in marketing and customer experience, 79% of consumers say that having access to a loyalty program makes them more willing to continue doing business with an organization.

Non-profit organizations (NPOs) commonly use loyalty programs to establish long-lasting relationships with their donors. A successful program will motivate members to continue donating to your cause instead of disengaging or going with a competitor.

So how do you set up a quality loyalty program? First, it’s important to understand why some loyalty programs succeed while others fail.  

Why are loyalty programs effective?

There are two main goals of a loyalty program:

  1. To keep your current donors satisfied.
  2. To incentivize new donors to continue working with you.

 This can be done by offering rewards and benefits to members who donate over a certain amount.

Having happy customers is the key to a good brand reputation, which is a crucial component of marketing. If the program is successful, your donors will feel valued and recommend your NPO to their families and friends. This creates a snowball effect, resulting in more donations and a wider-spread awareness of your cause. Also, bringing in new donors via word-of-mouth is much cheaper than investing in complex marketing campaigns.

In order for your loyalty program to add value, your donors must be happy with the benefits you’re providing. This could include discounts for shopping at partnering businesses, or setting up a system of points that can be redeemed in exchange for special prizes. As long as you prove to donors that they can save money through their loyalty, you’ll increase memberships.

For example, you can give your members discounts to popular local restaurants, or allow them to transfer their points into frequent flyer miles with certain airlines. It’s important to have a strong understanding of your network of donors and design your loyalty program accordingly. What is the key demographic? What activities make them happy? What other causes do they support?

Why do some loyalty programs fail?

Loyalty programs don’t work if they’re poorly managed and/or the membership benefits aren’t attractive enough. According to Loyalty360, 77% of consumers agree that customer service is a strong determining factor when it comes to loyalty.

When your donors feel unappreciated, they might abandon your NPO, even if you’re offering them valuable benefits to stay. Providing friendly and reliable customer service to your donors will keep them feeling valued. One way to do this is by sending them relevant updates about their membership. If they’re eligible to receive a specific prize, perhaps since they donated a certain amount or have been a member for a specific period of time, make sure someone on your end is communicating that to them. Also, if they have questions or concerns that need to be addressed, provide a phone number or email address they can reach out to anytime.

You’ll also want to create enticing rewards to motivate and excite members. If the incentives are boring and/or not that materially valuable, donors won’t even consider signing up. 

How do you start a loyalty program?

The first step will be to establish your membership benefits and barriers to entry. What will donors get in return for their loyalty? Can anyone become a member? If not, what qualifications or credentials will they need to possess? The incentives and terms of your loyalty program should be listed out clearly for prospective members. In your marketing efforts, a short and to-the-point program description will help you bring in more donors. A simple and clean sign-up process will help as well. For those interested in becoming members, try to request as little personal information from them as possible.       

Once you have your first couple of members, create a solid system of communication. Put together an email list and send out news and updates to keep them engaged with your NPO. You should also never leave a member waiting too long if they have questions or concerns.    

Finally, facilitate the renewal process. After all, the purpose of a loyalty program is to get your donors to stay. Make sure they know when their membership expires or renews. And when they cancel, reach out to them for feedback so you can make improvements along the way.

Interested in learning more about loyalty programs for NPOs? Visit Allegiance today!

Get the fundraising solutions you need to fuel your mission.

Get Started

Finally, an End-to-End Fundraising Solution Accessible to all Nonprofits

DMW Fundraising and Member Benefits are now part of Allegiance Fundraising Group

Allegiance Fundraising Group brings together three well-established fundraising teams to create an end-to-end fundraising solution that makes it easier for you to reach your mission. Today you can turn to a single team for seamless fundraising strategy and implementation, donor management software, and membership loyalty programs.

Learn more about Allegiance Fundraising